Migration of sunset industries: An opportunity or curse?

Habibullah N Karim It is commonly known that as an economy develops and wages increase, manufacturing of low-cost, labour-intensive products become less competitive compared to less developed economies where wages are lower. Following this trend, manufacturing of low-cost, labour-intensive products such as casual wears, stuffed toys, etc. periodically migrate from countries with higher per-capita earning to countries with lower per-capita earning. The low-cost, labour-intensive industries are called 'sunset industries' in the countries where they are forced to close or migrate due to wage pressures. Regulatory pressures could also be at play for some industry migrations, especially those that are considered overly polluting or hazardous. Bangladesh being a low-wage country with an abundant labour pool, is a natural destination for 'sunset industries' from richer countries in the Asia-Pacific region as well as other parts of the world. In the 1980s, ready-to-wear apparels industries in Hong Kong, Malaysia, Singapore and South Korea were considered sunset industries in those countries. The apparels manufacturing entrepreneurs from those countries actively courted entrepreneurs in Bangladesh and this saw a huge surge in the establishment of new apparel manufacturing enterprises here. Along with garments manufacturing came backward linkage industries such as textiles, dyeing and finishing industries as well as the larger fabric and yarn manufacturing industries. These latter industries, especially dyeing and finishing industries produce plenty of liquid chemical wastes that are highly toxic. In the absence of adequate regulation and monitoring of these harmful effects of industrial development, we are today burdened with rivers, canals, rice-fields and even ground-water aquifers that are highly polluted and beyond human consumption either for drinking and irrigation or for aquatic farming. Buriganga, Turag and Shitalakhya around Dhaka and Narayanganj are rivers of black sludge in many areas as a result. Belatedly, regulatory awareness about these polluting effects of industries is finally discernible but effective monitoring and control is still far from having any visible impact. In order to create millions of jobs for a youthful population, rapid industrial growth is the only option, but we must do everything in our capacity to clean up and reclaim our rivers, lands and environment for a healthy living which is a fundamental right of every citizen. In recent times, we hear even China is trying to push out their garments manufacturing to countries like Bangladesh, Cambodia, India and Vietnam. China is now firmly established as the predominant factory of the world and is no longer competitive in the low-end manufacturing sector. Whereas, Bangladesh's garments exports rank third in the world, but at around US $20 billion a year it is less than a sixth of the Chinese exports in this area. Bringing home even a small chunk of the shrinking Chinese garments production would double our share of the global apparels market. This huge potential uptick in our garments manufacturing, of course, will require active engagement with the Chinese garments exporters as well as prompt initiatives in the areas of making available requisite skilled resources, infrastructure and utilities. On the other hand, we must keep in mind that we are not the only country in the world wanting a slice of the 'sunset industries' migrating out of countries that are further ahead of us on the industrial development growth curve. In order to woo such potential investors for and buyers of our manufactures, we not only compete on wages and cost of utilities but also on facilities for after-work relaxation and socialising for the expatriate community who will need to come and stay here to manage affairs on behalf of the foreign investors and buyers. In this area, we have quite a ways to catch up with countries like Vietnam where expats can socialise with a relaxing game of golf at the end of a business-day or drive out of town in the week-end. Here people are too exhausted after beating down the traffic to get home after work. Of course, the 'sunset industries' from China and other countries in the Asia-Pacific region are not limited to apparels only. Manufacturers of toys, footwear, leather-goods, low-end electronic goods, light-engineering products and home furnishings are also looking for new homes and Bangladesh can play host to these investors roaming the world for a lower-cost place to accommodate them. Accordingly, the potential for expanding our export base is sky-high. Some of these sunset industries, however, bring chemical, environmental, and workplace hazards as mentioned above that will need to be carefully monitored and the harmful effects checked by mandating appropriate waste processing facilities or effluent-treatment-plants (ETPs). There are some industries where even ETPs cannot help as the manufacturing involves chemicals and compounds that are highly poisonous and non-biodegradable. Textile dyes, electronic and glass products containing mercury and ship-building involving carcinogenic asbestos are some examples. Bangladesh with a small landmass and the highest population density in the world (aside from city-states like Singapore) cannot afford to have uninhabited wastelands to dump such toxic materials. Entrepreneurs and industrial policy planners need to keep this fact close to their hearts. We have to say no to some industry relocation opportunities while welcoming most others. For a private sector perspective on the 'sunset industries' migration opportunity and threat in discussion with Syed Ershad Ahmed, president of the Foreign Investors Chamber of Commerce and Industries (FICCI), and Anwarul Alam Chowdhury Parvez, former president of the Bangladesh Garments Manufacturers and Exporters Association (BGMEA), readers are requested to watch Episode 12 of Orthonitir Chaka today (Sunday, December 11) at 5:30pm on Boishakhi Television. The programme will be repeated at night at 12:30am and will also be available online from Thursday at BDeshTV.com. The Financial Express is the media partner and American International University of Bangladesh (AIUB) is the technical collaboration partner of Orhonitir Chaka. The writer is an IT entrepreneur, policy activist and the anchor of Orthonitir Chaka. He can be reached at email: hnkarim@gmail.com