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Bangladesh Textile Industry

Bangladesh Textile IndustryKwstaninidi VioletaLaimou XristinaLoukopoulos Giwrgos Bellou Electra

What is the Textile IndustryAssociated with the design and production of cloth goodsInvolves importing and exporting natural and man-made fabricsRole of Textile Industry in the Economy of BangladeshTextile industry in Bangladesh accounts for 45 percent of all industrial employment Contributes 5 percent to the total national Income

Bangladesh Export78% of the countrys export earnings come from textiles and apparelBangladesh exports its apparel products worth nearly $5 billion per year

CountryApril 2013*Aprin 2014*%ChangeChina 11,41211,490,68Vietnam2,6673,08115,51India2,2152,3475,96Indonesia1,9171,838-4,11Bangladesh1,7811,778-0,21Mexico1,4731,4870,97Pakistan9821,0062,44Cambodia8738912,12Honduras7257452,87Salvador5445684,31WORLD 31,86432,8943,23


Labor costs are low, investment by textile manufactures in productivity- boosting technology lowered the labor costs in Bangladesh making one of the worlds low-cost producersThe advantage is that big importers increased their purchases at low prices Strong network of supporting industriesMany Western importers looking to diversify their supply sourcesFrom 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 apparelBenefit of Western consumers gain because they get low priced clothingBenefit of textile companies in Bangladesh gain from the increased demand for their outputBenefit of textile companies in Bangladesh gain because they get employment opportunitiesEconomically 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 BangladeshIt would seem in aggregate that the gains outweigh the losses, and indeed, that is the standard prediction of economic theory regarding free tradeWho 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?

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 Disneys 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 Walmarts 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 Walmarts expectations.



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