Against all odds | The Daily Star
12:00 AM, December 07, 2014 / LAST MODIFIED: 01:53 AM, March 08, 2015

Against all odds

Against all odds

It all started with Reaz Store becoming Reaz Garments back in 1978

It all started with a small tailoring shop in Dhaka.

In 1978, the owners of this small venture called Reaz Store got an order for 10,000 pieces of men's shirt. Until then it had only sewed clothes for Dhaka's fashion elites. And now they were just overwhelmed with this new opportunity.

Reaz Store changed its name to Reaz Garments, used its full force night and day to cut and sew cloths. And then finally shipped the product to a Paris store. The order was for 13 million Francs.

That was the journey for Bangladesh's readymade garment industry. Today, it is a whopping $25 billion export industry that has placed Bangladesh as the second largest apparel exporter after China.

This is an amazing story by any count. It is a story of entrepreneurship, resilience, innovation, salesmanship, understanding of global trade and above all it is a story of our millions of workers, to be exact 4.4 million strong, who were quick to acquire skills, work diligently and efficiently to make Bangladesh shine so bright.

But that is not the whole story. It runs much deeper and broader, much more meaningful too. Eighty percent of these workers are female who have suddenly come out of homes in hordes, started earning on their own and then retiring to a meaningful life setting up small businesses from goat rearing to small trade.

Their consumption pattern has changed, triggering investments in a whole new range of industries such as cosmetics and sandals and cheap clothes. Banks and insurance companies mushroomed. Transport business boomed. A massive backward linkage industry in yarn, clothing and accessories grew. Carton units were set up. Labels are printed in another kind of units.

It is actually very difficult to say which sector of the economy is not touched by the garment sector that is projected by McKinsey & Company to be a $45 billion export powerhouse in another six years.

The journey that started with a mere 13 million francs equivalent to $13 million in today's conversion rate has today matured into a major strength for Bangladesh. For every three people in Europe, one is wearing a Bangladesh's tag. In the US one in every five people is carrying the Made in Bangladesh label.

But this journey was fraught with challenges. The industry had to go through upheavals. First came the quota system from the US in the 1980s. Because of the pressure from American textile lobby, the US restricted the quantity of apparels that each country could export.

Bangladesh then exported only the most basic items starting with flannel shirts (one can still recall the quota category 340). Its handful of factories were merrily shipping shirts.

The US put a restriction that Bangladesh cannot export more than 212,000 dozens of shirts a year. But already Bangladeshi exporters had shipped more than that quantity.

Bangladesh did not agree to the quota. So a team went to negotiate with the US Trade Representative in January 31, 1986. Finally the quantity was raised to 330,000 dozens.

But that was not good enough. Another negotiation took place and finally the quota was raised to 13 lakh dozens with an annual growth of eight percent.

That was a major breakthrough. Bangladesh got a secured quantity. This helped the industry grow under the quota regime.

Another jolt came when the quota system was abolished in December 2004 as part of the WTO rules. Everybody predicted a doomsday for our garment industry and thought buyers would go to other countries as they would be free to buy from anywhere.

History proved otherwise. Exports since then boomed as our entrepreneurs successfully roped in more buyers with their cheap rates.

Another blow came when the issue of child labour came to the fore with US senator Tom Harkin bringing up a bill. Underage workers then ruled the Bangladesh garment industry. If they were shed then the factories would close down.

But our entrepreneurs with the help of ILO and the government successfully phased out the child labourers to maintain their foothold on the market.

The industry was also often beset by workers' unrest over a waft of issues relating to wage and safety standards that sometimes peaked to widespread violence. Factories were burned.

But the biggest blow came in two macabre accidents -- the Tazreen Fashions fire that killed 112 workers and more recently the Rana Plaza collapse, killing 1,138.

The whole industry was reeling under the worldwide criticism. Many thought the last nail in the coffin has been hammered.

But once again the united efforts of our entrepreneurs and the government steadied the ship. The government appointed factory inspectors. Two international inspection agencies Accord and Alliance came and inspected the factories. They gave an action plan to be implemented in five years.

The entrepreneurs have come to the understanding that they have to implement the plan if they have to stay in the game. Buyers' nerves are also soothed and exports go strong.

In this whole history of garment industry, a special salutation must go to the workers. Millions of workers with little education have shown the world that they are the best tailors. Despite the sporadic unrest, the workers are the best disciplined.

A US entrepreneur who has his own brand in America told me he can never think of any sourcing destination other than Bangladesh.

“I have tried other places -- Cambodia, Pakistan, India and Vietnam. But I have settled for Bangladesh. My conclusion is that Bangladeshi workers are the best,” he said.

Another entrepreneur who had ventured into India, Pakistan and Africa also echoed the view.

Even then Bangladesh garment industry has to think of its future. Its productivity is still low at 40 percent compared to China and Vietnam's 80 percent. This calls for major technological and management changeover.

Energy and infrastructure will be the major challenges. And workers have to be skilled further. And we have to think of where the future workforce will come from because the demographic window of opportunity will not exist long.

Still given the feat Bangladesh has achieved -- from $13 million to $25 billion -- we remain hopeful of the future.

 

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