bangladesh textile industry
TRANSCRIPT
What is the Textile Industry
Associated with the design and production of cloth goods
Involves importing and exporting natural and man-made fabrics
Role of Textile Industry in the Economy of Bangladesh
Textile industry in Bangladesh accounts for 45 percent of all industrial employment
Contributes 5 percent to the total national Income
Bangladesh Export
78% of the country’s export earnings come from textiles and apparel
Bangladesh exports its apparel products worth nearly $5 billion per year
Country April 2013* Aprin 2014* %Change
China 11,412 11,49 0,68
Vietnam 2,667 3,081 15,51
India 2,215 2,347 5,96
Indonesia 1,917 1,838 -4,11
Bangladesh 1,781 1,778 -0,21
Mexico 1,473 1,487 0,97
Pakistan 982 1,006 2,44
Cambodia 873 891 2,12
Honduras 725 745 2,87
Salvador 544 568 4,31
WORLD 31,864 32,894 3,23
TOP 10 TEXTILE EXPORTERS TO THE US IN JAN-APRIL 2014
Labor costs are low, investment by textile manufactures in productivity- boosting technology lowered the labor costs in Bangladesh making one of the world’s low-cost producers
The advantage is that big importers increased their purchases at low prices
Strong network of supporting industries Many Western importers looking to diversify their supply
sources
From an economic perspective, was the shift to a free trade regime in the textile industry good for
Bangladesh?
Applying in a strictly economic calculus, the following seems to be the case: Benefit of Western retailers because they get a low cost source
apparel Benefit of Western consumers gain because they get low priced
clothing Benefit of textile companies in Bangladesh gain from the
increased demand for their output Benefit of textile companies in Bangladesh gain because they
get employment opportunities
Economically who benefit when retailers in Europe and the US source textiles from low-wage
countries such as Bangladesh?
The losers in this process are textile manufactures in other countries, who have lost business and jobs to Bangladesh
It would seem in aggregate that the gains outweigh the losses, and indeed, that is the standard prediction of economic theory regarding free trade
Who might lose? Do the gains outweigh the losses?
What are the causes of the weak safety record of the Bangladesh garment industry?
No safety standards in place to protect the employees Conversion of many old, ill equipped buildings into
factories
Do Western companies that import garments from Bangladesh bear any responsibility for what happened at the Rana Plaza
and other workplace accidents?
RESPONSIBILITY OF BANGLADESH
GOVERNMENT
The government has a duty to protect
Bangladesh people against the human right abuses by third parties
RESPONSIBILITY OF WESTERN COMPANIES
AND PEOPLE
Western companies continue to demand
large amounts of clothing with low
price
Western people still buy clothes of this companies without care if people die
Do you think the legally binding agreement signed by H&M, Zara, Tesco, and others will make a difference? Does it go far enough?
What else might be done? First significant effort to acquire a moderate improvement in the
working conditions, compared to the current scheme, may be a start of an international motivation to inspect these conditions. Although a common plan is needed
In order the agreement to go far enough, a supervision of the International Judicial Communities (such as the International Court of Human Rights) per year should be included
The agreement could include the reference of strong penalties in both manufactures and the local authorities who do not apply the rules or remain tolerant to the trespassing of the law
What do you think about Walt Disney’s decision not to purchase merchandise from Bangladesh? Is
this an appropriate way to dealing with the problem?
The decision was right because this was the appropriate response to a lack of governmental labor enforcement. "After much thought and discussion we felt this was the most responsible way to manage the challenges associated with our supply chain", said Bob Chapek, president of Disney Consumer Products.
What do you think of Walmart’s approach to this problem? Is the company doing enough?
What else could it do? Walmart said that it would hire an outside auditor to inspect
279 Bangladesh factories and publish result on its website by June 1, 2013
Forced factory owner to make necessary renovations
With this action Walmart helps to improve workers labor standards
Walmart must commitments the suppliers to meet strict safety standards and must measure how well suppliers are meeting Walmart’s expectations.