Bangladesh RMG Industry (BRMGI) is completely export-oriented
one and comprises very deep multidimensional impacts on country’s moving
economy. Hence, this strategic sector’s foreign currency earnings accounts for
81.70 per cent of total export earnings of Bangladesh during the fiscal year
(FY) 2015 which in monetary term amounted US$ 25.49 billion. Moreover at the
same time, Knitwear Sector earnings from export amounted US$ 13.26 billion
which holds 49.13 per cent export earning share of total RMG earnings
indicating this sector’s competitiveness and classy presence in the world
market of homogenous kind.
This write-up
intends to reveal how the NYU’s research titled “Beyond the Tip of the Iceberg:
Bangladesh’s Forgotten Apparel Workers” went wrong on the pre-assumed biased
hypothesis, which are as follows,
1.
Bangladesh itself has a very big domestic market for clothing which is
dominantly met by domestic ‘Clothes Tailoring Industry (CTI)’ and ‘Bangladeshi
Local Retail Brands (BLRB)’:
NYU’s study completely subsided this fact and failed to
understand that Bangladesh itself is market for around 160 million people
and naturally occupies a very high aggregated demand for ready-made clothing.
Bangladesh imports a little from abroad still now, despite it has recently
reached at the status of ‘lower-middle income class.’
The relevant data is given below (See Table 1),
Table 1: Import expenditure of Bangladesh on HS-Code 61 and 62; Data Source:
ITC Trade map, 2016.
|
Product
code
|
Product
label
|
Value
in 2012
(‘000
US$)
|
Value
in 2013
(‘000
US$)
|
Value
in 2014
(‘000
US$)
|
|
'61
|
Articles
of apparel, accessories, knit or crochet
|
92866
|
185636
|
119911
|
|
'62
|
Articles of apparel,
accessories, not knit or crochet
|
116684
|
150987
|
202772
|
According to UNICEF, Bangladesh has almost 100 million people
who are above 18 years of age and 52.75 per cent
of this population is male indicating that total male citizen of Bangladesh is
approximately 57.25 million (note: calculated by the author, E. H.
Latifee, 2016 based on the data collected), now with this reference if we find
out the per-head import-expenditure on HS-Code 61 and 62 respectively,
we find the situation as revealed in the Table 2 below,
Table 2: Per-head (Male) yearly import expenditure on Knit and Woven RMG made for
males. Data Calculation: E. H. Latifee, 2016 by using Table 1 and
population info expressed above.
|
Product
code
|
Product
label
|
Per-head
Value in 2012
|
Per-head
Value in 2013
|
Per-head Value in
2014
|
|
'61
|
Articles
of apparel, accessories, knit or crochet
|
1.760492891
|
3.519165877
|
2.273194313
|
|
'62
|
Articles of apparel, accessories,
not knit or crochet
|
2.212018957
|
2.862312796
|
3.844018957
|
From the Table 2 it is very clear that at the Calendar
Year 2014, for Bangladeshi male, import expenditure of HS Code 61 and 62 were
only US$ 2.27 and US$ 3.84, whether the HS Code 61’s manufacturing price is
around US$ 3.19 and HS Code 62’s is US$ 5 per unit of production on average- it
rationalizes that Bangladesh still does not import Knit or Woven clothes
from abroad at large scale indicating that ‘Clothes Tailoring Industry (CTI)’
of Bangladesh and ‘Bangladeshi Local Retail Brands (BLRB)’ fill up the huge
domestic demand for RMG.
2.
The photos that NYU Stern’s study used was from Keraniganj, where only
domestic demand filling ‘Clothes Tailoring Industry (CTI)’ related businesses
are present but no export-oriented factory is there and by showing those
pictures the study tried to showcase fallaciously that export-oriented
Bangladesh RMG Industry (BRMGI) is also like that:
One of the pictures (See Photo 1) that NYU Sterns
study used taken from Keraniganj which is concentrated business area for
Clothing Tailoring Industry (CTI) meeting only domestic demand is completely
different from and have no association with export oriented Bangladesh RMG
Industry.
Photo 1: Comparative scenario of local CTI and BRMGI; Source: Left one-
from BKMEA recent photo collecting activities and the right one- from NYU’s
paper.
BKMEA monitors environmental, productivity and quality, fire
and electrical, structural and labour health-wage, workplace elated matters of
its’ member factories time to time, still it has not found any factory having
the scenario that NYU’s photo depicted, rather NYU’s research took it from
Keraniganj which place is used by CTI business only to meet domestic demand for
ready-made clothing but not associated with export at any level.
3.
‘Clothes Tailoring Industry (CTI)’ of Bangladesh and ‘Bangladeshi Local
Retail Brands (BLRB)’ get knowledge about new fashion trend either collecting
photos from internet or by observing consumers’ preferences through their set
up shops:
Perhaps, NYU Stern research team got confused by seeing
look-alike RMG products at those CTI factories situated in Keraniganj which are
actually inferior in quality and there are defects on those products, but later
they amalgamated those products falsely with export-quality products. But the
reality is, CTI does not have the technological advancements to meet the
buyers’ demand for RMG-product perfectly with the quality a world-class brand
needs. Rather, BLRB sometimes fetch quality fabrics from abroad and provides
design and fabric to CTI for stitching it, and local customers cannot catch the
difference in stitching with normal eye-view. Sometimes it happens, CTI readies
shirts or T-shirts which look-alike export-oriented RMGs but they source fabric
from very cheap sources and those fabric fail to qualify international standard
even, but as if those are cheap, that is why local Bangladeshi low-medium
earning people buy those.
Moreover, if BRMGI coined export oriented factory’s
production gets rejected from buyers then they sell it to the local wholesalers
as there is a provision in National Industrial Policy 2010 for 100 per
cent export oriented industry stating that they can sell 20 per cent of their
manufactured products by paying due taxes and duties- this also work as a way
for CTI and BLRB to copy export-quality RMG designs and by modifying those a
bit, later they produces RMGs for meeting local demands only.
4.
In applicable cases, subcontracting is prefixed by the buyers expressed
in the LC opened and no manufacturer and exporter can violate it as there are
auditing teams to monitor at different steps:
Subcontracting is a usual process in
world businesses and can be done by any firm with other firm being under laws
and regulations,
and by satisfying contracts made with buyers. However, firstly, BRMGI
businesses usually do not subcontract as if they have capacity to meet buyers’
quantity demanded, but depending on the orders they scale down their
productivity sometimes and excel up productivity further when orders come
frequently. And secondly, if even subcontracting is needed, then RMG
manufacturers and exporters are given with set of conditions from the end of
buyers expressing with which factories they can go for subcontracting and what
standards the subcontracted factories should be meeting for must. These
two-fold premises reject the core hypothesis that NYU Stern’s study drew that
BRMGI subcontracts with CTI who are not directly connected to export.
Hence, the research publication titled “Beyond the Tip of the
Iceberg: Bangladesh’s Forgotten Apparel Workers”, published by NYU Stern Center
for Business and Human Rights may have good intentions to protect the labour
rights but had conducted the research activities under above mentioned title by
pre-assuming that labourers of this phenomenal industry is in very pity-risky
condition which is completely invalid that is illustrated here briefly, however
the biased stance of that study led to a fallacious concluding remarks full of
false linking and fatal contradictions with the reality existing here within. Despite
these, Bangladesh RMG Industry eyes on achieving US$ 50 billion target by 2021
which is one of the visionary heartfelt attainable goals of present dynamic
government to reach at.
The writer, Enamul Hafiz Latifee, Senior
Assistant Secretary, Research and Development (R&D) Cell, Bangladesh
Knitwear Manufacturers and Exporters Association (BKMEA).
