Bangladesh and the Free Trade Zones

Bangladesh is one of the poorest countries in the Asia region, with a per capita income of around $280 per annum. 80-85% of the 129.24 million population lives in rural areas, and almost all the industrial and infrastructural development is confined to Dhaka or Chittagong, the country’s second city, home to a major port in the east. In Bangladesh 1,6 million jobs in 3,300 factories are directly dependent on export-oriented textile and garments industries (accounting for 75% of total export) producing goods for mostly European and North American markets. The national minimum wage is around 20 USD a month, but unskilled workers in the garment sector receive a mere 800 taka a month, about 14 USD. In October, 2006 after lengthy negotiations and much controversy a new minimum wage structure was declared. According to the new wage structure the minimum wage for a helper is Tk 1,662.00 (Euro 19.00). Many workers are forced to work 14 to 16 hours a day, and in some cases throughout the night. In many cases workers are not paid on time and may have to wait up to two months to receive their pay cheques. The management of garment factories rarely allows unions to be formed, which is their legal right according to the ILO. Around 90% of garment workers are migrants from rural areas, and approximately 85-90% are young women. Extreme poverty, institutionalised corruption, low wages and a repressive government all militate against an environment conducive to strong worker rights.

Bangladesh’s garment industry, after a huge expansion over the last 20 years, experienced a large cutback, including great job losses, following September 11, 2001. Now the most recent development in the global (de)regulation of the garment supplier industry is even putting a higher pressure on Bangladeshi garment workers. The phase-out of the global Agreement of Textile and Clothing, including the Multi Fibre Agreement that started in January 2005 didn’t provoke the massive layoffs that were predicted, but did increase the competition and thus the pressure on workers. Bangladesh is now in direct competition with, among others, China, which has a lot of ‘advances’ over Bangladesh. The fact for instance that Bangladeshi producers have not only retained their market share but increased exports by 20 percent in 2005 was only possible by ensuring that labour costs remained well below those of their competitors in China.