Bangladesh earns the largest portion of its export income from readymade garments and knitwear. At first, Bangladesh exported the readymade cloths and knitwear worth $1 million to the USA through Riaz Garments in 1978. After that, the garments industry took over the position of a leading industry for our export income by whipping the traditional jute industry, which is illustrated by the following chart:
But, it is frightening news for our country that this leading industry is now passing through crucial moments. Recent continuing unrest situation in different garment factories creates the threats to it existence. Since one year, the workers of RMG in different industries have been creating violence in the form of processions, vandalism, blockading the road to hike their minimum wage, attendance bonus and to ensure other facilities. These are the common scenario of the garments factories of Savar, Mirpur, Rupganj, Joydebpur, Gazipur, Kaspur, Ashulia, Nishchintapur, Norashinghpur, Zamgara and in other garment factories.
In the last year, about 140 garments factories were closed due to unrest accompanied by the crisis of power and gas, price hike of yarn, poor infrastructure, and low price offers from international buyers amid increased production cost. These are the main reasons for the shutdown in the production of a factory.
Whatever the situation, the authority will have to find out the path of solution to recover the huge economic losses. Low wage is the key reason of labour's agitation. The present minimum wages paid by the garment factory to its labour is Taka 1662.50 per month while the workers are demanding Taka 5000 per month. The current minimum wage is really a tiny and insufficient amount against the current inflation both in food (7.85 %) and non-food (5.49 %) goods while general and average inflation are 6.89 % and 7.69 % respectively (2009-10,July-March,BBS).
The minimum wage tk.1662.50 was fixed on June 2006 when the cost of living was certainly lower than now. The Bangladesh Bank and the Bangladesh Institute of Development Studies, reported that since 2006 the cost of living of an RMG worker increased by at least 35 percent. But the Centre for Policy Dialogue, a private think-tank, reported that the average cost of living increased by around 70 percent because of increasing house rent, gas and power price.
Important to note is that the minimum wage of Bangladeshi garment workers (less than $25) is the lowest among the garment producing nations. At the entry point, a worker gets $90, $101 in Vietnam, $135 in India and $217 in china.
Moreover, garments workers are extremely poor, because they earn less than one dollar per day whereas the international poverty line income is $1.25. Alongside wages, they are also deprived from other benefits and facilities including bonus, insurance coverage, financial support for illness and good environments to work.
In this situation, to resolve wage problem, BGMEA proposed Tk 2000 per month as minimum wage for entry level workers against the proposal of Tk 6200 made by the representatives of garments workers to the Minimum Wage Board (MWB) who will announce the minimum wage by July 27, 2010.
Considering the importance of the sector, the authority should fix a minimum wage including other benefits to save our foreign exchange earning garments industry as well as about three million workers who are involved here.
Government should take initiatives to increase export income from jute, frozen foods, tea, agricultural product, leather, leather products, fertilizer, chemical products, ceramic products, handicrafts, toiletries, and ICT products as well as from emerging new export industries such as Medicine and shipbuilding industry. Hopefully, this will help the country earn balanced export income.
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