Monday, September 7, 2009

Government rejects BGMEA "demand"

As we can see visible signs of the Hatirjheel project take shape, I cannot help feeling how much of an eyesore the BGMEA building located inside the project is becoming with every passing day. If the building stands when the project is eventually completed, it will literally be a pain in the neck of the project. Dhaka's environmentalists have been demanding restoration of the canals and wetlands that have been grabbed since 1971 that now submerges Dhaka every time there is a heavy downpour because the water's natural flow to the rivers around Dhaka have been taken away by private individuals and enterprises like the BGMEA.

It was therefore with some curiosity that I followed the press conference of the BGMEA President where he "demanded" Tk 300 crores from the government as incentive package to provide eid bonuses and wages to the workers in the RMG sector. He took the plea that the world economic meltdown has affected the RMG sector badly where more than 100 enterprises have closed down and a good part of the rest is suffering from lack of business. In the press conference, the BGMEA high officials were quite forceful about the points they made. They "demanded" that the government should pay the amount by September 7th failing which the consequences would fall upon the government. The BGMEA president did not leave much to imagination what could happen if the wages and bonuses were not paid to the workers.

The press conference of the BGMEA and what came out of it naturally has scared the daylight out from the RMG workers. They work their heart out for their employers and look forward to the Eid festivals as bright spots in their otherwise dismal lives. They therefore brought out a procession to protest the stand of the BGMEA and sought government assurance that their wages and eid bonuses would be paid on time. The Finance Minister later rejected the BGMEA "demand" as unacceptable. The Finance Minister was also critical that the BGMEA had sought compensation for power and gas crisis stating that "such a demand from them ahead of Eid is not a good sign."
The RMG sector has been the success story of Bangladesh's economic development. From a scratch, the sector now exports materials worth in excess of US 10 billion a year to the developed countries, including USA. In building up this sector, the private sector has led the thrust, very much on its own, and today, they compete with the leading exporters of RMG in the world market as a force to reckon with. A few years ago, when the US ended the quota for Bangladesh RMG exports, it was apprehended by many inside Bangladesh and abroad that the RMG sector would collapse. It did not happen; instead the sector became more competitive and expanded its exports to the USA and markets in Europe.

In recent times though, the RMG sector has seen subjected to turmoil in which many RMG factories have been razed to the ground. Various opinions have been expressed for such turmoil in the sector, including external hand to destroy it because of its success. These opinions apart, the RMG sector has, in recent times, suffered from labour discontent that has not been inspired by external agents. Even if the contention that the turmoil in the sector is inspired by external agents is true, it is equally true that the conditions in which the RMG workers are employed are fertile grounds for such turmoil even without external encouragement. The minimum wage that a RMG worker receives is Taka 1300. In discussions that have been conducted in talk shows on private TV channels on this issue, there has been significant resistance from RMG owners to enhance this minimum pay.

While the RMG workers toiled, the sector has gone from one level of success to another. Even at this juncture when there is a scare in business around the world, the RMG sector has not performed at all badly. The BGMEA President has stated that 40 per cent of 1500 garment factories would not be able to pay workers before Eid because of 15 to 20 per cent cut in first two months of exports this year. Against this, the Export Promotion Bureau has provided statistics that suggest to the contrary. In FY 2008-09 Bangladesh exported woven products worth $5.9 billion, which surpassed the export target, set by the sector, by 4.13 per cent and 14.54 per cent more compared with that for 2007-08. Bangladesh exported knitwear worth $6.4 billion in FY 2008-09, which fell, short of its target by 2.35 per cent, but compared with the preceding year, it was 16.21 per cent more. These figures thus belie the grim picture given by the BGMEA.

The Finance Minister was therefore quite right in rejecting the BGMEA demand as "unacceptable." There are of course a lot of other things unacceptable here. First, there is no doubt the BGMEA was trying to get a share of the Taka 500 crore incentive package the government has announced to counter recession hit sectors. Its health however is, going by the EPB statistics, too good to even consider this sector as a candidate for a share of the Taka 500 crore incentive package. Second, the manner in which the BGMEA put forth its "demand" was also audacious. It left the government literally days to meet tits demand and threatened to hold the government responsible for the consequences if the "demand" was not met and the workers went on a rampage. This was tantamount to an attempt to blackmail.

The rejection of the "demand "of the BGMEA by the government, nevertheless, leaves a very important national issue unresolved. There is still no assurance whether the workers would receive their legitimate benefits before the Eid. BGMEA's reaction to the Finance Minister’s rejection is still awaited. Meantime, a fundamental question must be asked of the BGMEA. Why it is that whenever they have a shortfall in their business orders from overseas, the poor workers are the first to be asked to bear the consequences and that too with what are their fundamental rights, namely their salary and their job security?

Only a couple of weeks ago, I was attending a seminar arranged for a project a business chamber is arranging abroad for packaging Bangladesh's business. The sponsors offered a package for the trip that included among other things, price of travel by air. A gentleman sitting next to me made a few comments on the package but did not forget to mention that in his case, as he would be travelling Business Class, he would pay the extra amount knowing the package offered by the sponsors included travel by economy class. The gentleman is a RMG exporter! I would be interested to know how much of personal sacrifices the RMG owners make in their life style when they move to take away even the basics from their workers when their business go down.

There is a moral issue here. We all know as I mentioned that the country owes a lot to the RMG sector for its success. They employ a large number of people of whom a significant number are women. They thus contribute to employment generation as well as women empowerment. They also do this by first making themselves very rich. The moral question is how much of this they share with those who make them rich. The Taka 1300 as minimum wage is more than a mere figure; they should reflect this amount against the price line in the market and then rest in peace if they can.
The RMG sector is vital to our economy and therefore the government must find a way out of the issue of wages and bonuses of the workers. Going by the EPB statistics, there is no doubt the majority of the 1500 units is capable of paying this bonus and must pay. An immediate statement on this should come out from the government to avoid the threat the BGMEA has cleverly apprehended. The government could consider some relief for the sick units as a temporary measure for paying the Eid bonuses because the BGMEA's threat has already created the favourable ground for disturbances that the external agents must have already noted. After the dust settles, the government has the responsibility of sitting down with the BGMEA and point out where the latter has gone off the rails in the "demand" it has made from the government. The Finance Minister must be credited for dealing with this "demand "of the BGMEA correctly but he must also know that BGMEA has placed him and the government on a spot. By standing on Hatirjheel, the BGMEA will not have many supporters eventually and by making the workers easy target for their alleged misfortune as they have done in this case, they will lose much more.

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