In the recent past we have seen some comments in the media that have not reflected positive sentiments. I am referring here to views expressed regarding the fulfillment of conditions associated with the regaining of GSP (Generalised System of Preferences) facility with the USA and those generally agreed upon pertaining to the requirements to be met in the RMG (ready-made garment) industry.
It has been pointed out that though the private sector and the government have tried to meet the conditions required for regaining GSP facility, three important issues have still not been resolved. The three conditions include appointment of 200 more inspectors to check the safety situation in RMG factories, allowing trade unions in export processing zones (EPZs) and creating a database on registration of trade unions and inspection of factories. One understands the insistence on the fulfillment of these conditions is being insisted upon by the American Federation of Labour and Congress of Industrial Organisations (AFL-CIO). In this context, it has also been stated by the Bangladesh authorities that while trying to meet these demands, efforts are also being made to obtain duty- and quota-free access for its entire products-range entering the USA. In that case, the opportunity will be similar to that existing with Bangladeshi products entering the European Union (EU) under the Everything but Arms (EBA) principle.
The European Delegation in Dhaka has expressed its disappointment that all the suggested conditions that were mentioned last year with regard to safety of workers and their working conditions have not been met. One needs to understand that the consumer lobby and the activists in Europe have been pursuing with great care the labour rights of workers in the RMG sector in Bangladesh. Over the past year the factory owners in the RMG industry seem to have taken a few steps, but it does not appear to have been enough.
This reaction has been reflected in the media following inspection by engineers hired by European brands and retailers within the paradigm created by the 'Accord on Fire and Building Safety in Bangladesh'. The safety checks were started from February 20 this year. 68 factories have been inspected so far. It is anticipated that 250 factories will be inspected each month and such efforts will continue until the end of September this year. Their inspections have started with the high-risk buildings that have more than five floors. These inspectors will be working with representatives from brands who are purchasing from Bangladesh, labour union and factory owners' representatives and officials of the Ministry of Labour. It may be recalled that the legally binding agreement which is the basis for such inspection was signed in May 2013 in response to a building collapse in April that killed 1,135 people. The deal under the Accord requires brands and retailers to pay up to US$ 500,000 per year to administer the inspection programme. The International Labour Organisation (ILO) is also associated with this inspection process.
These inspectors have identified major electrical and structural flaws. Electrical safety problems have been specially highlighted. Cables were found laid out directly on the concrete floor without proper safety. The inspection teams also found overloading of goods on different floors in factory buildings, insufficient exit capacity through the exit doors and absence of sufficient sprinklers.
It is good that the existing problems are being identified. Such inspection by engineers should also include trained technical personnel available within Bangladesh. It should not totally rely on foreign experts. Such an arrangement would then assist in future inspection and maintenance. Our engineers could then also learn and gain requisite experience that would be most useful in the future.
In the meantime, the factory owners should take immediate steps to correct the structural and other defects that have come to light. The government should, with the cooperation of the BGMEA (Bangladesh Garment Manufacturers and Exporters Association) and the BKMEA (Bangladesh Knitwear Manufacturers and Exporters Association), ensure such corrective measures and compliance.
It has come to light that all the factory owners in the RMG industry have not, as yet, raised the wages of all their workers in conformity with government order. Human Rights Watch has remarked that workers who are trying to form unions are being intimidated and threatened. These things are unacceptable. Necessary steps need to be taken to be in conformity with the agreed matrix. Our RMG owners could probably learn from the manner in which the Korean company, Youngone, is handling the rights of its thousands of workers in different factories located in the EPZs in the KEPZ in Chittagong and in the EPZ near Dhaka.
We have to remember that the success of our RMG industry is under scrutiny from our competitors. They will try their best to find faults so that buyers move away from Bangladesh to other destinations. That is why we have to be careful and take care that the human rights situation in this industry is beyond reproach.
It would accordingly be correct at this juncture to note that recently more than 40 participants from Bangladeshi businesses, government agencies, trade unions and civil society came together in Dhaka to identify concrete actions that could be undertaken to improve human rights situation in the RMG sector. The multi-stakeholder forum was organised as part of the "Pillars in Practice" programme, a joint initiative of the CSR Centre (Bangladesh), Social Accountability International (USA) and the Danish Institute for Human Rights. Participants in the multi-stakeholder forum recommended actions for companies, civil society and government agencies in different areas - environmental sustainability, working conditions, occupational health and safety requirements and scope for trade union activities. All concerned need to take account of the suggestions made in the meeting. A concerted effort in this regard will definitely enhance accountability.
I am an optimist who believes in moving forward. I inspire myself by looking at our past and how we have gradually climbed the ladder - from being supposedly 'an international basket case' (Kissinger) to a country which today is at the doorstep of becoming a middle-income country. Compared to 1972 when our export was in the region of US$ 300 million, by end 2012-13 fiscal year it climbed to around US$ 27 billion. It would also be worthwhile to note that Bangladesh received US$ 2.78 billion in aid last fiscal, but the net aid was US$ 1.89 billion, and US$ 899.5 million was spent in repaying earlier loans and accrued interest. Our foreign exchange reserve has crossed US$ 20 billion despite LC settlements for the period July to January of the current financial year (2013-14) reaching US$ 21.21 billion.
The fact that our economy is rising and development is taking place has become evident with another statistics. Capital machinery import, a significant indicator of this dynamics, has been reflected through such import rising by 18.25 per cent during the current July-January period as compared to 21.59 per cent negative growth during the same period of fiscal year 2012-13 and 15.85 per cent negative growth in 2011-12 (according to the Bangladesh Bank). Despite this increase in imports, according to Bangladesh Bank, our trade deficit in the first half of the current fiscal year, 2013-14, has fallen by about 58.29 per cent to about US$ 1.53 billion, year on year. It has also been recently revealed that our overseas merchandise shipments stood at US$ 22.242 billion during the July-March period of this financial year. This is welcome news.
Yes, there are also worries. It would be misleading to think that we have no problems ahead of us. It is clear from the half-yearly report released by the Finance Division that indicators associated with the service, construction and the manufacturing sectors reflect that there has been adverse impact and that these areas are still recovering from the restive political situation that marked our socio-economic horizon during 2013. It is now believed that due to relatively lower receipt of remittances from expatriate Bangladeshis, higher inflation and slower growth of revenue, our GDP (gross domestic product) growth will be less than what was estimated earlier.
Nevertheless, we need not be overcome with anxiety or concern about a possible recession. Our economic scene, thanks to our innovative private sector and public-private partnership, will continue to evolve its own denominators.
In this regard, it is heartening to note that entrepreneurs are already examining, seriously, the prospect of diversification and greater investment in enhancing the skill of our workforce. They realise that continued diversification of the range of Bangladesh's export-suitable products and discovery of new markets are vital for the economy and also important for garnering new investment. The RMG and the pharmaceutical sectors have already taken the lead and their efforts are paying dividend. Their efforts can be replicated by identifying new markets and marketable products with the help of our diplomatic Missions.
One exciting area that needs to be seriously pursed in this context is Bangladesh is becoming an important player in the group involved in providing software and IT services. The Bangladesh Association of Software and Information Services (BASIS) has indicated that local software and IT vendors exported services and products worth US$ 100 million in 2012-13, a 50 per cent rise from the previous year.
They feel that this can increase to US$ 1.0 billion in five years if more investment-friendly ICT policy can be put in place. We still have a weak infrastructure in this sector but with political will and more pro-active engagement in skill enhancement this can be remedied.
With commitment and innovation we will continue to rise.
The writer, a former Ambassador, is specialised in foreign affairs, right to information and good governance. mzamir@dhaka.net
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