Germana Carillo The latest political unrest could lead to a 10-20% drop in exports this year. This is no small figure when exports of fast fashion clothing represent 80% of Bangladesh's export earnings, brought to its knees by the same sector that - until now - had given hope
Bangladesh has, for decades, been the pulsating heart of the fast fashion industry of the world and the second-largest apparel producer after China. Apparel manufactured in the factories of Bangladesh fills the shelves in Europe and North America, from H&M to Gap to Zara. In a short span of three decades, this vast goldmine (?) transformed the country from one of the poorest in the world to a lower-middle-income nation.
Yet with these gains, the $55 billion-a-year garment industry may have no future, particularly after weeks of protests which, in August, saw the overthrow of Prime Minister Sheikh Hasina’s administration. Bangladeshi workers have clashed with police over increasing the minimum wage for months. Hundreds were killed, and at least four factories set on fire.
It seems for nothing: several major brands have already turned their backs, looking elsewhere for next season’s production, said three suppliers speaking to the BBC. They supply brands including Disney and the US supermarket chain Walmart, among other global clothing companies. And what is to be expected? As for now, the unrest goes on: about 60 factories are due to stay shut outside the capital Dhaka in the days to come.
Recent events will affect the confidence level of the brands,” says Mohiuddin Rubel, director of the Bangladesh Garment Manufacturers and Exporters Association.
The recent political chaos may cause exports to plunge 10-20% this year. That is no insignificant amount considering fast fashion exports comprise 80% of Bangladesh’s total export earnings.
Economic woes even before the unrest
The garment industry-and the economy-of Bangladesh was not exactly in the best shape even before the latest unrest. The child labor scandals, deadly accidents, and COVID-19 shutdowns had taken their heavy toll. At the same time, soaring prices that jacked up the cost of production found an offsetting slowdown in demand which precludes the sale of garments at higher prices. This has been particularly debilitating for Bangladesh, reliant as it is on exports. Along with a shrinkage in export profits, foreign exchange reserves too have shrunk, according to the BBC.
Excessive expenses on major infrastructure projects have siphoned away funds from already-weak state coffers, while rampant cronyism has further weakened banks.
It wasn’t benign neglect; it was a planned robbery of the financial system,” said Ahsan Mansur, the new governor of Bangladesh’s central bank in an interview with the BBC. That is now the top priority, but it will be a multi-year job and the country will require further financial assistance, including another bailout from the IMF.
Until recently, Bangladesh was a haven for fast-fashion giants because of the easy availability of cheap labor. Now, having bled the country dry, they are ready to move on. While many of the brands continue to give lip service for wage hikes, Bangladeshi producers remain adamant: for them to meet workers’ demands, brands must be willing to pay higher prices. And that, it seems, will not happen.
It would, in fact, run against the “commandments” of fast fashion, which is a vicious circle: the factories produce at inhumane rates to feed such a ‘throwaway’ fashion culture as fast and as cheaply as possible, compromising the wages of workers about whom, frankly, nobody really cares.
