Bangladesh can't afford a crisis in the RMG sector

On 17 September 2024, a female ready-made garment worker died during a clash between workers in Ashulia, Dhaka. The clash occurred between workers of two factories, debating whether they should return to work or continue their protests. 

Prior to this incident in September 2024, more than a hundred factories had closed due to multifaceted issues, including worker protests, clashes and fears of vandalism. Many factories had already witnessed arson and vandalism.

Since the late 1970s, Bangladesh has emerged as a key player in the textile and apparel sector, securing its position as the second-largest garment exporter in the world. The ready-made garments (RMG) sector is considered the lifeblood of Bangladesh's economy, annually contributing $47 billion—amounting to 82% of the country's total export earnings—and employing 4.4 million workers, 80% of whom are women. 

Beyond its economic contributions, the RMG sector plays a crucial role in social development by providing jobs for millions of women, promoting gender equality, and helping to alleviate poverty by offering stable employment to low-income individuals. Given its profound economic and social impact, especially as Bangladesh rebuilds after the August 5th revolution, the ongoing crisis in the RMG sector is something the country cannot afford to prolong.

How we got here

The crisis in the garment industry began looming after a gas shortage, caused by damage to an LNG terminal in May 2024, forced factories to operate at less than 30% capacity or shut down entirely. The situation worsened in July, as students began protesting for public service reform, and by the end of that month, the protests escalated into a revolution.

Since the former government was ousted, the RMG sector has continued to face unprecedented challenges, driven by political unrest, economic difficulties, and deep-rooted labour grievances. The two-month-long demonstrations, curfews, internet shutdowns and ongoing energy crisis have led to significant economic losses in the RMG sector—especially during July, August, and September, which are peak seasons for Christmas shipments and orders for the next summer and spring seasons.

On 29 August, the crisis intensified as factories in industrial areas began to close due to worker protests and vandalism. The government had to deploy the Bangladesh Army to maintain law and order in industrial areas. While the army's intervention led to the resumption of operations in some factories, the situation has yet to be fully resolved.

Reasons behind the unrest

Several key factors are driving this unprecedented crisis. Workers are demanding fair treatment, including equal opportunities for men and women, higher wages, better benefits, and lighter workloads. They are also pushing to resolve issues like delays in wage payments, the alleged blacklisting of dismissed workers, and conflicts over unionization, all of which have fueled frustration and anger.

On the other side, many factory owners claim external forces are stirring up protests, particularly regarding the scrap and reject trade, known as the "Jhoot Business." Some even suggest there are conspiracies aimed at weakening Bangladesh's main export industry.

A case of old wine in a new bottle?

Labour protests and unrest in Bangladesh's RMG sector are not new. Over time, protests have occurred over issues such as labour rights, wage demands, external pressures, and economic disarray. However, the current situation is more complex, with a combination of factors fueling the unrest.

The critical question remains: can Bangladesh afford to let this situation continue? In simple terms, the answer is no. Bangladesh cannot afford to prolong this crisis, considering the severe impact it would have on the country if it persists for too long.

Since August 5, many have referred to the current state of the nation as 'Bangladesh 2.0.' In this new reality, there are opportunities for the country to address its past and carve a path toward a better future. However, this new reality has also brought fresh challenges.

First, the country's economic activities are still recovering from political turmoil and subsequent instability. The RMG sector is also vital for Bangladesh's export market and overall economy, representing around 82% of total exports. Any disruption in this sector could trigger a domino effect, negatively impacting the entire economy.

Moreover, this is a crucial season for the RMG sector, as factories are supposed to be fulfilling foreign buyers' orders for winter clothing. If these orders are delayed, buyers may be forced to cancel them and seek alternative producers in other countries. Furthermore, if claims of external conspiracies are true, this presents a serious threat to Bangladesh's economic, social, and political stability.

Way forward

To resolve this crisis, a multilateral negotiation process is crucial. Factory owners, workers, and union leaders must acknowledge the severity of the situation and refrain from violent actions. Factory owners should promptly address workers' legitimate demands, including timely salary payments, equal opportunities, and improved welfare benefits. Reforming the practice of blacklisting workers is also essential, as it can unfairly end careers and is often misused.

Given the government's commitment to democracy and human rights, this issue demands serious attention. Additionally, owners should involve workers more in the production process, encouraging a sense of ownership and responsibility.

In return, workers must remain dedicated to their jobs and avoid destructive behavior. They need to understand the broader economic challenges and prioritize dialogue as the primary method for resolving disputes.

The government must play a key role in facilitating dialogue among all stakeholders, including security officials, civil society, factory owners, union leaders, activists, and workers. With the police not yet fully operational, the presence of the Industrial Police in key areas should be increased. Additionally, the government should investigate allegations related to the scrap business and external influences, as these could pose serious risks if proven true.

Ultimately, it's important not only to resolve the current crisis but to use this opportunity to build stronger coordination among all parties involved, helping to prevent future crises in the RMG sector.

Imran Hossain, Lecturer, Rabindra Maitree University, Kushtia.

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.