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Last Updated: Monday, 14 June, 2004, 08:59 GMT 09:59 UK
The crisis of Bangladesh's garment trade

By Roland Buerk
BBC correspondent in Dhaka

Women garment workers in Dhaka
Women make up most of the workforce and stand to lose most
Bangladesh's government is preparing for a major upheaval in the garment industry, which accounts for around 75% of export earnings.

Ministers fear up to 40% of factories could go out of business, leaving 800,000 people unemployed, when the Multi-Fibre Agreement expires at the end of the year.

Since 1974 this global trade deal has regulated the $350bn world market in clothing.

It provides a system of quotas that limits the exports of more efficient countries like China and gives Bangladesh a share of the lucrative trade in the United States, Europe and Japan.

In 1995 the World Trade Organisation agreed to phase it out over 10 years.

Individual countries will still be able to control their imports with duties but the market will be much freer.

Quality control

Women make up most of the workforce in Bangladesh's garment industry and they stand to lose the most.

If people lose their jobs... they will have to do anything - legal or illegal - to survive
Ayesha Khatun,
garment worker

Five years ago Ayesha Khatun moved to Dhaka from a rural village to work in a garment factory. She has never regretted it.

"In the villages there are no jobs," she says.

"In Dhaka there are opportunities. We can get a job, then we can live, eat; we can do everything in Dhaka. Dhaka is better."

Ayesha spends her days trimming loose threads on finished clothes.

She has worked her way up to the quality control department at Azim and Son and now earns $50 a month, good money in an industry where some are paid as little as $12.

On the day of our visit, the factory is producing trousers and shorts for a German catalogue firm.

It is a big order but the owner, Iqbal Azim, is still worried about the future.

"Every manufacturer is concerned what is happening in the world," he says, pointing out that in sectors where quotas have been lifted the results for Bangladesh have been dire.

Bangladesh used to produce millions of anoraks, he says, but now "we don't produce a single piece for European countries because China has had a growth of 393% in that category in the last three years".

Cotton problem

Already thousands of people are being laid off.

It is particularly bad for the women, as they have few other job opportunities.

The Azim and Son garment factory in Dhaka
Azim and Son has big orders, but its owners are still worried

"These women emerged as the first generation of women workers in this country," said Mashuda Khatun Shefali, of the Centre for Women's Initiatives, an organisation that is offering classes in job hunting skills for unemployed garment workers.

"Once these women were earning money, they achieved some decision-making capacity in their families and in their personal lives. So they will lose this. It will be like back to the pavilion."

Bangladesh needs better infrastructure to compete in a freer market - more roads and more efficient ports, cheaper and more reliable power.

But its main problem is that it does not grow cotton.

The raw materials for the garment industry have to be imported, adding greatly to the cost.

The government is appealing for more time.

"We want this present market share to continue beyond 2004," says the commerce secretary, Sohel Ahmed.

"We have said they should reserve 20% of imports from less developed countries. That includes Bangladesh. If they do so we'll not be that scared. We'll have an assured market share and then we should be reasonably satisfied."

The end of the Multi-Fibre Agreement could well mean cheaper clothes everywhere.

But it will be workers in countries like Bangladesh who will pay the price.

"If people lose their jobs, they'll have few options. They will remain unemployed," says Ayesha Khatun.

"So they will have to do anything - legal or illegal - to survive. For me, if I lose my job I will have to do anything because I have to live. Our jobs must be saved."

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