Bangladesh is second only to China for exports of ready-made-garments (RMG). With more details emerging this week of the reasons for the collapse of the Rana Plaza factory building, the spotlight is back on the source of the cheap clothing Western countries enjoy.
Article originally published in May 2013
The textile industry, especially RMG, has enabled >5% GDP growth for the last decade and is estimated at $19bn. The pro-trade government sees business as the mechanism to lift people out of poverty in one of the poorest countries in the world which also has the highest population density.
Headline figures point to some success - its Human Development Index (HDI) has increased, with universal primary education a notable achievement which has helped push its HDI ranking (147 out of 187) 11 places above its wealth ranking. Meanwhile, Nigeria, a wealthier country by comparison is 12 places below its Gross National Income rank. (You can find the UN's HDI report for Bangladesh here.)
Sustainable trade is clearly a better solution than dependency on aid. But the human cost is proven time and time again to be intolerable. It would be easy simply to blame local entrepreneurs such as the owner of Rana Plaza for using poor quality materials, adding two extra stories to the approved plans and other violations of safety standards. It would also be easy to blame the inspection process which lacks the resources and the teeth to be at all effective against shortcuts and opportunism.
Both of these factors are undeniably direct contributors to the appalling state of most industrial buildings in Bangladesh. However, we must also ask ourselves why this pressure exists to cut costs and corners and to squeeze as much as possible out of a servile workforce who so desperately need to keep the tiny income they receive for their labours.
The insatiable hunger for cheap clothing, the pressures on margins from commodity prices and the competition from other developing countries in turn have a direct effect on the governance environment and so business ethics in Bangladesh.
It’s time we as a global society woke up and became more aware of the reality of how the products we consume are made and where raw materials come from. Or rather, we need stop pressing the snooze button after a horrific disaster like Rana Plaza wakes us up and get out of bed and act. In a globalised world in which as consumers we benefit, we must also become more conscious of the consequences of our purchasing decisions.
As businesses and organisations, we must recognise the rising awareness that is already taking place, proven by the success of new global brands such as Icebreaker with its innovative Baacode system of tracing products back to the farm which produced the wool for its products.
Companies like this, with their high ethical stance and innate good governance will increasingly steal market share from traditional conglomerates and brands. If we wake up and smell the coffee, we can all benefit from a more equitable distribution of the world’s wealth.
By Arthur Kendall