After independence in 1971, Bangladesh initially followed a planned-economy socialist model, but quickly experienced crippling shortages. Over the next decade, the government moved to a more capitalist-oriented model, and the garment industry emerged alongside jute processing as a cornerstone of manufacturing. From the 1980s, factory owners pursued a “feminization” policy – employing a mostly female workforce (as much as 90 per cent women), ostensibly because the women had “nimble fingers” and skill in sewing. In fact, labour analysts say, factories preferred women because they were perceived to be more docile and less likely to agitate around working conditions.
The industry staked its competitiveness on extremely low wages which was possible because of huge unemployment, a dearth of formal sector work and extreme poverty, which made the $1-a-day jobs an appealing alternative for the rural poor who flooded the export-processing zones on the edge of the capital.
Through the late 1990s and early part of this decade, Bangladesh also leveraged a World Trade Organization quota system, that gave it preferential access to the United States and European markets, to build up the size of its garment industry. There was concern that the end of the Multi-Fiber Agreement (the U.S. quota system) might cause large-scale unemployment, but Bangladesh weathered that hurdle and continued to grow, in part by continuing to keep wages among lowest in the world. Businesses opted to stay in Dhaka despite repeated episodes of political upheaval on the national level; the sector was usually unscathed, in part because many of the country’s most prominent and wealthy families had become key players.
Once the industry was built up – to the point where it provides 80 per cent of manufactured exports – government became keen to protect it, and factory owners were successful in most of their efforts to block agitation for higher wages. There was widespread labour unrest in 2006, which finally forced the creation of a minimum wage of $24 a month for entry-level workers, and a strike involving more than 100,000 workers pushed it up again in 2010 – today, the minimum wage is $37. But factory owners have managed to block many unionization efforts – a leading labour organizer was tortured and murdered this year after being repeatedly harassed by police and government security agents – and audits by international fair trade organizations consistently find violations of minimum wage payments, safety standards and working conditions.
Today Bangladesh is second only to China in the size of its garment export industry, and while China now faces intense pressure on wages, Bangladesh has kept them low, recognizing this as the country’s chief lure for an internationally mobile garment production sector.
The predominance of women in Bangladesh’s garment factory has had startling social consequences; as many young women became the only breadwinners in their extended families, traditional social mores about gender and age were upended. The country saw a marked improvement in its level of gender equality and because of it, many development theorists say Bangladesh has made some of the most significant progress of any developing nation in lowering poverty levels and achieving many Millennium Development goals. The country has dramatically lowered its child mortality rate, increased girls’ education and access to clean water, and has improved nutrition levels. Bangladesh, long derided as a “basket case,” now far outstrips neighbouring India in the rate of improvement of these basic development indicators.