The Ashulia Disney combo

As I pen this article I notice a piece in the Wall Street Journal detailing the recent fire disaster at the Ashulia garment factory. The title "Why Bangladesh Keeps Burning" catches my attention. In my experience of keeping a close tab on news from Dhaka, this one incident has been receiving relatively wide coverage -- and scrutiny -- from the US press. It is ironic this accident took place at about the same time as Black Friday in the US. The day after Thanksgiving, referred to as Black Friday, is the biggest sales event for shoppers when retailers mark down prices on every item from the 42 inch TVs to winter jackets. It is hard to miss the connection that like in every holiday season, this year as well a large number of retailers were stocking their shelves with clothing made in Bangladesh when the factory fire broke out in Dhaka twelve time zones away.
It is this consumer demand in the global markets for affordable clothing, ones which commercials here flaunt and Walmart and Sears put a hefty discount on, that creates the market which factories like Tazreen Fashion feed into. While a textbook example of an increasingly globalised marketplace, it is also a glaring evidence of a race to the bottom -- the lowest costs. Sadly, Bangladesh's low-skilled abundant labour has become the lowest cost denomination in this global equation.
It was notable that few US shoppers seemed unaware of what had happened in Ashulia last week. Despite recent activism amongst average Americans via social media, this was not one which caught people's attention outside the mainstream media. In the past few years, a generation of tech-savvy Americans has taken to Twitter and Instagram to learn, voice and mobilise around social causes -- from the election of Barack Obama to tracking Hurricane Sandy, from campaigning against a warlord in Uganda to calling for calorie counts on food labels, everyone seems to have an opinion. Yet I noticed few on this blog roll who had tweeted about the Ashulia inferno or mentioned that Disney was making its Lightning McQueen sweatshirts at the same factory where a hundred plus workers perished. Amidst all the connectedness via iPhones and Droids, there is a definite disconnect between the consumer who wears that hoodie "Made in Bangladesh" and the realities of working life for Bangladeshis stitching away halfway around the world.
This lack of awareness -- you may call it ignorance -- is in stark contrast with the sheer magnitude of consumer demand in this market. The US is after all the top destination for Bangladesh's booming garments industry. Benefitting from abundant labour and significant investments over the last two decades, a massive manufacturing sector has built itself up to cater to the global markets. Policymakers laud this intersection as a classic example of a functional globalised economy where demand meets supply in its truest meaning. Bangladesh today is a garment powerhouse -- with $18 billion a year in exports, the sector constitutes around 13% of the country's GDP.
As a producer, Bangladesh ranks second behind China and is widely expected to become the top player by virtue of its price competitiveness and capacity. More than three million workers are employed in the country's 4,500 garment factories, most of them women. The sector has acted as an engine behind the economy's growth, providing much needed employment. Along with the homegrown microfinance industry, this sector might be Bangladesh's biggest homegrown commercial success story till date.
But with success, Bangladesh faces its own challenges. As the WSJ article rightly points out, the country has become overly dependent on a single sector to drive its growth. Unknowingly, Bangladesh's political economy might have become prey to its own wonder sector -- a relatively weak government and a powerful industry whose trajectory has a disproportionate influence on politics and policies.
On one hand, well-connected garment manufacturers from both parties sit in parliament and have secured preferential import duties and special economic zones for the industry. On the surface, this is no different from any growing industry in any country; however, in a local version of a "resource curse," Bangladesh might have stifled investments in other sectors while sacrificing labour wages and workplace safety. On the other hand, government policies are leading more members of a rapidly urbanising population into a single industry with poor wages and conditions while not supporting other industries which could generate jobs to absorb the large labour force.
The Ashulia fire should be a wake-up call for Dhaka on a few levels: beyond the obvious enforcement of fire-safety measures in facilities like those of Tazreen, policymakers need to recognise the pitfalls of relying on a single industry for the country's growth. Bangladesh needs to diversify its manufacturing base, enacting favourable market policies and attracting investments in other high growth areas, including technology and healthcare.

The writer is a freelance writer, raised in Dhaka and currently based in Chicago.