The history of Bangladesh’s economic growth has been tied with golden fibres: first jute, until the 1980s, then textiles, which, in the form of RMG (ready-made garments) income, brought in the gold since then. The former propped up Pakistan for the first 24 years of its existence, but like all primary products, was fated to have a short life. The latter combined with another national resource (relative low-wage), restructured the economic backbone of the country: both have enough comparative advantage to see us through at least to our 50th independence anniversary. By 2013, up to 4.0 million people worked in the RMG industry, which fetches over 80 per cent of our export earnings, or the equivalent of almost $25 billion annually, with the realistic goal of increasing that to $50 billion by 2021, that is, for two full generations by Bangladeshi standards. Interestingly, though RMG exports reached 10 per cent of total exports only in 1984, they then climbed so rapidly that, by 1991, they brought in half of our export income, and between 70-80 per cent every year after 1997. Capitalising on the 1974 Multi-Fibre Agreement’s (MFA’s) quota-system, South Korea’s Daewoo set the ball rolling through an agreement with Desh Garments in 1977 to produce apparel (only to find out that 115 of the 130 senior officers it took to Korea for training purposes began their own RMG plants upon return). Thus was born our second golden fibre: textiles. Profiting further from the 1982 New Industrial Policy, which denationalised 33 jute and 27 textile mills, among other factories, the industry quickly swelled beyond 300 factories. The 1,000-mark, according to World Bank figures, was reached in 1991, the 2,000 in 1994, then 3,000 in 1995, and 4,000 in 2001, leaving us just short of 5,000 presently. RMG exports became the largest in the country in the early 1990s, and by now involve almost three-quarters of the workforce in the manufacturing sector, accounting for more than half of all manufacturing establishments. That more than 80 per cent of the workforce was female in the initial years, speaks of a women emancipation that has gone on silently amid all the hoopla about Muslim women bondage and Islamic fundamentalist constraints: that more than half of the workforce still remain female paradoxically exposes a staying-power not common these days anywhere, but also exploitation, especially in terms of wages, that is also not universal. Fear that the termination of MFA benefits in 2004 would throw our economy back on the rocks proved completely unfounded: the peak RMG years would follow 2005, when China, the only world producer and exporter with a larger tally than ours, began to lose its own competitiveness (amid an increasing desire to parcel out the textile industry to divert resources to other economic sectors). Between 2001 and 2011, Chinese RMG wages expanded from $144.86/worker to $329.9/worker, in contrast to a contraction in Bangladesh, from $93.67/worker to $91.45/worker. In 2004, Bangladesh’s RMG exports hit $5.0 billion for the first time. Approaching $25 billion today, one can see how the income quintupled inside of a decade. Before that decade, interestingly, export-earnings struggled to even reach $5.0 billion for close to twenty-years, even as it was splashing waves globally. When the MFA quota system expired in 2004, Bangladesh was the eighth largest apparel exporter, after China, Italy, Germany, Turkey, India, France, and Mexico. By 2011, it climbed into the third spot, behind China and Italy; then to the second-spot, while biding time to hit the top at some future point. Though the European Union buys the largest share of our RMG exports, of 60 per cent, the single largest country-importer is the United States, taking about a quarter, with Germany 18 per cent, Britain 11 per cent, France 7.0 per cent, and Spain 6.0 per cent. By far the dominant component of exports is cotton cloth, followed by cotton yarn, bed-wear, towels, and knitwear. RMG exports do not enter that top-five list. Yet, in terms of value, RMG exports dominate, accounting for two-thirds of all income, followed by knitwear, bed-wear, towels, cotton-yarn, and cotton, in that order. According to Clean Clothes Campaign, about 120 trade unions represent these workers, the largest being the National Garment Workers Federation (NGWF), and uniquely depicting women-dominated unionisation. That said, discrimination is widespread, working-hours excessively long, and child-labour not uncommon. Most of all, wages have been pathetically low: an average of Tk 3,300 ($68) against the Tk 25,687 ($332) minimum living wage. Bangladesh carries the mantle of having the lowest RMG wages throughout this century thus far: its 2001 average wage of $93.67 was almost half of Vietnam’s and two-thirds of India’s and China’s; and though average wages climbed in 2011 to $324.9 in China, $254.78 in Vietnam, and $169.67 n India, Bangladesh’s actually fell to $91.45. Whereas a denim shirt made in Bangladesh can be produced for less than a quarter (22 cents), in the United States the comparable figure is $7.47. The country also has one of the lowest labour productivity: China, India, and Pakistan do much better. Of course, our RMG history has not flowed as smoothly as that overview might suggest: factory-fires, increasingly of late, have exposed the atrocious factory conditions, forcing an equally dependent industrialised world which relies on cheap RMG imports to monitor every reform as a sine qua non to maintaining the status quo; and the Rana Plaza Tower collapse also raised worker conditions to the forefront, pushing us into reluctant labour laws and organisations. Compromises were made between importers and Bangladesh trade unions through the Accord on Fire and Building Safety, and the 5-year Alliance for Bangladesh Worker Safety reached drawn by 26 importing retailers, both supervised by West European and U.S. industrial, legislative, or governmental officials; and though these helped the country avert a monumental crisis. Nevertheless, RMG domination continues in the economy: various McKinsey reports since 2011, and particularly after the 2013 textile tragedies, elevated Bangladesh’s credentials, reduced Vietnam’s ostensible threat, and inspired the BGMEA $50 billion 2021 export target. On the one hand, we averted catastrophe at one crossroads, but on the other, we did not do enough to begin diversifying our production. While that is a task involving the growth of other industries and initiatives, and not circumscribing the RMG sector, this over-dependence on RMG income somehow thwarts the serious consideration of alternatives. Previous articles in the series made the case for industries that might be future contenders or constraints. The next one, with which the industry-specific analyses ends, explores a potentially new industry capable of chipping in to our industrial graduation.
