RMG failing to move apace with BD economic progress

CPD also finds foreign staff prevalence in industry's upper echelons

FE Team | Published: March 03, 2018 22:56:04

FE Report
The extent of social upgradation Bangladesh's apparel sector has attained over the last five years is unable to keep pace with the desired progress on the economic front, risking its sustainability, a study reveals.
Such uneven situation has posed a threat to the long-term sustainability and competitiveness of the largest export-earning sector, says the study report by the Centre for Policy Dialogue.
It also revealed that the ratio of female workers declined while male participation increased.
Also, while the share of female employment in upper-and middle grades was slowly rising particularly in grade III, IV and V, they remained scant in top grades such as grade I and II.
The wage gap between male and female has also declined, it further showed.
"The upgradation is most prominent in case of social issues, particularly with regard to standards, non-discrimination and employability, but very poor in terms of rights," Khondaker Golam Moazzem, research director of the CPD, said while presenting the preliminary findings of the survey.
Upgradation is moderate in gender-related issues while enterprises are behind in terms of economic upgradation due to poor performance in product and functional upgradation.
"Such an unbalanced growth usually has limited positive impact in terms of firm's overall competitiveness, especially of small and medium enterprises," says the presentation on the findings.
The outcome of the survey, titled 'New Dynamics in Bangladesh's Apparel Enterprises: Perspectives on Restructuring, Upgradation and Compliance Assurance', was shared at a dialogue on 'Ongoing Upgradation in RMG Enterprise: Results from a Survey' in the city Saturday.
Dr Debapriya Bhattacharya, a distinguished fellow of the CPD, moderated the discussion chaired by its chairman Professor Rehman Sobhan.
Mikail Shipar, former labour secretary, Md Siddiqur Rahman, president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Fazlee Shamim Ehsan, vice-president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), Shamsunnahar Bhuiyan, member of the Minimum Wage Board, Md Babul Akhter, former secretary-general of IndustriAll Bangladesh Council, and Dr A K Enamul Haque, Professor at the Department of Economics of East-West University, among others, also spoke at the meet in the city.
CPD is currently conducting this study to examine the state of transformation of
Bangladesh's RMG enterprises during post-Rana Plaza period, particularly with regard to economic, social and gender-related issues.
The survey has been conducted on 2,123 workers in 252 garment factories to get an overview of the latest status of the export industry.
"Though the overall ratio of female workers declined in the RMG sector, the sewing and finishing sections are still dominated by women with 74.90 per cent and 58.60 per cent," the CPD study shows.
The proportion of female workers reached 60.80 per cent because of the introduction of modern technologies in units that squeezed the opportunity for them as they are less knowledgeable about operating different machines compared to males.
The ratio of male workers increased to 39.20 per cent in the RMG sector, he said, adding that a male worker on an average receives Tk 7,270 as monthly wage whereas a female gets Tk 7,058.
In 2015, the female and male workers' participation in the workforce was 64 and 36 per cent respectively.
Some 16 per cent of the surveyed enterprises have employed foreign staffs in almost all sections, with the highest -- 37.3 per cent -- in production planning, followed by 20.1 per cent in merchandising, 11.9 per cent in quality assurance, 8.2 per cent in washing department and each 6.0 per cent in both administration and industrial engineering, it revealed.
And 3.0 per cent each are in both sewing and knitting departments, 2.2 per cent in maintenance department and 1.5 per cent are in research and development.
More than 60 per cent of the factories received order from buyers, Mr Moazzem said, adding sub-contracting activities declined by 6.7 per cent and that 17 per cent enterprises are engaged either in partial or full sub-contracting activities.
"Both entrepreneurs and buyers have kept their confidence in investing in the sector, creating additional employment at a time when workers are losing jobs due to closure of a good number of factories," the study report says.
Still 41 per cent of the sample enterprises operate their businesses in rented spaces, 34 per cent in shared buildings where 63 per cent are RMG-related establishments and 16 per cent of them mentioned that they will either relocate or close within one to five years, it found.
Major changes were observed in case of ownership which is family- based towards corporatisation with better use of management dominance of group-led activities.
Of them, 67 per cent are private limited and 3.0 per cent are public limited companies and 89 per cent of them have boards mostly family-based.
The role of group companies is increasingly visible in RMG sector with 61 per cent found sister concerns of different groups, not only RMG-based but also non-RMG-based enterprises.
Less than 20 per cent of the surveyed enterprises have 'advanced' levels of technologies while 41 per cent have 'moderately better'.
Most of the firms have workers' participatory committee -- 91 per cent -- while trade unions are almost non-existent, only 3.3 per cent.
Mr Akhter opined that unions so far formed in small units and it is quite impossible to form unions in large units due to complexities in the labour-law provisions.
He, however, alleged that real unions are few as most of them are backed either by owners, government and owners, unions and NGOs whereas unions were allowed following pressure from both local and international arenas.
He reiterated his demand for Tk 16,000 as minimum monthly wages for garment workers.
Montu Ghosh, a labour leader, demanded Tk 10,000 as basic payment, and Tk 6,000 as house rent, conveyance and medical allowance.
Participants also stressed government's strong control and monitoring on market, saying house rent and other daily expenses have gone up significantly since new wages were announced.
Responding to a question, the BGMEA president cited declining trend in global demand and prices of apparel items, rise in local cost of doing business and currency appreciation against the US dollar as factors for less-than-required upgradation in economic aspects.
Terming the 70 federations in RMG sector 'ridiculous', Mr Sobhan raised question how the unions' demand would be taken seriously if they don't place their united demands.
"The way you (factory owners) dealt with workers should be different," he said, suggesting making the workers partners and stakeholders of the industry, investing for their training to update them to skilled ones.
Following the investments, they (workers) would stay as they would get share of their profit, he mentioned.
He also called for launching a campaign or dialogue both in the country and beyond to dig out the 78 per cent margin gap in the supply chain.
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