International recession, labour unrest in RMg sector: does Bangladesh face export downturn like Cambodia?

Staff Reporter

Does Bangladesh face downturn in garment exports like Cambodia due to economic recession in the United States and continuing labour disputes at home?This question has become relevant as Cambodian readymade garment exports plummeted by 46 per cent during the last quarter of 2007 due to these two factors, chairman of the Cambodian Garment Manufacturers Association Van Sou Ieng was quoted by AFP as saying.President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Anwarul Alam Chowdhury Parvez said, "Country's RMG export was on the right track until January. The ongoing labour unrest is yet to show any adverse effect. But then it will hit hard the industry if it continues."He said the US economic recession will continue for the next 6/7 years. If Bangladesh fails to handle the labour issues it will fail to get advantage of the New Partnership Development Bill. And this may result in a fall in export to the US."Labour issue is one of the main concerns in the US," he said. Parvez said the ongoing labour unrest is hampering production in the factories, increasing the cost of goods and also casting negative impacts on the country's image."The industry leaders, government and also the media have to tactfully handle the labour issue to keep the sector alive."Bangladesh's labour unrest is mainly linked to low wages and unfavourable working environment in the factories. Continuous deprivation of the workers by the factory owners and misbehaviour by the mid-level management creates unrest among the RMG workers. However, the factory owners always have denied the allegations. They said most of the factories have implemented the government fixed low wages and are paying the other facilities in line with the labour laws. Bangladesh's RMG export increased significantly in the last couple of years and last year export earnings from it reached US$ 7.8 billion. During the July-November period of fiscal year 2007-08 woven export fell by 3.17 per cent while knitwear export increased by 6.19 per cent. An economic downturn in the United States, which buys 70 per cent of all Cambodian textiles, and continuing domestic labour disputes contributed to the plunge, said Van Sou Ieng, chairman of the Garment Manufacturers' Association of Cambodia.Until last year, the sector had enjoyed annual growth of up to 20 per cent, he added. But export growth for all of 2007 stood at only 2.4 per cent, representing 2.9 billion dollars, Van Sou Ieng told AFP, adding that the outlook for 2008 'surely was not good.'"Definitely some factories will close, some people will lose their jobs," he said adding deteriorating labour relations are also weakening the sector.Industry officials said an estimated 1,100 separate unions are operating in Cambodia's 300 garment factories, with some manufacturers having to deal with as many as seven workers' groups at one time.The minimum wage for garment workers in Cambodia hovers around 50 dollars per month, the AFP report adds.