Sunday, December 9, 2012

Nischintpur: Wake up call for the government and leaders of the RMG sector

Holiday, December 7, 2012
M. Serajul Islam

The country watched the Nischintpur/Tazreen garments factory tragedy unfold before their eyes on the small screen at home. The government did some politics after failing in its arson/conspiracy theory and paying the relatives of the dead financial grants to try and keep things in control. It declared a day of mourning. There was a surreal ring to all these efforts. One felt that fairness and justice are dead in this country, at least for the poor and the unfortunate workers in the factories  whose lives are worth just a price and that too as meager as the pay they receive . Many TV stations allowed in their talk show programmes the opportunity to the owners of the garments factory led by present and past officials of BGMEA to explain the tragedy. Although they regretted the deaths, the RMG owners used their appearances before the media to inform the public that the RMG factories are models of compliance comparable to such factories anywhere and even better and that the owner of Tazreen should not be held responsible for what was an accident after all!

A former BGMEA top official explained that the Tazreen was one such model factory. He told viewers that where compliance required two staircases to be built in each floor of a factory the size of Tazreen; it had an extra third staircase. He however failed to tell viewers one gruesome fact about the three staircases; that it led to the godown in the ground floor and not to the exit! The workers used the 3 staircases to walk to the godown where the fire started due to a transformer that burst where there was to be no transformer under compliance that turned the entire ground floor into an inferno as a result of the materials in the godown that blocked the exit and roasted them alive. The stairs also became funnels that took the fire up the stairs like a chimney and roasted many more workers in the upper floors. There was no way for these workers to walk out because the “compliance perfect” Tazreen had failed to build a wall to create a passage from the stairs to the   exit.                                                                                                                 

The other facts that came out of the tragedy also point to gross negligence on part of those whose duty it was to ensure the factory was compliant. It was built on what was once agricultural land. The road constructed to the factory was an apology of one. It was a major obstruction for the fire service trucks and personnel from reaching the factory after the fire started and fire fighting department was called.  These are serious flaws in compliance that BGMEA officials tried to explain off. Then there were of course the human failings that are of criminal nature. When the fire alarms were sounded, supervisors of Tazreen threatened workers from walking off from their work telling them that there was no fire on the premise. The most serious unexplained part of the human factor of the tragedy was that the workers of Tazreen were locked inside a steel gate at each floor even after the fire went out of control! No supervisor cared to unlock the gates leaving workers to break windows to come out. Those who succeeded lived; those who did not, died. 

Western Ambassadors in Dhaka have been raising their voices about the dangerous conditions in the garment industry in recent times. The US Ambassador who feels and rightly so that the industry has great potentials and already the backbone of Bangladesh’s economy  has also expressed that there are dark clouds in the horizon that must be addressed that the government and the garment factory owners are sadly side-stepping . In an article in Wall Street Journal, a lot of the fears of the western Ambassadors have been reflected while reporting on the Nischintpur tragedy. Appropriately titled “Why Dhaka Keeps Burning: A case study in how favoritism in one industry-garments- hurts everyone else”   the writer Joseph Sternberg has flagged what is wrong with the industry. The writer stated that single minded pursuit of the RMG sector in Bangladesh  has led to a situation where this sector with US$ 19 billion in exports, accounts for 80% of the country’s exports and 17% of the country’s total economic output. Yet curiously what no one seems to talk about or write upon is the fact that the country has no natural advantage in this sector except cheap labour!


Joseph Sternberg explained that such single minded devotion to one industry that is otherwise succeeding is understandable. What is neither understandable nor explainable by economic theory is the fact that after “concerted push into textiles for nearly three decades, the effort has not led to the sequential flowering of other industries, as economic theory would predict.” He blamed lack of government’s vision and over-favoritism to the RMG sector for the failure of the “sequential flowering of other sectors” like it has happened in all other countries that started off their economic journey on the back of a single sector though it must be added that in case of Bangladesh, it continued to favour its one product based economic success in a sector in which it has no natural advantage.    The writer also blamed a nexus between the government and the leaders of the RMG sector for the failure of the “sequential flowering”. Joseph Sternberg felt that low wages and poor working conditions  are deliberate, the product of special labour laws for the RMG sector that ban unionization and regulate pay to keep wages depressed in the name of competitiveness. The writer concluded that these are the why “Dhaka keeps burning”.


The government and the garments owner have been elated in recent times about the flight of RMG business from China to Bangladesh because of abundance of cheap labour in Bangladesh against rising labour costs in this sector in China. The transformation of the Chinese economy no longer requires the country and its businessmen to pay the sort of emphasis on the garments industry as they did when like the Bangladesh economy; the garments industry played a major role in the country’s economy. With labour costs escalating, the Chinese RMG products have been losing its competitiveness. The government and the business sector have been seeing this coming. China has diversified its economy and there has been “sequential flowering of other sectors”.  Therefore while the flight of RMG business from China to Bangladesh has benefitted Bangladesh, Chinese economy has not been affected by the move because in the diversification that it has achieved, RMG sector is not a major factor in the Chinese economy anymore.


Therefore if people in Government and business are seriously thinking of Bangladesh’s economic future, there is no reason for seeing the flight of RMG business from China to Bangladesh as a boon for the country unless they take corrective measures with vision. Bangladesh’s main claim to becoming a leading RMG producing nation is the cheap labour. This is not going to last; in fact this is too good to last unless the government and business look upon this issue seriously. The US$ 45 a month payment the RMG workers receive today at their point of entry is unbelievable.  While acknowledging the compulsions of the RMG owner about raising wages higher and still remaining competitive, they should ask whether an industry that pays such low wage can survive in the long run. Those outside the RMG industry at home and particularly abroad would refer to such low wages and the other conditions in which the workers work and live as a case of slave labour.  

Bangladesh entrepreneurs in the RMG sector have done a lot to be proud. They have given Bangladesh’s economy its biggest boost.  Some of these entrepreneurs are extraordinary leaders of the industry. But the country has over 5000 such factories employing nearly 3 million workers and has been a basic factor in women empowerment in the country.  If one accounted for the subsidiary industries such as packaging, etc that have grown because of the success of the RMG sector, the employment figure would be over 4 million. The mix of these extraordinary leaders who are by far few and the majority who are not is unfortunately a very bad one. By any account, Tazreen owners are guilty of faults for which they must pay under the law of the country. Equally, all the faults that have come to light about Tazreen are major ones against BGMEA’s tall claims of compliance. These must be investigated. Not only must the owners of Tazreen be booked; those whose duty it was to oversee compliance must also be brought under the purview of the law. 

There are many more Tazreens and despite the claims of the BGMEA, compliance for the majority of the RMG factories is mainly on paper for a large number of garment factories.  By the count of those who qualify and extraordinary entrepreneurs in the RMG sector, overwhelming majority of the 5000 RMG factories are sick industries who survive but barely and cut the corners that brings the sector bad name. In a corrupt country like Bangladesh, BGMEA officials should think twice before making the claims that they have made after the Nischintpur tragedy. In fact, they are the ones who should be held guilty for misleading the country than the media that they have accused. They should consider what these sick factories are doing for their lies the seeds of the destruction of the successful RMG sector of Bangladesh.  

Tazreen should be a watershed on a few major counts. First, it should alert the government that the wage structure in the sector is unbelievable and cannot be sustained even in the short run. There are no conspiracy theories in the sector about which the BGMEA and the government tell us every time there are disturbances in the sector. These disturbances are legitimate outpouring of the frustrations of those whose sweat makes few of our compatriots very rich. Second, the government planners should read the WSJ article and take lessons as it should from China. The mainly one track pursuit of the RMG sector can only bring disaster for the future of the country. Diversification is the key and the country should not gloat that RMG business is fleeing from China  to Bangladesh. It may not be business that is coming to Bangladesh; it could be death and destruction unless we see the writings on the wall to which the western Ambassadors are pointing and on which the WSJ and other newspapers are writing. 

Bangladesh, a resource poor country, can achieve the close to 10% growth rate required to become a middle income country and sustain it primarily through external assistance in the form of FDI.  The poor image of the country is unfortunately a major obstacle for such a flow of FDI. To the many factors that have contributed to the poor image of the country abroad, Nischintpur has added one more. It received breaking news coverage  of the TV all over the world where the sad conditions of workers, their poor wages and the other paraphernalia did not do Bangladesh’s poor image any good at all. It simply added fuel to the fire. With the Hatir Jheel project about to be completed shortly, BGMEA’s many storied building will stand right at the middle of it as a reminder of illegality. Unfortunately the BGMEA leaders did not add to their credibility in handing the Nischintpur tragedy as much as Nischintpur did not add to the image of the country. People would be asking as long as this building stands whether the leaders of the garments sector can be trusted in leading the economic sector of the country and whether or not they are taking the country for a ride to which the government is contributing and assisting.

As far as the government is concerned, 112 people dead is a very small matter. That they came from the poor and the disadvantaged section of the society will help the government forget the tragedy quicker. Further, the ability to correct the situation may also no longer be easy now because the corrective measures should have been taken long ago. The RMG sector is moving to the edge of the precipice.  Nevertheless, no one should be misled by the ironic name of the location of Tazreen; there is no scope of being unconcerned or “nischinto” anymore. Nischintpur is a wakeup call for the government and the brilliant entrepreneurs of the RMG sector to work together and correct the grave ills in the sector to avoid the nightmarish consequences that are in the offing.   

The writer is a retired Ambassador.




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