Negative developments affecting export
Wednesday, 19 September 2007
Syed Fattahul Alim
TWO disconcerting reports were front-paged by this paper on Saturday. One of the reports sent shivers down the spine of not only the exporters of garment products, but also of those who have any concern for the future of the economy as a whole. The report was about a fresh threat that the export-oriented readymade garment (RMG) sector is now faced with from its largest export destination, the USA. The other threat is coming from within the industry itself.
This highest export earning sector of the country has been facing one threat after another since the expiry of the Multi-fibre Arrangement (MFA), which it did sail through smoothly proving all the speculations to the contrary wrong. Then there is the still looming fear of the uneven competition Bangladeshi garment products will be facing from the Chinese ones in the European and North American markets now that the restrictions on their entry into those markets are being withdrawn. Despite this fear of tough competition lying ahead, there was no lack of optimism either, if only for the reasons that the local RMG products had come up against similar threats in the past and did also scrape through those hard times unscathed. In fact, it emerged ever stronger following each such face-off with various odds visiting periodically.
But the latest threats that this flagship of the country's small export sector is now faced with have been coming from quite unexpected directions.
The two reports alluded to in the beginning, however, do not involve any challenge of competition in the international market from a fresh source of similar products.
Unfortunately, the present threat is far from a constructive one. First, an American NGO named American Federation of Labour and Congress of Industrial Organisations (AFL-CIO) has lodged a complaint to the United States Trade Representative (USTR) to the effect that the export-oriented industrial units, especially the RMG and the shrimp and frozen foods producing factories of the country are violating both domestically and internationally recognised standard of workers' right, particularly those set by the International Labour Organisation (ILO).
Further allegations that this US-based NGO made say that the security forces of the country are harassing as well as inflicting violence on the trade unions, workers and pro-labour NGOs in the different industrial units both within and without the Export Processing Zones (EPZs).
On the basis of these complaints, AFLI-CIO petitioned to the USTR in order that the Generalised System of Preference (GSP) facility that Bangladeshi exporters have so far been enjoying in the US market is withdrawn. It is worthwhile to note here that the said US NGO has a lot of influence in the Democratic Party which dominates the US Congress. What is more worrying is that the 2007 GSP annual review has accepted the petition lodged by AFL-CIO. And on the basis of this petition, the USTR has also arranged a public hearing of the allegations of workers' right violation made against Bangladesh.
The aforementioned developments in the USA were reported through a letter sent to the Commerce Ministry by the Commercial Councillor of Bangladesh Embassy in Washington DC. The letter urged the government to take the issue seriously.
The said letter from Bangladesh embassy in Washington therefore has duly urged the government to submit the pre-hearing brief to the USTR's GSP programme before September 21.
In the present US Congress, as mentioned earlier, the Democratic Party is enjoying the majority. If the NGO reports about the alleged violation of workers' right in Bangladesh's garments and other industries draw a sympathetic hearing from the US Congress, then that may spell disaster for the overall overseas export from Bangladesh, since the US is the major destination of this country's export. On this score, one must not forget the fact that about 36 per cent of Bangladesh's total export goes to the US market.
It will not be out of place to recall here that the same US-based NGO made similar complaints of workers' right violation in 2005 against Bangladesh's export industries.
All the stakeholders in the export sector, therefore, need to face this threat to the garment sector, or the entire economy for that matter with all seriousness and in a concerted manner.
While such worrying developments are being reported from Washington, a very large destination of the country's export sector, disturbing pieces of news are coming also from within the export processing zones of the country. The violent clashes between the government's security forces and the garment workers on last Friday over a very trifle incident of a stolen mobile phone cannot under any circumstances be taken lightly. The rumour that led to the workers' unrest in Dhaka Export Processing Zone (DEPZ) in Savar was that a garment worker was being kept in captivity within a factory or that he might have been killed. Hundreds of workers concerned about the whereabouts and well-being of the missing workers from within DEPZ as well as from outside gathered and held angry demonstrations.
To ward off further chaos and violence within the DEPZ, the security forces had to deal with the situation accordingly, because otherwise it could have turned for the worse. Whatever is the truth surrounding the missing worker, it is up to the government's law enforcement department and probe body formed to this end to find out and take steps to punish the culprits involved in the incident. Unfortunately for the garment industry, there is the danger that the story of this apparently isolated incident within the DEPZ can be blown out of proportions and reported in a distorted fashion in the Western press. It would not be surprising if one suggests a possible linkup between the DEPZ violence and the developments in Washington surrounding Bangladesh's exports there. Such suggestion would have few eyebrows raised, if one recalls the string of violence that visited the entire garment industry at the fag end of the four-party alliance government. At that time, too, the violence spread without rhyme or reason, though in the beginning it was all about the usual workers' demands for hike in the wages and benefits thereof. But the way many garment units were being ransacked and damaged by hoodlums passing for workers astonished many at that time. Even the workers of the affected industries said that they cannot damage their workplace, since it was the source of their earning.
In the wake of the chaos, the government, the trade unions and the garment owners association together sorted out the issues together and fixed Tk. 1650 as the minimum wage of the workers.
In reaction to the Friday's violence in the DEPZ in Savar, the chairman of BEPZA said that there was no cause for pay-related unrest at least in DEPZ, since this particular EPZ was drawing large investment. The workers, too, were receiving their wages according to the agreement.
Against this backdrop there is no scope to take the developments affecting our export potential both at home and abroad in a light-hearted manner. For it is a life and death question of our survival as a viable economy in the global marketplace.
TWO disconcerting reports were front-paged by this paper on Saturday. One of the reports sent shivers down the spine of not only the exporters of garment products, but also of those who have any concern for the future of the economy as a whole. The report was about a fresh threat that the export-oriented readymade garment (RMG) sector is now faced with from its largest export destination, the USA. The other threat is coming from within the industry itself.
This highest export earning sector of the country has been facing one threat after another since the expiry of the Multi-fibre Arrangement (MFA), which it did sail through smoothly proving all the speculations to the contrary wrong. Then there is the still looming fear of the uneven competition Bangladeshi garment products will be facing from the Chinese ones in the European and North American markets now that the restrictions on their entry into those markets are being withdrawn. Despite this fear of tough competition lying ahead, there was no lack of optimism either, if only for the reasons that the local RMG products had come up against similar threats in the past and did also scrape through those hard times unscathed. In fact, it emerged ever stronger following each such face-off with various odds visiting periodically.
But the latest threats that this flagship of the country's small export sector is now faced with have been coming from quite unexpected directions.
The two reports alluded to in the beginning, however, do not involve any challenge of competition in the international market from a fresh source of similar products.
Unfortunately, the present threat is far from a constructive one. First, an American NGO named American Federation of Labour and Congress of Industrial Organisations (AFL-CIO) has lodged a complaint to the United States Trade Representative (USTR) to the effect that the export-oriented industrial units, especially the RMG and the shrimp and frozen foods producing factories of the country are violating both domestically and internationally recognised standard of workers' right, particularly those set by the International Labour Organisation (ILO).
Further allegations that this US-based NGO made say that the security forces of the country are harassing as well as inflicting violence on the trade unions, workers and pro-labour NGOs in the different industrial units both within and without the Export Processing Zones (EPZs).
On the basis of these complaints, AFLI-CIO petitioned to the USTR in order that the Generalised System of Preference (GSP) facility that Bangladeshi exporters have so far been enjoying in the US market is withdrawn. It is worthwhile to note here that the said US NGO has a lot of influence in the Democratic Party which dominates the US Congress. What is more worrying is that the 2007 GSP annual review has accepted the petition lodged by AFL-CIO. And on the basis of this petition, the USTR has also arranged a public hearing of the allegations of workers' right violation made against Bangladesh.
The aforementioned developments in the USA were reported through a letter sent to the Commerce Ministry by the Commercial Councillor of Bangladesh Embassy in Washington DC. The letter urged the government to take the issue seriously.
The said letter from Bangladesh embassy in Washington therefore has duly urged the government to submit the pre-hearing brief to the USTR's GSP programme before September 21.
In the present US Congress, as mentioned earlier, the Democratic Party is enjoying the majority. If the NGO reports about the alleged violation of workers' right in Bangladesh's garments and other industries draw a sympathetic hearing from the US Congress, then that may spell disaster for the overall overseas export from Bangladesh, since the US is the major destination of this country's export. On this score, one must not forget the fact that about 36 per cent of Bangladesh's total export goes to the US market.
It will not be out of place to recall here that the same US-based NGO made similar complaints of workers' right violation in 2005 against Bangladesh's export industries.
All the stakeholders in the export sector, therefore, need to face this threat to the garment sector, or the entire economy for that matter with all seriousness and in a concerted manner.
While such worrying developments are being reported from Washington, a very large destination of the country's export sector, disturbing pieces of news are coming also from within the export processing zones of the country. The violent clashes between the government's security forces and the garment workers on last Friday over a very trifle incident of a stolen mobile phone cannot under any circumstances be taken lightly. The rumour that led to the workers' unrest in Dhaka Export Processing Zone (DEPZ) in Savar was that a garment worker was being kept in captivity within a factory or that he might have been killed. Hundreds of workers concerned about the whereabouts and well-being of the missing workers from within DEPZ as well as from outside gathered and held angry demonstrations.
To ward off further chaos and violence within the DEPZ, the security forces had to deal with the situation accordingly, because otherwise it could have turned for the worse. Whatever is the truth surrounding the missing worker, it is up to the government's law enforcement department and probe body formed to this end to find out and take steps to punish the culprits involved in the incident. Unfortunately for the garment industry, there is the danger that the story of this apparently isolated incident within the DEPZ can be blown out of proportions and reported in a distorted fashion in the Western press. It would not be surprising if one suggests a possible linkup between the DEPZ violence and the developments in Washington surrounding Bangladesh's exports there. Such suggestion would have few eyebrows raised, if one recalls the string of violence that visited the entire garment industry at the fag end of the four-party alliance government. At that time, too, the violence spread without rhyme or reason, though in the beginning it was all about the usual workers' demands for hike in the wages and benefits thereof. But the way many garment units were being ransacked and damaged by hoodlums passing for workers astonished many at that time. Even the workers of the affected industries said that they cannot damage their workplace, since it was the source of their earning.
In the wake of the chaos, the government, the trade unions and the garment owners association together sorted out the issues together and fixed Tk. 1650 as the minimum wage of the workers.
In reaction to the Friday's violence in the DEPZ in Savar, the chairman of BEPZA said that there was no cause for pay-related unrest at least in DEPZ, since this particular EPZ was drawing large investment. The workers, too, were receiving their wages according to the agreement.
Against this backdrop there is no scope to take the developments affecting our export potential both at home and abroad in a light-hearted manner. For it is a life and death question of our survival as a viable economy in the global marketplace.