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After Settling Labor Issues, Dhaka Docket Focuses on Growth Plan

The Dhaka Apparel Summit went off as planned over the weekend.

And despite threats to the contrary, representatives from H&M, Inditex, C&A, Next and Tchibo were in attendance. The retailers had originally said they’d sit the event out over concerns about how workers and labor unions had been treated following the December factory strikes.

The change of mind came after the 35 Bangladeshi garment workers and union leaders who had been detained since December were released and the charges were dropped. The move was as a result of a meeting between the IndustriALL Bangladesh Council, the Ministry of Labour and the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

The stakeholders met to discuss initial actions and the subsequent worldwide outcry over allegations that the striking workers were fired, still others were arrested and labor unions were shut down. As a result of these talks, factory owners are also to pay fired workers and reinstate any who would like to return to work.

“We have seen an incredible show of global solidarity and this is an important victory for garment workers in Bangladesh, sending a strong message to the country’s industry to enter into a constructive dialogue with the trade unions,” said IndustriALL Global Union General Secretary Valter Sanches in a statement. “The issue that sparked the crackdown on unions at the end of last year still remains. We will continue to support the fight for an improved minimum wage and will closely monitor the situation until all charges are dropped.”

The one-day event was the second annual Dhaka Apparel Summit, which was hosted by the BGMEA and featured three sessions covering environmental policies, responsible sourcing and the future of the apparel industry there.

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Prime Minister Sheikh Hasina opened the event, addressing the state of the industry and its relationship to the rest of the world.

“Huge funds are required to overhaul the factories. So, various brands and buyers can come forward to assist the Bangladeshi factory owners. The government would continue to provide its support in this regard,” she said, according to Bangla Apparel. “We have to work on increasing our share in the world market … we have to formulate short, medium and long-term plans in this regard.”

Hasina asserted that these plans must include diversification in terms of products and export opportunities.

Nazneen Ahmed, senior research fellow of Bangladesh Institute of Development Studies, underscored the importance of the RMG to the country’s economic health.

“RMG sector is the driver for growth of Bangladesh’s economy. It contributes 13% to GDP. To achieve the $50 billion export target Bangladesh will have to earn $22 billion in the next five year with a 12% growth,” he said according to the Dhaka Tribune.

For the sector to reach its milestones, Ahmed outlined a need for new policies, innovation, a skilled labor force and diversification.

Shwarpna Bhowmick, country head of Marks and Spencer–which once only sourced basics from Bangladesh but now buys value-added products as well–echoed the need for diversification and said shorter lead times would also make the country more competitive.

The main concern, according to Syed Nasim Manzur, former Metropolitan Chamber of Commerce and Industry President, is the country’s reliance on foreign gas.

On the topic of worker’s wages, Commerce Minister Tofail Ahmed said buyers must pay fair prices for goods in order for factory owners to pay workers appropriately. He pointed out that despite the investment the industry has made in improving the safety standards, buyers continue to cut prices.

The U.S. Ambassador to Bangladesh, Marcia Stephens Bloom Bernicat, addressed the group, saying the U.S. was disappointed in the way the Ashulia strike was handled and called for changes.

“We do not think that there has to be union but there has also to be mechanism,” she’s quoted as saying. “There is social dialogue going on with the ILO, which would be a very striking breakthrough.”

The BGMEA estimates that the Ashulia situation will cost the sector $100 million.

Overall, the RMG sector totaled $16.41 billion in exports for the first seven months of 2016, which fell short of the projected $17.28 billion.