The issue of wages in the RMG sector of Bangladesh

The RMG industry of Bangladesh is now at a crucial juncture. There has been an outbreak of various volatile incidents that threaten the industry. In the last few years there have been a number of protests staged by the workers in the sector, often leading to violence, vandalism and general public nuisances via road blocks. These protests were conducted for better wage, attendance bonus and for other facilities. Approximately 140 RMG facilities had to close last year due to these protests and unrest, accompanied by other problems such as a crisis of gas and power, increase of price of yarn, impoverished infrastructure and cheaper offers from international competition.

Despite the rising protests and demands (from the garment workers) for the establishment of a logical entitlement to labour rights, the existing owners are overlooking the need for these legal provisions. The apathy of the owners increased the wave of these resistances and the result of such protests and demonstrations resulted in US$ 70 Million loss to the sector as of May, 2006. Many of the stakeholders, including journalists, researchers and labour right activists has pointed out that such losses can be avoided if the government is prepared to create and implement an effective and comprehensive sets of labour laws that makes the industry incorporate labour rights. There are critics who have pointed out that existing system of business in the global system tends to benefit the entities in the developed countries and in the process creates obstacles in the way of implementation of such laws in the developing nations, which includes Bangladesh. These realities therefore have created the need for a fresh analysis of the situation and a subsequent solution.

After independence Bangladesh acquired some already established industrial enterprises in the sector of textile, jute, sugar and steel. Most of those businesses were created with state funding and / or government subsidies, and were owned by big business based in Pakistan. These businesses were later abandoned by the Pakistani owners after Bangladesh emerged as the newly independent nation, and were nationalised after. These national enterprises formed the bases of the industrial entity of the country.

These organisations had really strong trade unions which were influenced and run by various left parties. Workers of these big industrial entities located in Dhaka, Chittagong and Khulna were organised and were active politically sine the 60s. These workers were instrumental in the national uprising against the regime of the Pakistan military led by General Ayub Khan. They were also an integral part of the revolution in 1969 and the liberation war of 1971. However, after independence, these trade unions were captured and owned by both the civil and the military government of Bangladesh. The ruling parties even resorted to violence and assassination to get hold of the influence these trade unions had, and install people of their choice in the union. This abuse reached its peak in the 80s under the military dictatorship of H. M. Ershad. The labour leaders were thus infused with the ruling class. Afterwards began the common practice of organised corruption in were both the labour leaders and the management were participants. This practice however created mistrust among the general labour force about their leaders in the unions, and the power that the trade unions had (in terms of establishing worker’s need) started to erode. Various privatisation projects run by the World Bank bribed top leaders in the union (which included trips to foreign countries) and thus tried to ensure a success in privatising. Eventually many of these trade unions became mere tools for the ruling government and therefore became more and more alienated from their core base of workers. 

These practices rife with corruption therefore contributed to the loss of trust and credibility and weakened the trade unions. In the 80s, the industrial sector of Bangladesh were being victimised by various “structural adjustment programmes” and the influence of the rising neo-liberal policy that was promoted by the World Bank and the IMF (Muhammad 2006a). These programmes prioritised activities that included state-owned enterprises being privatised, various non profitable enterprises closed, various industrial units were downsized and workers retrenched. These reforms slowly eroded public enterprises and therefore led to de-industrialisation and a sharp increase in unemployment as a result. The largest victim of this process was Adamjee Jute Mills, which was world’s largest enterprise in the Jute sector. This enterprise shut down in 2002 as it became part of “Jute Sector Development” that ran with a loan o $250 Million from the World Bank. The institutional reforms and the neo-liberal policy that influenced the government also had a strong political and ideological impact. The policies and reforms were intended to expand privatisation, break apart old industrial establishment and de-stabilise the stronghold that workers had. This also had the agenda of creating a large pool of labour force that was scattered, not organised, were unable to assert its rights and therefore were forced to work for low wages.