Effect Of The Garments Sector in Bangladesh On the Living

Standards of its Workers

Research Question:

How has the garments sector in Bangladesh boosted the current economy of Bangladesh,

leading to a significantly improved standard of living?

Thesis:

Bangladesh’s Garments industry is the most beneficial sector in Bangladesh for both the

economy and for improving the living standards of the people.

1

Effect Of The Garments Sector in BangladeshOn the Living Standards of its Workers

Introduction

Bangladesh’s garments industry has contributed immensely to the development of

the country since it’s beginning in 1976. Acknowledged internationally for quality and

cheap labor the Bangladesh’s garments industry has become the largest growing sector

and has earned the highest foreign currency than any other business sector. The

production from the garments industry are mostly exported and not sold locally making it

the single greatest source of economic growth and subsequently elevating the living

standards of the people. Currently 3.6 million workers are working, of whom 80 percent

are female, in around 4,500 garment factories. During the past decade Bangladesh’s

garment exports quadrupled to $24.3 billion in 2012, this constitutes eighty percent of the

country’s total exports. Analysis of the history and background of Garments Industry

with other main industries of Bangladesh will provide a reflection of the effect the

Garments Industry has. Moreover factors like education, healthcare, financial situation of

the workers confirms to the improvement of living standard. The role of the government,

foreign factors and international market for garments also affected the Garments Industry.

The Bangladesh’s Garments industry is the most beneficial sector for both the economy

and for improving the living standards of the people. (World Socialist Web Site)

Bangladesh’s Garments industry has been the most beneficial sector for both the

economy and improving the living standards of the people in Bangladesh. Although

Bangladesh’s largest employment sector is agriculture for domestic consumption, the

single greatest source of financial development in Bangladesh is from the profit gained

from exporting textiles is. (Promotion of Labor Standards in Bangladesh's Garments

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Sector) As written in an article, “Bangladesh’s economy earned about $24.3 billion USD

in fiscal year 2012. Bangladesh is the third biggest garments exporter in the world. It

exports over US $10 billion worth of garments constituting 15% of its GDP” (Mottaleb,

Khondoker Abdul). In South Asia both India and Sri-Lanka were leader in this trade but

due to civil wars during the last decade it became very difficult for investors and buyers

to continue to do business, as a result Bangladesh was getting an upper hand and got

many clients.

Background & History

Bangladesh is a third world country and is slowly developing. The economic

development of Bangladesh is dependent firstly on the agricultural industry and secondly

on the garments industry. In the past few years, Bangladesh’s garments sector has

developed immensely. Although before the industry weren’t as developed and enriched

as it is now. The garments industry is a promising step in the field of Industrialization.

The garments industry had opened up many opportunities for employment in Bangladesh.

The unemployment rate declined due to hiring in the garments industry. The hiring of

uneducated and unskilled women was a significant contribution as this provided not only

foreign currency but at the micro level elevated poverty from many poverty stricken

homes.

RMG industry, the short-form of Ready-Made Garments industry began

developing in Bangladesh, mainly as an exported oriented industry. Due to increase in

personal disposable income and change in life the domestic market for RMG has been

increasing fast. The RMG sector rapidly achieved high prominence in the sense that

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unemployment was decreased, high contributions to the GDP of the country and foreign

exchange earnings.

The RMG sector, most importantly created a strong private sector of a group of

motivated entrepreneurs who formed a strong private sector. Many of the entrepreneurs

are women. In 1977, a women entrepreneur established one of the oldest garments

factories named the ‘Baishakh Garments’ (Bangladesh Economy Profile 2012), and many

women in the past couple of years hold executive positions in RMG industries. During

the last fifteen years the hundred-percent export oriented RMG industry grew from a few

garments industries to now around four thousand five hundred garment factories. This

made many businessman invest more into the garments industry and also provided

income source for millions of unemployed people, specially women.(Bangladesh

Economy Profile 2012)

Chart 1: Share of Female Employment in Bangladesh in RMG and Industrial Sector.

This massive success brought foreign currency, elevated unemployment and as a result

made the life-style of many people better. The Chart 1 above shows how women were

always having more employment in the Readymade Garment Industries as compared to

the Industrial Sector. Since the Garment industries require very minimum training as

4

compared to the industrial sector more women can work and help to add to the monthly

income of their families. Although the Chart 1 is dated back in the 1986 – 1996 range

which a very longstanding data but the point to be noticed here is the Industrial sector has

been around way before than the readymade garments industry, even then the Industrial

sector did not manage to utilize the female population of Bangladesh as much as the

Readymade garments industry did in their short span of time.

The Garments Industries have made a generous contribution to the GDP of

Bangladesh. As can be seen from the Chart 2 below showing the GDP of Bangladesh, the

GDP was $20 billion in 1975, only four years after the country’s independence, to $115

billion in 2011. The gradual increase of the GDP reflects the fact that the Garments

Industries profit from the foreign investors, exports and even local market have

influenced and helped the GDP to rise as it was and is the most profitable industry

Bangladesh has and is depending on.

Source: Based on the World Bank Data

Chart: 2 GDP of Bangladesh 1960-2011

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In preferential market access to European markets and North American market

are two non-market factors that played a crucial role in the continued success in the

garments sector in quotas under Multi-Fiber Arrangement. (Jahan, Momtaz) (Ahmed,

Fauzia Erfan) Multi-Fiber Arrangement or (MFA) is an international trade agreement on

clothing and textiles that was active from 1974 till 2004. Developing countries imposed

quotas that could export in the form of yarn, clothing and fabric to developed countries.

(Jahan, Momtaz) The garments industry in 2010-2012 earned more than 10.7 billion UDS

from exports, employed more than two and a half million workers, comprised over 4500

factories and accounted for more than 76% of Bangladesh’s total export earnings.

(Mottaleb, Khondoker Abdul)

In the section below information of the main industries that also contribute to the economy of Bangladesh are given:

Agriculture:

Bangladesh is chiefly an agrarian economy. (Bangladesh :: Agriculture) The single

largest production sector of economy is the agricultural sector. Around 60% of the total

labor force & about 30% of the country’s GDP comes from the Agricultural industry

employs. (Bangladesh:: Agriculture) The agricultural sectors performance has an

overwhelming impact on major macroeconomic objectives, such as poverty, human

resources development, food security, employment generation and alleviation.

Bangladesh’s agricultural holdings are generally small and through cooperatives the

usage of modern machineries are slowly increasing popularity. Some of the principle

crops in Bangladesh are sugarcane, tobacco, tea, potato, pulses, jute, wheat and rice.

(Barry Ison) Rice production is of major importance as it is one of the staple foods in the

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country. The percentage of rice production is 75.5 million tons in 2010 to 2012 fiscal

year. Crop diversification program, extension, credit and research and input distribution

policies that are pursued by the government are yielding positive results. (Jute and

Natural Jute Fiber Information - Natural Jute, Raw Jute Fiber from Bangladesh - About

Jute, Types of Jute) Bangladesh’s economy is now on threshold of attaining self-

sufficiency in food grain production. Contribution of agriculture sector to GDP is 23.50%

and contribution of crop sector to GDP is 13.44%. Manpower in agriculture is 62%.

(Ministry of Agriculture, Government of the People's Republic of Bangladesh)

Jute:

Bangladesh has the world’s largest and best production of jute, also known as raw jute or

natural jute. Bangladesh is the 2nd position as a Jute producer in the world with the

average production of jute 1.08 m ton/year. (Jute Industry in Bangladesh) There are about

187 jute factories all over Bangladesh, where as there are over 4,000 garments factories

all over Bangladesh, employing thrice as more people than the jute industry. "An earning

of US$ 4 from the readymade garment sector is equivalent to the earning of US$ 1 from

the jute sector (World Bank, 2006)."

Fishery:

The fisheries and livestock sector has performed excellent during the past decade and has

contributed to the economy of Bangladesh significantly. (Bangladesh :: Fisheries &

Livestock) Contribution of the fishery and livestock to the GDP is currently 3.2 and

10.11%, this contribution has affected the country’s economy due to the fact that

Bangladesh is a delta and constitutes many rivers, streams which all flow and end up in

the Bay of Bangal. Having access to so much water body with countless ponds,

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production of fish and water for irrigation and for livestock is readily available. This

fishery and livestock sector is not only limited to the rural areas but due to environmental

factors which are suitable with the climate of Bangladesh fish and livestock sectors are

also increasing in and near the urban areas too. (Bangladesh :: Fisheries & Livestock)

Tea:

In the 19th century the tea industry in Bangladesh was pioneered by the British planters,

but later the tea gardens were purchased by Indian entrepreneurs from the British

planters. (BANGLAPEDIA: Tea Industry) Indian entrepreneurs also developed new tea

plantations afterwards. “The number of tea gardens increased to 158 by the year 2000 and

covered 48,300 hectares.” (BANGLAPEDIA: Tea Industry) The tea sector contributes

about 0.8% of the GDP in Bangladesh. (BANGLAPEDIA: Tea Industry) In the tea

industry, about 0.15 million people are directly employed, so therefore about 3.3 percent

of the country’s total employment constitutes in this industry. (BANGLAPEDIA: Tea

Industry) Many more people are indirectly employed in other sectors related to tea.

Education

Percentage of the worker’s children attending formal schooling. It will give a

broader and more generalized overview of the total percentage of people who are actually

devoted into putting their children in school, and shows the garments company’s

contribution into putting the workers children in school. Rokibul a Garments worker in

Nargis Group says that he is bound to work there because there are no other alternates

and he wants a better life for his children. He mentions about his hopes and dreams

behind his kids for doing something big, and being educated. Education is a primary

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concern for many garments workers and most of the children from the garments workers

are attending primary school and hoping to finish the secondary school as well.

Healthcare

Mortality rate is the change in the mortality rate over the years and comparing it to other

countries whose economy has increased over recent years. The table 1 below shows the.

Table 1: Health Problems and wages of female workers working in

factories

Source: (Health and Occupational Safety for Female Workforce of

Garments Industries in Bangladesh)

Disease related to poverty and its decline after the garments industry has been ‘booming’

in the past 10 to 15 years.

The working environment is pleasant, the worker fells professionally secure at the

workplace. (Promotion of Labor Standards in Bangladesh's Garments Sector) Also, as

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read in another article by Jyothi Nair, it is proved that, “A congenial work environment

has a positive impact on the workers efficiency, productivity and commitment to work.”

In a working environment the managements and fellow workers behavior is also very

important. Provision for necessary physical facilities together with the improvement of

human environment can be instrumental in developing men and women as equal partners

in development.

Despite having drastically increased their presence in labor force, Bangladeshi women

still face disadvantages and discrimination at home and in the workplace. Despite the

overall societal improvements, women rights remain a challenge. Female workers

normally unable to stand up for their rights and are confined to low-wage positions.

(Jahan, Momtaz) Social disempowerment is a major problem as Bangladesh has the

highest level if domestic violence and highest rates of early marriage. (Ahmed, Fauzia

Erfan) They pay lower wages for men and women, even though they do same amount of

time with similar amount of work. (Nair, Jyothi) But this factor may defer from company

to company, and whether they fall in the 5 star factory list or below. This following factor

depends on how big the company is and the productivity they get from imports and

exports.

More than 80% of workers in garments industries are women. It is believe by many

entrepreneurs in the garments industry that they generally preferred to employ more

women than because of prevailing beliefs that women are more patient and nimble, and

more controlled than men because of their docile nature, and that women are better at

sewing and are not likely to join trade unions. (Bangladesh Garment Workers Struggle to

10

Air Complaints as Industry Dominates Economy, Politics) But above all those reasons,

many garments employ more female workers than male workers as the females are

willing to accept lower wages than men. That following factor depends allot on the

society because in Bangladesh women are degraded, and in a lower status than men.

(Bangladesh Garment Workers Struggle to Air Complaints as Industry Dominates

Economy, Politics) “In most cases, employment in the garment industry has given them

the first opportunity to earn wages, which are typically several times higher than what

they could have earned doing domestic service, one of the very few other job

opportunities open to women.” (Promotion of Labor Standards in Bangladesh's Garments

Sector). The table below shows Bangladesh has more percentage of women workers in

Garment industries than the neighboring South-Asian countries.

Table 2: Garments Industries in South Asia

Source: Background of History and RMG: Key Challenges in the RMG Industry

Women workers play a vital role to our exporting activities through RMG industry.

(Roddick, Anita) But work in this industry has not yet facilitated by proper infrastructure

and work environment.

As mentioned before the payment factors from women to men depend on their

own individual industry/factory, the productivity and the ranking of the factories as well.

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For example men and females from a five star factory will have same wages, and their

promotions will increase their salary, depending on how much effort and dedication is put

in their work. A 26 year old woman named Samina was interviewed, from one of the top,

five star, industry in Bangladesh and according to her in working environment and wages

given to them and promotions are same as the male workers. She also said that

throughout the year she gets monthly bonuses and special leaves; for example (full paid)

maternity leave, holiday leave, Eid bonus and overtime. So, therefore women do get more

importance and opportunities to provide for their families, and their wages are equal to

what a male worker would possibly get.

But in contrary, a worker from a one star or two stars ranked industry would face

the difficult challenges listed above. In an interview, with two workers from a garments

industry near Gulshan 1, workers Shahana and Rokibul mentioned their tuff secdual of

work times, poor working environment and very low wages, and poorly coordinated

overtime payment. Shahana particularly said, “I work six days a week from 8:30 am in

the morning to 8:00 pm at night, and at most times work overtime so that I can provide

for my whole family but the money I receive doesn’t complete our monthly needs. I have

been working here for the past five years, and haven’t gotten any promotions or any other

benefits. I work here just for my family, so that our life is some what livable and I have

no other options for jobs.” Towards the end of the conversation she mentioned about how

the men are paid more than the women, as the men are fearless and cause many troubles

if their demand isn’t fulfilled and the owners don’t want that, and also they know that

women are bound to work here instead of any other place.

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“1500 women, including some with disabilities, were trained as skilled garments

workers. Trained employees are paid starting wages three times higher than those of

unskilled novices”. (Promotion of Labour Standards in Bangladesh's Garments Sector)

The type of training both men and women get are generally sewing, cutting, packaging,

operating and final shipment works. Every year in the month of February, BGMEA trains

more than 4,000 workers from over 400 factories from Ashulia, Banani, Rampura,

Mirpur & Gulshan and giving them training on basic and intensive knowledge and anility

to make a garment. (BGMEA Trains over 3,000 Garment Workers in Fire Safety) The

trainging also “includes topics like reasons of fire in RMG factories, fire-fighting tactics,

fire dousing system and efficient use of various fire fighting equipment, safe evacuation,

fire drills and fire safety plans.” (BGMEA Trains over 3,000 Garment Workers in Fire

Safety) “Trainees developed greater ambition, improved self-esteem and higher social

status as well as bigger say in decision-making at home, in the community and in the

workplace.” (Jahan, Momtaz)

The country's garments industry has radically changed the lives of millions of

Bangladeshis. “Garment factories employ some 4 million people, the majority of them

poor women, and provide indirect support to millions more”. (Roddick, Anita)

Nazma Akhter, president of Combined Garment Workers Federation, said that the

owners must treat workers with respect, as they are also human beings, not machines.

Workers have families and a social life too. This things might sound unimportant but in

the long run the industries are affected as the workers are the main pillars they stand on.

Initiatives taken to improve the standard of living of the workers, both during work and

after. According to Mr. M.A. Jabbar (Business executive from Dulal Brother Limited

13

(DBL group),), the workers safety and welfare comes before any other factor in his

factory. He states, “If the men and women who work in this factory for hours after hours

and are not happy with the outcome they get for their hard work and labor, that would

directly reflect on the progress of my company. If the workers are happy and stable with

their working environment, salary and the extra benefits they get from their work, it’s a

direct reflection on the quantity and quality of the work they produce”. In this discussion,

he adds, “ We provide health care facilities for the workers as well, with doctor on duty

from morning till the evening. We have a special shop for the workers, where they can

buy groceries and basic home needs, for half the price they would buy from the local

stores.”

Chart 3: Bangladesh GDP Growth Rate

Source: Trading Economics

Conclusion:

Due to massive employment (this is the principle reason that the garments sector

has improved the standard of living) of skilled and unskilled workers, the standard of

living of people has increased, as more family members become income sources for the

14

family. Self-dependent youths now can look for a better future, especially women who

are normally considered to be the weaker gender, can now be independent and do not

have to be helpless without male support. By analysis of the history and background of

Garments Industry with other main industries of Bangladesh will provide a reflection of

the effect the Garments Industry has. Moreover factors like education, healthcare,

financial situation of the workers confirms to the improvement of living standard. The

role of the government, foreign factors and international market for garments also

affected the Garments Industry. The Bangladesh’s Garments industry is the most

beneficial sector for both the economy and for improving the living standards of the

people.

15

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OCCUPATIONAL SAFETY FOR FEMALE WORKFORCE OF GARMENT

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2013.

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2013.

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Appendix

Samina Islam

A 26 year old woman named Samina , from one of the top, five star, industry in

Bangladesh. According to her the working environment, wages and promotions are same

as the male workers. She also said that throughout the year she gets monthly bonuses and

special leaves; for example (full paid) maternity leave, holiday leave, Eid bonus and

overtime. So, therefore women do get more importance and opportunities to provide for

their families, and their wages are equal to what a male worker would possibly get. Both

her and her husband work in the same garments, and they can provide their family in a

well manner. She says, “I love coming to work and working with my friends and talking

to them. During weekends, I do not like staying home. Going to work is one of my

favorite things to do.” She mentions about the administrators and executives being great

and listening to them at all times. She says, “ She will keep working in this garments till

her last breathe”.

Shahana

Shahana is a single mother, only income source for her family. She mentions, “I work six

days a week from 8:30 am in the morning to 8:00 pm at night, and at most times work

overtime so that I can provide for my whole family but the money I receive doesn’t

complete our monthly needs. I have been working here for the past five years, and

haven’t gotten any promotions or any other benefits. I work here just for my family, so

that our life is some what livable and I have no other options for jobs.” Towards the end

of the conversation she mentioned about how the men are paid more than the women, as

the men are fearless and cause many troubles if their demand isn’t fulfilled and the

19

owners don’t want that, and also they know that women are bound to work here instead

of any other place. Knowing that the BGMEA and the government has strict laws for the

discrimination of women and men for salary, some small industries do not abide by these

rules.

Rokibul

Rokibul is a 26 year old, who works in the packaging section in Nargis Garments, near

Gulshan 1. He finished primary school and half of secondary school. He is a father to two

children and his wife also work in Nargis Garments as it is located near where they live,

so that they can be close to their kids and his mother. Rokibul started working in the

garments industry from the age of 20. He used to work in a garments industry near

Naranganj for 3 years and after he got married, him and his family moved to Dhaka for

better opportunities, and since the age of 24 he has been working for Nargis Garments. In

the full length of the conversation with Rokibul, it can be concluded that he was not

happy with the working environment and the salary he gets paid. He mentions that he

does not feel safe working in this crucial environment, as it is very hazardous. He is

bound to work there because there are no other alternates and he wants a better life for his

children. He mentions about his hopes and dreams behind his kids for doing something

big, and being educated.

M.A. Jabbar

Mr. M.A. Jabbar is a business executive from Dulal Brother Limited (DBL group), which

is one of the well-known five star industries in Bangladesh and the platinum exporter for

H&M and Puma. According to Mr. M.A. Jabbar, the workers safety and welfare comes

before any other factor in his factory. He states, “If the men and women who work in this

20

factory for hours after hours and are not happy with the outcome they get for their hard

work and labor, that would directly reflect on the progress of my company. If the workers

are happy and stable with their working environment, salary and the extra benefits they

get from their work, it’s a direct reflection on the quantity and quality of the work they

produce”. In this discussion, he adds, “ We provide health care facilities for the workers

as well, with doctor on duty from morning till the evening. We have a special shop for

the workers, where they can buy groceries and basic home needs, for half the price they

would buy from the local stores.” I asked him questions about the salary of his workers,

and he mentioned that his company does not discriminate and the salary for both men and

women are the same, but it depends on what kind of work they do, details are shown on

the graph below. He also mentions that DBL pays their workers more than what the

government requires them to pay the workers.

21