Pennies for his thought
EVEN with my weakest knowledge of French, I know that a person who speaks too much and makes little sense is called “bavard.” Unfortunately, there are too many “bavards” in prominent positions who speak too much in haste and later regret the consequences too fast. The recent faux pas exceeds all limits of propriety. A very powerful person of a political party ended up calling a US visitor “a minister worth two pence.” As things stand today, the US seems less likely to reinstate the GSP privilege, which was suspended on June 27, 2013, in view of “insufficient progress by the Government of Bangladesh in affording Bangladeshi workers internationally recognised worker rights.” With grand narratives like the one delivered 3 days back attacking the visitor who is responsible for South and Central Asian Affairs, things are most likely not expected to change in terms of reinstatement of privileges.
Why is it so difficult to balance strategic engagement and pair it with meaningful progress? Of course, there'll always be bodies which anyhow critique industrial practices and look for only the black dots in the landscape. Of course, there will be coordinated efforts to dismiss any improvement and constantly refer to a few deviations. But the need of the hour is to highlight what has been achieved in the last one year and eight months. That progress has been made is beyond any doubt. That the industry has moved with fastest possible speed and has been audited, is now being subjected to speedy remediation are also realities that none can deny. That the private sector of Bangladesh has remained resilient and rooted in its own focus also speaks a lot for the spirit of sovereignty in the land that we live in. However, there are times in history when a nation decides to strategically align itself with multiple blocs. Those are times when the policy makers prepare a state for seamless transition. But rocking old boats before concrete gains have been made from promising alliances is perhaps not the best way to go.
Apparently we need more Foreign Direct Investments to bump our growth to 8%, which will make us become a Middle Income Country (MIC). But every bit from every other possible corner helps. And one corner just happens to be the ready-made garment sector (RMG). Conversations on RMG these days happen to evolve around a few threads, including compensation for victims in Rana Plaza and Tazreen, labur rights and GSP. Apart from these, an essential development conversation needs to happen and be considered by both the policy makers and the US. The story of 384 factories, with 120,000 workers in 1984 -- which increased five-fold by the next decade to slightly more than 2,000 factories with over a million workers which, by 2004, became 4,000 factories with two million Bangladeshis working in textile factories -- is a success story that can best stand for women empowerment.
Way back in the 1990s, female workers accounted for only a quarter of the workforce. The female share of new employment in industry was 39% in the mid-1990s and eventually rose to 60% in 2000, and now more than 80% are women. Primarily because of the female participation in the economy, most of our figures look promising. Planning Commission suggests that poverty incidence is likely to have declined to less than 25% in FY14, compared with 31.5% in FY10. Employment and wage growth are likely to have boosted shared prosperity -- increased the income of the bottom 40%.
According to the UN Human Development Report 2014, Bangladesh has graduated from the Low Human Development (LHD) category to the Medium Human Development (MHD) category. Income per capita has grown by 12.90% to $1,190 this fiscal year to take the country closer to the middle-income bracket. In 2012-13 fiscal year, Bangladesh's annual per capita income rose to $1,044 from $923 after the base year was altered to 2005-06 from 1995-96 and, according to Planning Commission, the per capita income of Bangladesh will cross $2,000 by 2021. Our country will be regarded a middle-income nation if it achieves at least an average per capita income of $1,036 for three consecutive years, with the figures being inflation adjusted. The per capita income last fiscal year was $1,044. So the possibility of Bangladesh becoming a middle-income nation by 2021, when the country celebrates its 50th year of independence, is an achievable dream.
What about our competitors? Possibilities of China slowing down on manufacturing and exporting garment seem to be remote as the Chinese are now concentrating on the Western region of the country. In 2013, only in textiles and apparel, a $1.3 billion increase in US imports from China was reported and the total US import from China had shot to $46.2 billion. One also needs to know what China is doing to create a sustainable industry. Chinese manufacturers today are pledging not to rely on cheap labour and poor environmental performance, but are attempting to assure competitive quality output to attract international sales. Chinese manufacturers believe that apparel businesses is no more going to be a race to switch from one low-cost producing nation to another, rather it is going to be an integral conversation on sustainability. In fact, for all of us, times are approaching when inexpensive labour is going to be a rare commodity. Times are approaching when innovation to improve efficiency will count the most and when transparency in supply chain will be the critical discourse in fashion and trading.
In a world that's changing fast, Bangladesh needs to embrace the fact that though US has gradually increased its imports from Bangladesh, there is still a lot to be achieved, and by no means should the country give up its hopes on the US imports increasing further. US imported goods worth $5.4 billion from Bangladesh, a 9.0% increase ($440 million) from 2012, and up 158% from 2003. In 2014, till September 2014, the total exports to the US stands at $4.13 billion.
On February 11, USTR conveyed that the challenges that need to be overcome and convince the US of Bangladesh's willingness to further trade opportunities evolve around the issues of labour inspectors, collective bargaining and EPZ reforms. On that very same day, speaking at the hearing was our recent visitor from the US, Nisha Desai Biswal, Assistant Secretary of State for South and Central Asian Affairs at the State Department, who had said that the US would “continue to push for urgent reforms to improve worker rights and worker safety in Bangladesh.” Improving labour conditions do not run contrary to the RMG sector's desire. Many changes have taken place in this country. Many are yet to happen. As long as the changes benefit the workers who are primarily women, there should be no resistance. Rather, instead of saying that we have achieved optimum compliance, if the sector maintains a transparent position and admits that much needs to be done and that we are progressing and that we fully commit to feasible deadlines, the suspicion of “not doing enough” will end and the progress then will be more likely to be viewed positively.
But the spoilers come from different quarters ridden with random comments from people in position that often send the possibility of increased trade with the US flying back to the rusty lamp, which only a genie shall ultimately control. Besides, who will be our Aladdin in the new act?
The writer is Managing Director, Mohammadi Group.
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