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How Rana Plaza Pushed Bangladesh to Become a World Leader—And How You Helped

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Five years ago, today, the Rana Plaza catastrophe made Bangladesh notorious. We all know how our industry became a pariah as well.

Today, thanks to the way our industry reacted to the catastrophe, Bangladesh has become a beacon for how poor countries can pull themselves out of poverty, and, in the process, transform human rights and gender equality—all through clothing exports to the West. You will probably never again help achieve anything so extraordinary.

Things were bad before Rana Plaza

Bangladesh was born out of a savage civil war in 1971.

It had no natural resources, its neighbours were almost as poor, and it sat on the edge of an earthquake zone, battered by monsoons and tsunamis. President Nixon’s key foreign affairs advisor, Henry Kissinger, decided that it “is and always will be a basket case.”

It had the same GDP per head ($95) as Haiti—and, unlike Haiti, had no rich market on its doorstep.

Forty years on…

By 2013, Bangladesh had become—with almost no foreign investment—the world’s largest clothing exporter after China. Millions of jobs had been created in the Bangladesh clothing industry. Its GDP had grown nine-fold since 1971.

Bangladesh’s achievements weren’t only economic: in 2010, the country received a UN Millennium Development Goals Award for its remarkable decline in infant mortality and was beating other very poor countries in its battle against extreme poverty and hunger, educational improvement and advances in gender equality

But there were serious black spots:

  • Wages—At 3,000 taka ($38) a month, the minimum wage was almost the lowest on earth
  • Worker safety—at Clothesource, we were logging between 60 and 80 deaths a year in clothing factory accidents: the highest we could find recorded anywhere
  • Pervading violence—Political disputes were settled—or often not—in riots between the two parties who’d controlled the country almost since its birth, killing dozens.

That’s how disputes were handled in the clothing industry too. Both sides used thugs to intimidate both their opponents and their own supporters. But there’s no doubt which side governments—of either party—supported. By and large: employers and their trade organisations like the BGMEA and BKMEA.

  • The government systematically intimidated garment workers—Most notoriously: in 2012, the government’s intelligence agency had brutally murdered garment union organiser Aminul Islam

April 24, 2013

To everyone’s horror—but almost no-one’s surprise—at least 1,500 people were killed when the multi-story Rana Plaza clothing factory complex collapsed: the worst recorded peacetime industrial accident we can find anywhere, ever.

Many were surprised, though, how quickly European and American clothing importers reacted.

Political activists had been pushing a factory safety proposal for years. Within weeks of the collapse, co-operating with Western and Bangladeshi unions, importers finally adopted a modified version. Around 300 companies (including the unions’ bete noir, Walmart) quickly signed up to separate consortia in the U.S. and Europe.

Those consortia offered long-term commitment and financial support: they also imposed almost identical standards of safety protection on Bangladeshi factories —almost all still locally owned.

Though political activists criticized the details, cooperation between unions and importers was remarkable, with unions now able to appeal over factory owners’ heads to buyers, who did indeed fire unsatisfactory factories.

Activists raised frequent, and usually well-founded, worries about building standards and the pace of factory upgrading. But industrial safety improved almost immediately. Like roads, no building is ever 100 percent safe; what really matters is having safety rules that are always enforced.

The consortia made it clear almost from the start that broken safety rules meant no more orders, though workers would be compensated. Locked fire doors, smoking near flammable material, workers not instantly evacuated if danger was suspected? Termination.

In the subsequent five years, at most a dozen accidental deaths in clothing factories.

2017

By the end of 2017, Bangladesh’s clothing exports to the EU were two-thirds China’s—and six times Turkey’s.

Four million people now worked in clothing factories, with almost as many again working in businesses depending on those factories. Bangladesh’s GDP per head was now $1,400, more than twice Haiti’s. And Haiti was getting nine times as much foreign aid per head.

The gains were almost entirely the result of its clothing industry. But progress on the other problems was patchy.

  • WagesBangladesh’s minimum wage was still just $64 a month.
  • Union harassment—In 2016, the government’s neurosis about “subversion” meant workers were threatened with sedition charges (carrying a sentence of life imprisonment) if they told visiting U.S. politicians the truth about working conditions in factories.

As the crackdown on union activities worsened, at least 1,500 workers were dismissed, and 38 union leaders and workers were arrested on unsubstantiated charges after a largely peaceful protest in December 2016.

The importers put their feet down. Threatening to boycott a BGMEA “summit” planned to publicize the country, they confronted the government and the BGMEA.

Who blinked first? The charges were dropped, the dismissed workers reinstated, and employers agreed to stop union harassment and forget about any further charges.

It didn’t all stop immediately, of course. But a watershed had been crossed.

  • State terrorism—In spite of intensive pressure from unions, industry associations, and the country’s trading partners, there had still been no progress in bringing the killers of Aminul Islam to justice.

The past month

On March 15, a UN committee announced that Bangladesh could graduate from its Least Developed Country (LDC) category. The category was invented, like Bangladesh itself, in 1971. It includes the 47 most desperately poor countries on earth. Only five have graduated, all either tiny or with natural resources like diamonds or oil.

When Bangladesh’s 163 million people do leave, a third of the world’s LDC population will no longer be categorised as desperately poor, arguably the fastest escape from deep poverty anywhere, ever including 18th/19th century Britain, and 20th century China.

On April 5, the U.S.-based Workers’ Solidarity Centre said “despite obstructions from factory owners, registered unions in Bangladesh have grown fivefold since 2013.” The Centre estimates that half the new unions are led by women.

On April 7, 12 union members were granted bail on charges including attempted murder after an alleged violent attack on a factory. A year and a half earlier, they’d have gone straight to jail for a peaceful protest march.

On April 8, the first indicted Aminul Islam murderer—known to the police as an Intelligence agent—was convicted and sentenced. More suspects remain, and it is possible no others may ever be convicted. By contrast in neighbouring Pakistan, charges were being dropped against a politician known to have ordered a 2012 arson attack on a Karachi clothing factory in which 252 workers were killed.

Violence and injustice persist, but there is now evidence of respect for the rule of law and for freedom of unions unimaginable even 18 months ago and a far wider acknowledgement of the role of women.

Summary

How did the world’s business media report that March UN meeting? Marking what’s arguably capitalism’s greatest ever achievement.

The Wall Street Journal didn’t. A few days later, its Facebook page, commenting on Bangladesh, included a far too frequent comment: “tariffs need to be applied to stop the exploitation of these workers here and yes in China and Vietnam too.”

In other words: to stop exploitation we should stop creating jobs. Great idea.

At The Economist, no mention. The cover story was all about Facebook.

Nothing at the Financial Times either. Its one mention of Bangladesh was pretty snooty about better education in poor countries though.

The fact is, since Rana Plaza, Bangladesh has made immense strides. Most, incidentally, the result of virtuous circles made possible by the forced collaboration of Bangladeshi manufacturers, Western buyers, multinational unions and tens (or maybe hundreds) of thousands of brave Bangladeshi protesters and whistle-blowers.

It was helped by interventions from Western politicians, but made possible by thousands of actions by hundreds of individual Bangladeshis. And it was publicized by hundreds of writers, sometimes encouraging Bangladeshis, sometimes infuriating them.

I was one of the writers some Bangladeshis complained about. I’m sorry about anything I got wrong, but I really was trying to be helpful. And now we DO seem to be moving in the same direction.

Real friends of Bangladesh will see the past five years as a horrible event spurning real progress in prosperity, human development, improved rights and gender equality.

The important thing today is to salute the huge strides Bangladeshis have made since that awful day when, with specialist equipment unable to get to Rana Plaza, thousands started digging their neighbors out of the rubble with their bare hands. As a result, it was chosen last week as the place to trial an ETI project where garment suppliers publicly appraise their buyers.

Clothing suppliers freely telling their clients what they think of them? That would be earth shattering even in Sweden or California.

To continue help continue this progress, Americans should buy Bangladeshi. Plus, it’s in their interests. For shoppers, Bangladesh is cheaper than Vietnam. Or China. Cheaper still without whopping great import duties slapped on. U.S. garment factories can’t recruit: but even unemployed workers need cheap clothes. No-one stands outside my local Primark moaning about how cheap it is; they’re fighting their neighbors to buy the cheap stuff while it’s there.

For President Trump, see above. Plus, Bangladesh isn’t China. Every garment bought from Bangladesh is one more poke in the eye for the Chinese. And, buy Bangladeshi is a great way of rubbishing Obama.

For political activists, you DO want poor people to be better off. Don’t you?

Mike Flanagan is CEO of Clothesource. Clothesource offers consultancy on the world garment industry using the wide resources of The Clothesource Knowledge Base, a comprehensive collection of information about sourcing for the apparel industry. He can be contacted at Flanagan@clothesource.net.

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