The history of the leather industry parallels that of the country's: struggling against all odds during its infancy in the 1970s, adolescent undulations throughout the 1980s, disorganised boom in the 1990s, and a game-changing crossroads in the early part of the 21st Century. That crossroads for the country is whether it will shed its lowly tags and climb the middle-income ranks; and for the leather industry, whether it will transform out of its environment-eroding past to shake global markets as our RMG industry did in the 1990s?
Let us not mistake what is at stake. Relocating from its 30-hectare Hazaribagh pocket adjacent a major residential area to the more spacious Savar industrial park is a shift much like in the cowboy age, from the "Wild West" of the gold-rush era to the effluent-controlled, law-abiding industrial ballpark, but also an opportunity to seize the occasion to modernise equipment, train workers, and restructure supply to feed not just a booming domestic market but also increasingly hungry foreign consumers. Further, since China's upgraded international position prevents the world's largest supplier of leather products from remaining competitive much longer, Bangladesh stands to gain a lot of ground here as it did in the apparel market and for the same reason: lower wages at a lower developmental stratum. Ultimately, domestic reform and international opportunity must blend with resource availability; and Muslim Bangladesh not only has ample cows (1.8 per cent of the global stock), goats (3.7 per cent of the global stock), and buffalo to supply the bovine, ovine, and caprine leathers globally desired, but its Eid-ul-Azha festival automatically supplies a large chunk of hides on an unfailing basis as well.
Though Bangladesh produces about 3.0 per cent of the world's leather, that it supplies only 0.5 per cent of globally traded leather opens a huge window of opportunity it must capitalise upon straightaway. Entrepreneurs, governmental officials, and international organisations have not been blind to the possibilities. Reform-driven meetings between leather association leaders and the industry ministry officials between 2000 and 2012 led to the Savar relocation plan, augmented by the Asia Foundation's support to build a central effluent treatment plant (CETP), without which rivers would be polluted and the environment contaminated beyond repair. For reference, in 2003, the country barely exported about $270 million worth of leather products, but in quick succession, it crossed the $1.0 billion export mark in 2013, then netted $1.29 billion the very next year. Ecstatic, those same reformers leaped to a $5.0 billion target out of the $215 billion global market by our 50th independence anniversary. Technically feasible, our leather industry has the potential to reach $15 billion of exports if, and only if, more CETP-like domestic reforms and China's post-industrial restructuring continue: the European Union has explicitly expressed interest to help such growth and former U.S. Ambassador, Dan Mozena, distinctly saw that possibility in making leather one of his "four legs" to build a viable future Bangladesh economy from (premised as they are upon domestic reforms).
Over 200 tanneries exist in the country, some capable of large-scale global-level operations, others too transitional to survive a cut-throat business. Of the 113 well-rooted Hazaribagh plants that Mansur Ahamad counted in his study for the Japan Bangla Business Centre, seven were very large in size (producing more than 5.0 million square feet, and accounting for 17 per cent of the country's tally), 13 large (producing between two and five million square feet, and accounting for 29 per cent of total production), 45 medium (producing between one and two million square feet, and accounting for 33 per cent of the aggregate), and 48 small (producing below one million square feet, and supplying 21 per cent of the country's production). If we include value-added leather products, the industry accounts for about 2-3 per cent of the country's enterprises, with over 800 establishments, and absorbs 1.3 per cent of the country's workforce.
Against governmental inducements and, increasingly, sanctions (even in 2016 tanneries still in Hazaribagh have been notified of eviction if they do not shift to Savar), 155 tanneries had relocated to Savar by December 2015, as Syed A. Al-Muti's and Nayef Ahmad's "In Asia" article noted. At the leather crossroads, then, the industry's "take-off" in the right direction must be a boon for the country at its own crossroads. Follow-up action on the global front beg attention: membership of the International Footwear Association is a must, as Md. Harunur Rashid observed in the "Daily Sun" recently; joint ventures need to be chalked out, much like one with China; and existing global retailers should be reassured their conditions have been met and both quality and environment-friendly products can be guaranteed.
Those products themselves span a wide range, from the smallest (purses, wallets, hand-bags, and the like), to the medium (jackets, portfolios, footwear, suitcases, and so forth), and the large (upholstery, for example): some are favourites among tourists, others add elegance to those who can afford it, yet others are required of every individual. In other words, the market is insatiable, borderless, yet scrupulous enough increasingly to prevent environmental damage (over 200 tons of tannery effluent, as well as liquid and solid chemical wastes, get dumped into the rivers every day), child labour, dangerous factory conditions, and human-rights violations.
Whichever way we look at the leather industry, it is a case of déjà vû, a path fairly well-trodden with our breakthrough RMG industry: we have the low-wage production global retailers seek, and ample workers to remain globally competitive for at least one generation (20-5 years); we also have both get-rich-quick and considerate businessmen to supply the capital and reap foreign-exchange earnings; international agreements have been made everywhere, depicting how to strive to remain on the positive side of any measurement; and global opportunities have arisen that we feel as qualified to exploit as any other countries.
On the flip side, worker exploitation cannot be avoided, but it will not go away without international monitors; the same is true of environmental safeguarding; and finally, the half-million workers already in the industry can only multiply, and with them a wide variety of problems, unless the desired targets are diligently pursued within a conducive socio-ecological framework. In other words, the leather industry has all the incentives to follow in RMG footsteps, become the second-largest foreign-exchange earner, and thereby vault the country closer to its own developmental targets; and it has the same kind of a lengthy cottage-industry history that the RMG industry did with Muslin, to be able to not only graduate into the global league, but also shine.
Just like the product itself, the leather industry must be nurtured. It would enormously supplement RMG earnings; but, as the next article shows, it is not the only one capable of doing so: the pharmaceutical industry also awaits it call.
Dr Imtiaz A Hussain is Professor, International Relations, formerly Universidad Iberoamericana, Mexico City.
inv198@hotmail.com
Leather: A future feather?
a 10-part series by Imtiaz A. Hussain examines one sector in one article on each Tuesday and Friday of our independence month, beginning March 01 and ending on April 01 with an overall appraisal. The fifth article of the series follows | Published: March 15, 2016 00:00:00 | Updated: March 14, 2016 19:54:50
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