The USA suspended the Generalized System of Preferences (GSP) facilities on the entrance of Bangladeshi product into the US market which has created lack drop in our economy.
Because of this suspension each and every Bangladeshi is very upset. The USA is our long outstanding partner of development.
In fact, there was no such kind of GSP facilities in garments sector in the USA. They have talked about the safety, development of the standards of the laborers, pending justice of murder of Aminul and some other minor issues.
It is unfortunate that, they have brought into consideration the accident of Savar Rana Plaza, Tazrin Fashion, unsolved case of Aminul murder case. Since 2007, the biggest labor union of the USA, AFL- CIO has been persuading the USA to stop the GSP facilities for Bangladesh. The New York Times (July 25, 2013) writers "Bangladeshi garment industry`s trade group has seen its influence soar as the country has become a global garment power". Meanwhile, US congressman Sander Levin visited in Bangladesh to assess the progress of workers safety of the country.
Next GSP hearing will be on December as commented by USA envoy Dan W. Mozena. On July 19, the US government made public an action plan outlining measures to protect workers’ rights and address those in a meaningful way.
On the basis of this action plan, the United States looks forward to working on the actions with Bangladesh it needs to take in relation to potential reinstatement of GSP benefit.Eilen O’ Kane Tausher has been appointed as an independent chair of the North American Alliance ,a platform of US based retailers for Bangladesh worker safety.
Though with the GSP facilities almost 4800 products of Bangladesh can enter into the US market without paying duty, the garments sector does not enjoy this facility any more. There is a chance that suspension of GSP facilities will be reconsidered by the USA during December of this year.
Recently, the man-made tragedy of Savar Rana Plaza is certainly an unfortunate event for Bangladesh. We come to know about the ill interest of a particular class of people ignoring the established rules and regulations. Due to this tragedy, almost, 1130 people died a tragic death and almost 200 people got severely injured.
The tendency of ignoring the law of the country by some particular class of people is responsible for Savar Rana Plaza tragedy. When a country turns into a developed country from a developing country, there is exploitation and deprivation of labor, although it is not accepted at all.
History showed in every country such type of incidents during the industrial reversal. The tragedy of Rana Plaza showed us how the labor exploitation and disobeying the laws have been damaging the country.
Not only Rana Plaza but also many buildings of every corner of Bangladesh including Dhaka city have been built without following design, even those are built without the permission of concerned authority, many people change and expand the design of the buildings without feeling any hesitation.
On the other hand, according to the rule of load management, it is said that when a building is made with 10,000 people load capacity; only 6000 people can work there. The building must be checked by a structural engineer if any type of crack is found. We can`t only depend on government only for that, rather we have to take private initiatives and obey ethical values to avoid such type of accidents.
At the same time, I would like to invite NGOs to come forward for rehabilitation of the victim workers. Bangladesh Army has done a praiseworthy job finishing the rescue job skillfully. Certainly it can never be expected that again and again the laborers will become the victims of such kind of accidents.
Already, the image of Bangladesh has been tarnished due to the continuous accidents of Savar Rana Plaza, fire breaking at Tazrin Fashion and injustice to the case of murdered labourer Aminul. Some foreign buyers are also taking advantage offering lower price than before.
For the present situation private entrepreneurs are more responsible than the government. It is the decision of the owner how he/she operates the factory. There should be some definite rules and regulations. But many private entrepreneurs don`t want to obey these regulations, and even many of them do not know about those. Before Savar Rana Plaza Tragedy, almost 125 people died in the outbreak of fire at Tazrin Fashion.
No one wants to rectify the environment of factory in spite of all these tragic deaths. The NGOs and members of civil societies, local politicians, and administrations should jointly check whether the buildings and fire safety codes are properly maintained everywhere or not.
It is right that being a developing country Bangladeshi economy is passing through a tough time. The GDP growth rate of Bangladesh is around 6.5% which is mainly for garment industries and the brain gain money remitted by immigrant Bangladeshis. Otherwise, the economy of this country never would be in such a good position even in adverse world economy and Arab spring. If we analyse the trade composition of Bangladesh, we find that the role of garment industries in Bangladesh is very important and although we get only 25% value addition almost 75% of export exchange come from this section. 60% of the readymade garments go to Europe, 24% goes to the USA and 5% goes to Canada. Dr. Victoria Wise from Deakin University of Australia said that the Savar Rana Plaza tragedy is a very tragic event and it has occurred due to lack of cooperative governance. There is a particular class of experts who always ignore the roles of government and say the government should not work as a regulator but as a facilitator.
After the tragedy of Savar Rana Plaza when the rescue mission was going on a well-known engineer and advisor to ex-caretaker government and currently a Vice Chancellor of a private university said that they should bring the equipment from foreign countries to rescue the victims. According to his opinion if we brought the equipments from Calcutta by road, it would take almost 16 hours. Here the question arises whether they have such type of equipments or not. Even the private sectors, civil, defense, the arm forces, fire Brigade, and authority tried to finish the rescue mission together causing the least damage.
The disciplined leadership of armed forces to finish the rescue mission the praiseworthy role of Bangladeshi army in a crucial moment. But it is unfortunate that in spite of all these activities almost 1130 people died. Actually Savar tragedy remind us how cruelly severe greed can exploit humans.
We can compare this event with an accident of the USA happening a hundred years ago. The industrial revolution had not stopped due to this type of accident in China, India even in many parts of the USA. Due to pre-take-off stage economy such type of accidents took place but we need to check that in future we can prevent these.
Bangladesh holds 2nd position in exporting the garment products due to cheap labor. Almost 20 billion taka has come from garments sector. Regarding this issue many countries show their sympathy towards Bangladesh and again many of them use it as a tool to exploit Bangladesh. The trade competitive countries become critical to Bangladeshi garments industry. This garments sector has made women empowerment strong, create opportunity for employment and help to keep a positive impact on both rural and urban slum area economy. Again by creating the working opportunities, it has built a environment to increase purchasing ability. As a result, the role of women in decision making process of the family has been welcomed greatly.
The poverty has decreased at 1.7% per annum despite rising of population. Currently per capita income is USD 923 per annum and it rises to around USD 1024 per annum. Bangladesh will become a middle income country soon. Regarding this issue garments industry has played more important role than NGOs and Grameen Bank.
A survey of Centre for Break through Thinking in Bangladesh in January 2013 showed that as reason for decreasing the rate of poverty in rural area 41% people think its garment industry, 27% think its foreign inward remittance, 9% think it is the combined effort of NGOs and Grameen Bank, 5% think its innovative ability and 18% think of others.
The same survey again showed that garments sector plays 57% role in women empowerment while NGOs and Grameen Bank combinedly play 11% role. The government sector can`t do better to remove poverty as they have taken away their activities.
After the Savar Rana Plaza Tragedy Bangladesh became the headlines of many public media of several countries including the USA, England, Canada and Australia. After this tragic event, a mixed reaction is noticed among the retailer consumers. Most of the retailer customers said that if their countries don`t import the garments from Bangladesh, it would again turn into a poor country as it will hinder the progress of Bangladesh. Most of the retailer consumers asked to solve the matter with consideration. Again some of the foreign media published that as the foreign wholesaler paid a very small amount, so the Bangladeshi garment owners cannot take necessary steps to create a working favorable environment.
The USA provides the GSP facility for 4800 products of 129 countries. In garments sector there would not be any significant effect on GSP. MOODY`s already said that there can be negative impact on the credit rating in Bangladesh and the foreign investment can be reduced. But Bangladesh has tackled the situation after post MFA regime with great effectiveness and efficiency. The GSP facility for Bangladesh has not been a great scope in the garments business in the US. Because, the entry of Bangladeshi products into the US market has become more difficult than previous time.
The declaration of suspension of GSP is like a bad omen in the sky of Bangladesh. President Barak Obama said that The GSP facility provided to Bangladesh as a developing country should be suspended. In Bangladesh there are lots of supporters of Obama. They are hurt by his comment. Actually his comment is unfortunate for us. Because the initiatives which are taken by Government and the owners to develop the labor environment would now be counted under threat. It is the thought of US Council of Foreign Relation (CFR) that due to this suspension almost $2 million would be saved by the importers of the USA which imports cigarette, sport materials, cooking materials, plastic materials, ceramic materials and many others.
It is impossible to reach a same position for a developing country like the developed one in labor standards. If we consider the model of five forces of Michel Porter we will find that the cheap labor power is a bargaining power for Bangladesh. The success Bangladesh has earned gradually has encouraged everyone to develop the standard of life and it certainly affects the labor market positively. In fact, the foreign garment buyers always suffer from an illusion. They always change market for cheap labor. The routine investigation done by BGMEA is insufficient and they do not consider the interest of the laborers. That`s why BGMEA has prohibited only 20 factories till now. Instantly it is impossible to acquire international bench - mark for a developing country like Bangladesh. Besides, the industrial entrepreneurs and leaders of the laborers involved in garments sector are from 2nd and 3rd generations.
During this crucial moment of garments sector in Bangladesh, the Bangladeshi people have not found Dr. Md. Yunus productively rather than giving some advice. The equal labor standard of the USA he has claimed is not possible to achieve for Bangladesh in one single night. Yes, he is busy with his social business. The social business, social investment and capital are interlinked with one another. It is unfortunate that Dr. Yunus is behaving like a politician rather than an economist.
The senior research fellow of US council on foreign relations Edward Elden said that the USA collected $5 billion textile products from Bangladesh and earned $700 billion as tariff. According to him Bangladesh is capable to produce the product at a very little cost and in spite of highest tariff imposed by the USA it becomes successful. Actually when Bangladesh achieved the 2nd highest rank in producing garment products, the world competition is gradually rising.
To search for the defective buildings in Bangladesh we have to start our work from the grass root level. We can take the help of civil and structural engineering division of Bangladesh Army and department Civil Engineering of all public universities. Because the general investigators can not only lack proper knowledge but also may be involved in corruption.
But this suspension can stop the foreign consumers from buying the Bangladeshi products. If the role of European Union becomes negative, it can affect the Bangladeshi economy severely. But it is a matter of hope that the head of the European Union delegation William Hanna said that they would not stop or terminate the GSP facility. Rather they will help in labor safety in Bangladesh. They have decided to contact government, garments producers, and consumers to develop the working environment.
It is not a good thing to take away the benefits of a poor country. Because of this decision the poor laborers of that country will be the worst victims.
The current government has taken necessary steps to rectify the labor laws and the development of the environment of garments factories, the safety of laborers and the development of the working environment. But there is a particular class of dishonest businessmen who are always reluctant to the development of working environment. Because of them the real and honest entrepreneurs are always cheated.
The economic advisor, Dr. Mashiur Rahman said that government has taken necessary steps to increase the life standards of our laborers. The termination of GSP facility is a matter of sorrow for the economic development of a developing country like Bangladesh. As a result, at present the stability in the economy can be disturbed and the macroeconomic stabilization can also be harmed.
The government has to build up a diplomatic team with high officials, business leaders, human rights workers, professionals, economists, diplomats and labor leaders. They have to sit for a discussion with the USA and try to withdraw the suspension order. This discussion should be goal orientated.
According to the statistics of 2012, Bangladesh has exported $24 billion product where 21% was imported by the USA. In fact, due to this suspension although Bangladesh would not face any difficulties now, in the long run the export section can be harmed while exporting the other products in supplementary countries. We hope that the USA will withdraw their decision for keeping the economy of Bangladesh safe. We realize that in the development of Bangladesh economy there is a strong role of the USA and we hope that it will continue.
*The author is Vice Chancellor, Presidency University and Chairman, Centre for Breakthrough Thinking in Bangladesh Macro and Financial Economist. He can be reached at email@example.com. Website: cbttbd.atspace.cc/
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