Bangladesh in global production networks: Identity search

Imtiaz A. Hussain | Published: September 16, 2019 21:43:08

THE GOVERNMENT IS SET TO LAUNCH A PROJECT TO FUND THE ICT ENTREPRENEURS AIMING TO DEVELOP INNOVATIVE POTENTIALS OF YOUNG PEOPLE IN THE SECTOR: "Under the project to be called 'Bangabandhu Innovation Grant', each entrepreneur in hardware and R&D sector will receive the fund from Tk 1.0 million to Tk 50 million," said State Minister for ICT Zunaid Ahmed Palak while briefing the media on a three-day Digital Device and Innovation Expo in Dhaka on September 13, 2019.                 — Photo: bdnews24.com

Bangladesh may soon find itself tossing and turning between two key questions: 'What are we', that is, identifying what the country sees itself as; and 'What do we do with what we are', the obvious sequel imposing often taller tasks than meets the eye, if, and only if, country leaders (economic, political, social), have a future vision and mission. In many countries, if we discount retrospective accounts, the former is often accented more than the latter. Turning to Bangladesh, from the crippling oborrodhs a few years ago to entering middle-income society today, it has traversed a wide spectrum just in this century, making that identity-search far more complicated, yet the vision/mission plausibly easier: all leaders, economic, political, or social see and plan for more of the future in times of stability than insecurity. Still, a more visible dent has to be made to anchor the country's name-tag, as was done in 1971 through the liberation war.

Addressing the first question, at least three globally recognised landmarks can be spotted with the country's political economy and socio-economic identity, each representing a threshold escalation: 'basket-case' at birth; a ready-made, low-waged icon by the end of the 20th century; and now upon a middle-income ladder. One problem is how we have absorbed these changes: shifting from the first to the second was, for natural reasons, hushed up, after all, not many countries wants to remember a 'beyond-the-pale' association, if any at all, like a 'basket-case'; yet it is with the shift from the second RMG (ready-made garments) identity to the middle-income third that ambiguity arises, again, for logical reasons. Since the RMG breakthrough filled up our coffers and made us a viable international player, not to mention continuing as gloriously more than one generation later as it did after it first plucked the country out of its plight, this identity has been a hard nut to crack: there is a lot of money at stake; and where lots of money is at stake, relishing the fruits or wishing for them (the 'revolution of rising expectations'), and sustaining the status-quo has been the norm. Disassociating the low-wage criterion of this identity gets more attention than reaping the rewards: we flash more news of our spiralling export-income than the generally static wages, and even if the latter results in strikes, the 'pie' still commands as much attention as the 'protest'.

This is where the 'east is east, west is west, and the twain shall never meet' metaphor plays out resoundingly. We want the RMG income magic too much to disassociate with a low-wage industry, especially as the climb into a middle-income bracket is increasingly at odds with the source of the income. For a start, a middle-income society, by definition, means spiralling wage-hikes over time; and though benefits have spiralled in our RMG sector, we simply cannot pass off an RMG worker as a middle-income earner, let alone fit into the middle-class, where education for the youth, more than work on assembly-lines, is the norm. The result is a clash between reality and rhetoric: a reality of low wages, and the rhetoric that comes with upward-mobility, not necessarily of a wage anymore, but the salary depicting a middle-income status.

We have enough people under the poverty-line to exhaust the low-wage pool for at least a decade more. Since that in itself means our RMG magic will stay at least as long, there is no rush to change the profitable status quo. The point is, the longer it stays, the more it will attract other low-wage industries from global production networks, thus clamping down on upward wage mobility, while freezing not only low-wage means of production, but also the capacity to change into a viable alternative when and if the demand comes. With Mercedes-Benz announcing this last week its desire to shift some production here, like South Korea with the RMG sector and Japan on other fronts, Bangladesh has become too low-waged a country to hush up that identity, thereby making diversification from a low-wage base far more difficult in the future. In fact, the country's economic boom depends upon pitiable wages: the more the industries to seek low-waged workers, the brighter our stars seem set to be, at least in the short term. We cannot say 'no', because we need the income, but with every 'yes' the identity crisis thickens.

It might be the way to go, since money matters more than, say, the reputation that comes with growth, at least in this 'fake news' era, when anyone claiming anything fantastic always draws a 'like' (Facebook) crowd. Terms like 'middle-income society' tap this 'reputation' button with more dubious materialist claims. Even if those claims rest upon solid evidence, other features of a middle-income society are far from being institutionalised, or even promising to become so: social security provisions represent one of them, opening up a can of requirements to make that claim legitimately; a services sector expanding, preferably at the expense of the manufacturing counterpart over the long-haul, is another; and a third is economic diversification, which has to become part and parcel of this particular economic landscape.

Against that backdrop, Bangladesh's identity remains mixed: the RMG namesake, middle-income claims, and even agricultural (the 'Sonar Bangla' refrain), remain as valid as any other to describing the country. Of those, agriculture is retreating and RMG attachment is likely to expand since it can now ride on the China-US tariff war; but though the per capita income is set to climb, the economic middle-income track is unlikely to be matched by the sociological and economic trappings of a middle-income country.

If the RMG label prevails, costs will mount: not just the attendant low priority afforded environmental standards (for example, factory pollution reminiscent of our leather enclave in Hazaribagh once), but with it humans rights (as, for instance, the basic protections found in other, more middle-income countries), law and order, and with it, overall security. Like a curtain, poverty obscures these 'finer' strains of human living.

If a middle-income picture emerges ahead of the pack, we can expect more improvements in health, for sanitation, gender balancing, and a variety of additional institutions supplying the necessary services. The country's higher threshold would be comparable to an altogether different group of countries, but how the low-wage segment would be ironed out remains unclear, indicating the low priority given the vision and mission abovementioned.

Of course, Bangladesh may, most likely, end up where it is right now: smack in the middle of permanently low and climbing wages. The short-term benefits of being so positioned barely masks the long-term costs alluded to. Only through trials and errors can countries come out of this nexus, but that is the one arena the country is not experimenting with: many trials and errors have taken place (relocating the tannery heartland from Hazaribagh to Savar, only to find the effluent treatment plant malfunctioning; Rana Plaza, and Tazreen factory fire, both of which instilled unthinkable reforms without going the full distance).

One other option remains: a digital Bangladesh as an evolving identity. Much can be said to support this contending case; and the country has made notable strides. Yet, the 'innovative' group is too small to give this the sturdy infrastructure it needs; not enough of the right kind of education has been imparted to make use of software creativity. In fact, this might become the dividing line between low-waged and middle-income societies: education. Identity-assertion and identity-salience begin and end with that extra knowledge. By that yardstick, we should have our work cut out for us.

Dr. Imtiaz A. Hussain is Professor & Head of the Department of Global Studies & Governance at Independent University, Bangladesh.



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