By Ryan Aherin
The 25 April 2013 collapse of the Rana Plaza, which resulted in the deaths of at least 300 workers, has brought further scrutiny over poor working conditions in Bangladesh. International and domestic pressure is mounting on the Bangladeshi government to take action towards improving labour standards in the country. However, the garment industry has significant political influence, and factory owners face great pressure from their clients to maintain competitive pricing amidst tense regional competition. These factors, combined with general political instability, will make it difficult for significant improvements in labour standards to be achieved in the short term.
Political influence of garment industry inhibits change
Bangladesh’s economy relies heavily on the export of ready made garments (RMG). In 2012, RMG exports accounted for 78.6% of the country’s total of US$24.2bn (according to the country’s Export Promotion Bureau). In 2012, Bangladesh’s total value of exports to the US and EU combined was US$15.4bn, second only to China. However, regional competition in the industry is fierce – Vietnam’s own RMG sector is growing rapidly, and is threatening Bangladesh’s position, with total export value of US$12.6bn in garment exports to the US and EU in 2012. Furthermore, Vietnam’s participation in the Trans Pacific Partnership and a relatively more stable (albeit authoritarian) government will only increase its competitiveness in years to come. This will place increasing pressure on Bangladesh’s manufacturers to keep costs down. (more…)