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Bangladesh’s Factory Improvement Needs A Plan

After its recent factory disasters — the Rana Plaza collapse and the Tarzeen factory fire — Bangladesh is making progress in improving building safety problems and dangerous working conditions for its four million laborers.  Bangladesh is the world’s second largest apparel exporter.

But an additional strategy is required if Bangladesh is to overcome these challenges and achieve lasting results, said an editorial in the April-June newsletter of the International Chamber of Commerce-Bangladesh (ICCB).

The editorial also urged the cooperation of factory owners, government regulators and buyers to collaboratively design and implement a more organized plan.

Some efforts in that direction are already underway, with both private sector initiatives and  joint government-private sector programs soon to be initiated.  Gap and Walmart are among the leaders of a consortium of private companies supervising the inspection of garment factories and financing the necessary structural improvements.

Among the objectives discussed in the ICCB newsletter was the establishment of a system of factory classification, the implementing of health and  safety standards, compliance monitoring, the assignment of various responsibilities to trade associations and the drawing of new RMG (ready made garment) economic zones, with a commitment to finance RMG reforms.

Also among the proposals suggested were the following: an increase in the minimum wage tied to efficiency and productivity, the urging of trade unions to provide better representation for their workers, the establishment of a workers’ welfare fund, and an international public relations program to enhance the Bangladesh sovereign brand.

US and foreign retailers favor production in Bangladesh because of its abundant labor force, manufacturing capacity, its history of low prices, and quick turnaround.

About 80 percent of Bangladeshi exports come from the apparel sector, accounting for 16 percent of the nation’s GDP, about $21.5 billion in US dollars.  By 2020, Bangladesh’s apparel exports are expected to hit $36 billion, according to a forecast by McKinsey & Company, an American global management consulting firm.