Bangladesh has for decades remained the hub of the global fast fashion empire producing major brands such as H&M, Gap and Zara. Within three decades, this industry contributed to the changing of the country from one of the poorest nations to a lower middle income economy. In recent times, however, political unrest. And economic challenges have threatened the prospects of its $55 billion ready made garment sector.
Consequences of Political Instabilities
In August There was a wave of unrest due to the overwhelming frustrations of the people that led to the overthrow of Prime Minister Sheikh Hasina’s government. Costing many lives, hundreds of deaths. And chaos throughout the nation. Many of the garments factories were put on fire. And the whole country suffered an internet blackout. Which hampered production activities. Corporations like Disney and Wal-Mart have already started importing blouses from foreign countries, making it harder for Bangladesh’s economy.
Impact on Factory Production and Workers’ Protests PoliticalÂ
The insurgency includes those at the head of the government. Continuing anti-war campaigns within the garment sector spill into the garment industry. About 60 factories located around Dhaka city are expected to be shut down because of the ongoing wage dispute where the workers are demanding for better pay. This perturbation is likely to alarm international investors skilled in Bangladesh as a dependable manufacturer. Mohiuddin Rubel, the director of the garment manufacturers. And exporters association of Bangladesh. Expressed fear that the brands may use other countries such as Vietnam as an alternative for sourcing.
Decline in Exports and Economic Crisis.
According to industry analysts, the political scenario can lead to a drop of exports in the range of 10-20%. That is scary considering garment exports contributing to 80% of export earnings in Bangladesh. Long before the recent unrest, the country was grappling with deep seated challenges like child labor scandals, deadly factory accidents and the economic toll of Covid-19. Increasing production costs and less demand for fast fashion has had adverse effects on Bangladesh’s economy, resulting in a plummet of its foreign currency reserves.
Increased Economic Concerns
The economic problems that are always associated with Bangladesh are not limited to the garment industry. The same crooked practices in the banking system have inhibited economic growth and led to wasteful expenditure on development programs by the government. Business tycoons affiliated with the previous government defaulted on the debts, leaving the banking sector looking bad.
Dr. Ahsan Mansur, the new governor of the central bank of the country has suggested that changes are required urgently within the economy to address such situations. He cautions that recovery will be a slow process. And further stresses on the need for further funds in order to recover such as another IMF rescue package.
Final thoughts
The East Asian net garments manufacturing hub continues to disintegrate. And evolve even more rapidly than the economic development of Bangladesh. To avert impending disaster the country. Which has remained under British rule for a number of years will be forced to rethink the role of the state. And engage in politically difficult changes.
