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Editorial: Fix Bangladesh’s Politics First, Then Factories

After the tragic collapse of the Rana Plaza factory in Bangladesh last April, the worst accident in the history of the garment industry, Western retailers discovered deep reserves of humanitarian commitment. Anguished calls for action were frantically issued. Shocking revelations of squalor, corruption and labor exploitation surfaced.

Now, two competing consortia of retailers who outsource apparel production to factories in Bangladesh have materialized to supervise desperately needed reforms and finance expensive factory improvements. The EU led Accord on Fire and Building Safety in Bangladesh (AFBSB) has plans to inspect the approximately 1,000 factories that directly supply them with garments while the US brokered Alliance for Bangladesh Worker Safety intends to cover another 500.

Almost immediately, the European band of apparel missionaries heaped scorn upon its American brokered counterpart, singling out Walmart in particular for not doing enough, and for doing it too slowly. Even some Americans, loathe to be bested in loathing themselves, chimed in. New York City Comptroller John C. Liu plaintively opined, “It’s disappointing that Walmart, Gap and other US retailers have chosen to go their own way with a plan that appears to lack meaningful transparency and accountability.”

But there are no innocents in this macabre drama of feigned moral indignation. First of all, while Europe may be facilitating the inspection of 1,000 factories, Bangladesh has nearly five times as many. The AFBSB justifies its limited reach, while denouncing the US for theirs, by claiming they cover all the factories they contract business with, happily discharging their responsibility. But everyone knows that much of the garment production done in Bangladesh is subcontracted to smaller, virtually unregulated, and even more hazardous factories. They happen to be even cheaper, too.

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Here’s a brief list of what everyone else knows as well and has known long before Rana Plaza was reduced to rubble. The factories in Bangladesh are often perilous time bombs, tirelessly churning out t-shirts before inevitable disaster. When the Rana Plaza collapsed, massive generators were illegally placed on shoddily constructed upper floors so that when a power outage occurred work could continue.

Laborers toil in despairing conditions, risking their lives for paltry compensation. How has Bangladesh, a country without any real infrastructure to speak of, or a highly skilled labor force, or technological sophistication, or political stability managed to magnetize so much foreign investment? The answer is limitless reserves of cheap labor and a cost-effective indifference to its safety.

And even a catastrophe of Rana Plaza’s enormity hasn’t been able to stymie business in Bangladesh, brisk as ever. Despite the slew of revelations regarding what essentially counts as slave labor, its garment industry continues to outperform all of its rivals with the exception of China. In fact, a study recently issued by the McKinsey Group’s German office discovered that Bangladesh is here to stay as a major sourcing destination, as long as it continues to provide massive productive capacity at meager costs.

And while the US has suspended duty free access for Bangladesh until it improves factory safety,  this has little effect on the garment industry since it only applies to goods like golf equipment, kitchen appliances, and ceramics. Bangladesh’s garment industry has never qualified for duty free access to the US market.

There are no easy answers or quick fixes to Bangladesh’s deal with the devil to trade the safety of its own for a seat at the global market’s table. The impoverished nation’s success hinges upon a ferocious program of budget driven short-cuts. Deprive Bangladesh of its only marketable resource and it will only descend further into destitution. It is easy to forget that once upon a time China, Viet Nam and Thailand, formerly the world’s principal suppliers of discounted labor, now attract apparel companies because of their high-skilled workers, developed infrastructure and ability to produce sophisticated products.

An overly targeted approach to improving Bangladesh’s labor and safety issues blithely overlooks its deep political dysfunction. Recently, the US State Department decided to shutter its embassy in Bangladesh, along with twenty-two other consulates worldwide, in response to evidence of a gathering terrorist threat there. While Bangladesh has been more successful resisting the importation of Islamic fundamentalism than Yemen or Iraq, it still suffers from high rates of arson, abduction and gang violence.

And its government is notoriously amenable to bribery and corruption. According to the Global Competitiveness Report (GCR), a study completed by the Center for Policy Dialogue (CPD), Bangladesh suffers from increased governmental instability, inefficient governmental bureaucracy and a general lack of access for business to financing.

The most troubling discovery, though, was that Bangladesh is still addled with rampant corruption. A survey of seventy-one companies unearthed complaints of bribery, tax evasion related to import and export business and the illegal awarding of contracts and licenses as a result of bribery and fraud.

Problematically, both groups of Western retailers  have focused on financing factory improvements and the facilitation of factory inspections, rather than the elimination of corruption that infects the governmental system necessary for overseeing both.

Khondaker Golam Moazzem, research director for CPD, said, “These indicate that Bangladesh is still struggling with structural and governance weakness. The existence of these weaknesses is pulling down the economy from attaining a higher level of competitiveness.” The fear of pervasive graft has made banks cautious about lending, dampening the growth of business. “Banks are now cautious in trade financing after the scams of Hall-Mark and Bismillah groups,” said Moazzem.

Bangladesh is also a country that still struggles with historical wounds, especially the bloody war it fought with Pakistan for its independence in 1971. Bangladeshi Prime Minister Sheikh Hasina Wazed established an International War Crimes Tribunal to try those who attempted to join the Pakistani army in a ferocious campaign of mass rape and indiscriminate murder. The country remains fractured from the conflict and still mourns the three million who died as a result of it.

Bangladesh also still wrestles with its small but aggressively active Islamic political parties, in particular Jamaat-e-Islami, known for its enthusiasm for replacing secular law with sharia and praising worldwide terrorism against Western nations. Bangladesh’s parliament vacillates between attempting to criminalize the party as a whole or moderate it through increased political inclusion in democratic process.

Bangladesh’s woes are far too deep and complex to be solved by simply raising the minimum wage or rebuilding some dilapidated garment factories. Europe’s moral commissars openly express high dudgeon at revelations regarding working conditions and factory safety in Bangladesh but the truth is these were not revelations at at all, but well-known truisms. And just a few weeks ago, yet another factory in Bangladesh was engulfed by flames but this time the Western press hardly noticed, indicating that the once hot interest in the issue has already begun to cool.

Both the EU and the US will push Bangladesh towards reform just hard enough to publicly register their ethical bona fides, but not so hard they squander access to the world’s best source of low-rent human capital. There are deep, systemic and political changes that are necessary but no one is calling for those. It’s not easy to pass up on such a sweet deal, or, apparently, on opportunities for high-handed hypocrisy.