Why this labour unrest  in RMG sector?

The ongoing labour unrest since August 29, which has led to several factory closures across the industrial hubs of Ashulia and Gazipur, has brought the lucrative Bangladesh readymade garment (RMG) sector to a critical crossroads, sending warning signals to buyers throughout the world.

This turmoil follows a period of political instability in July, from which the industry was hoping to recover after the formation of the interim government on August 8. However, the unrest, marked by attacks, property damage, looting, and arson in various factories, has raised concerns about industrial security. This disruption comes at a time when factories are under contract and immense pressure to meet deadlines for winter orders from global buyers, further exacerbating the crisis.

The reasons behind the unrest are the subject of much debate. The demands voiced by garment workers include equal opportunities for men and women, increased wages, improved benefits, and lighter workloads. In addition, delays in wage payments, alleged blacklisting of dismissed workers, and contentious issues surrounding unionisation have fuelled anger and dissatisfaction. Factory owners, on the other hand, claim the unrest is not primarily driven by the workers but by external elements, particularly political groups seeking dominance, especially over the scrap and rejects business. These groups, they argue, have incited disturbances to exert pressure on factory owners. A lack of adequate police presence has allowed the unrest to escalate and spread rapidly, presenting a grave threat to industrial peace and stability.

To quell the unrest, on September 2 the government deployed the army and police. While this intervention has restored some degree of order, the situation remains volatile and fragile, with approximately 100 factories in the Ashulia industrial zone alone forced to close on September 9 due to continued violent protests. This highlights that security measures alone cannot resolve the underlying grievances of the workers. There is an urgent need for factory management to engage in meaningful dialogue with the workers to address legitimate demands, as unrest in one factory can easily trigger a wave of disruptions across the sector.

This labour unrest, though seemingly localised, has far-reaching implications for both the economy of Bangladesh and the international reputation of its RMG sector. As the country's economic cornerstone, the garment industry contributes hugely as in 2023 it fetched over $47 billion from exports. Any prolonged disruption threatens not only the livelihoods of millions of workers but also the nation's macroeconomic stability. Bangladesh, as the world's second-largest garment exporter, faces intense global competition, particularly during peak seasons. Reports of international buyers diverting their orders to Cambodia, Indonesia, and elsewhere due to the instability should serve as a wake-up call for both the government and industry leaders.

Additionally, the unrest has diverted attention from other critical issues, such as energy shortages affecting the RMG sector as well as its backward linkage industries. The failure to address these challenges promptly will have ripple effects throughout the economy, exacerbating the difficulties already faced by the RMG sector.

The interim government, led by Nobel laureate Muhammad Yunus, has pledged to restore order and undertake necessary reforms. However, the urgency of stabilising the situation quickly cannot be overstated. Bangladesh's low-cost labour, while a competitive advantage, is insufficient to offset the risks associated with an unstable political environment. Restoring the confidence of international buyers will require more than security measures - it demands a comprehensive strategy that tackles the root causes of unrest, including workers' rights, governance, and corruption.

The sector should prioritise not only meeting international demands but also ensuring fair treatment of its workforce and bolstering security and governance in industrial zones. Failure to address these concerns risks deepening the current crisis, threatening not just the RMG industry, but also the entire economy.

The challenges facing the interim government are monumental. Political stability and law and order need to be restored swiftly if Bangladesh is to retain its standing in the global garment industry. The administration must collaborate closely with industry leaders to ensure that production timelines are met and that necessary governance reforms are implemented. Restoring the country's reputation as a reliable garment producer ought to be a top priority.

Moreover, the government should tackle the underlying issues that have plagued the sector for years, particularly corruption and political entanglement. While factory owners may have benefitted from political patronage in the past, these connections have now become liabilities. Reforming trade associations and ensuring transparency in business practices would go a long way towards restoring credibility in Bangladesh's garment sector.

Bangladesh's RMG industry stands at a pivotal juncture, facing both opportunities and challenges, especially as the country approaches graduation from its Least Developed Country (LDC) status. To thrive in the future, the industry will need to diversify its product range, embrace innovation, invest in technological upgrades, and enhance workforce skills. Collaboration among workers, factory management, and government remains essential to overcoming these challenges and sustaining the sector's growth.

Resolving disputes through dialogue could create a win-win situation for all stakeholders in the RMG industry. Positive relationships between workers and employers are crucial for fostering an environment of trust and mutual respect. This, in turn, will motivate workers and contribute to the sector's growth. By fostering a harmonious industrial environment, Bangladesh's RMG industry can navigate its current challenges and continue to play a crucial role in the country's economic development. The time for decisive action is now, and all stakeholders need to rise to the occasion.

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