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Bangladesh Attacks Could Roil Garment Sector

Bangladesh—already struggling to upend its ill image—could now be fighting an uphill battle to convince buyers that making apparel there is safe.

On Friday, six attackers stormed Dhaka’s Holey Artisan Bakery in the upscale Gulshan area, slaughtering 21 restaurant goers using guns and machetes. The intent was reportedly to kill foreigners for hindering the progress of Islam.

Of those who were killed, most were reportedly Italian expats, some Japanese, one Indian, three Bangladeshis and one U.S. citizen of Bangladeshi descent.

Thirteen hostages were rescued from the scene after a near 12-hour standoff, and five of the gunmen were killed, one arrested. Two policemen were also killed.

The Islamic State of Iraq and Syria (ISIS) later claimed responsibility for the attack.

This act marks the latest in a series of Islam-related killings that brought on the deaths of journalists, religious minorities, liberal activists and aid workers in recent years.

Now, stakeholders are worried about how the rampant terrorism will plague the country’s lifeblood, its ready-made garment sector.

“This attack will turn away foreigners,” Agence France-Presse (AFP) reported Faruque Hassan, senior vice-president of the Bangladesh Garment Manufacturer and Exporters Association (BGMEA), as saying. “The impact of the attack will be very damaging for the industry. We are now extremely worried.”

Bangladesh had been shedding some positive light on its garment sector of late, working on new initiatives to help green companies’ supply chains, acquiring a $360 million investment to upgrade its waterways and improve trade, and seeing exports on a steady upswing.

Early last month, Bangladesh said it was on track to meet its fiscal year target of $27.37 billion, with total exports already surpassing $25 billion and a few weeks still remain before the June 30 fiscal year end.

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However, things are looking less good for Made in Bangladesh in the wake of Friday’s tragedy.

“This is a tipping point for Bangladesh,” Sarah Labowitz, co-director of New York University’s Stern Center for Business and Human Rights, said. “The government and industry have to demonstrate that they can secure the country and its economic future. This means leadership on counter-terrorism and governance for its major export sector. Especially if buyers are concerned about security, local industry will have to work with government to provide real oversight of workers’ rights in all factories.”

Labowitz has done extensive research in Bangladesh’s garment industry and in December warned that security in the country was deteriorating thanks to Islamic extremism.

As a result of multiple acts of violence, Labowitz said, “Foreign buyers have started to pull their expat staff and are requiring factory owners to provide armed security guards for buying visits. The precautions add costs for suppliers while threats reinforce an image of Bangladesh as an undesirable place to do business.”

Uniqlo parent company Fast Retailing has already suspended all travel to Bangladesh that isn’t critical for its staff and told those residing there to stay at home, and garment manufacturers in the country feel their other buyers, like Marks and Spencer, could follow suit.

The Alliance for Bangladesh Worker Safety expressed its condolences for the loss of life and said it will continue its efforts to help improve safety conditions at factories in Bangladesh.

“While each individual member company of the Alliance is responsible for their own global sourcing decisions, the Alliance will stay the course in Bangladesh despite this unspeakable tragedy, the organization said in a statement. “We believe improving safety for the millions of men and women who make a living in Bangladesh’s garment sector is a moral imperative—and while we are taking steps to ensure the safety of our staff and contractors, our work to improve safety in garment factories will continue.”