The weaknesses within the nation’s RMG sector have as soon as once more been laid naked in latest weeks, as staff’ protests over elevating the minimal wage underscored the struggles they face in assembly their fundamental wants as a consequence of their current low wages.
The authorities have since agreed to lift the minimal wage for garment staff by 56.25%, from Tk8,000 to Tk12,500, with an annual 5% increment, however not earlier than the loss of life of a number of protesting staff.
Many staff nonetheless proceed to demand the minimal wage be set between Tk20,000 to Tk25,000, on condition that their present earnings quantity to lower than half of what’s mandatory to take care of a decent way of life. Furthermore, rising inflation has added to the monetary burdens confronting these staff.
Regardless of such hardships, garment producers have constantly asserted their lack of ability to accommodate substantial wage hikes, citing challenges resembling energy and gasoline shortages, fluctuations in trade charges, and diminished demand from key export markets.
Moreover, as Bangladesh prepares for LDC (Least Developed Nation) commencement in 2026 and faces competitors from nations like Vietnam and rising African nations providing even decrease wages, it turns into essential to search out methods to stay aggressive for the RMG trade, which has been constructed on a mannequin of gaining aggressive benefit by forcefully conserving wages down through the years.
In keeping with economist Dr Akhtar Mahmood, former Lead Non-public Sector Specialist at World Financial institution Group, the RMG sector won’t be able to maintain its present low-wage mannequin for lengthy with out transitioning to a extra subtle, developed, highly-productive trade.
“Low wage construction helps to maintain our trade now. However do we would like that? The employees are in ache, and it’s affecting their productiveness. We won’t be able to maintain the construction within the subsequent ten years. We don’t need such a low wage construction precisely as a result of it won’t maintain sooner or later,” Dr Mahmood mentioned in a not too long ago revealed article in The Enterprise Customary.
As we reached out to a number of garment producers to delve deeper into the matter, they made the daring declare that the nation’s RMG sector is just not solely reliant on the low-wage mannequin, however makes an attempt are being taken to extend productiveness with the assistance of educated, expert staff, mixed with the embracing of contemporary applied sciences.
Consequently, these garment producers keep an optimistic outlook, affirming that Bangladesh is poised to retain its standing within the world RMG market, however competitors from rival nations.
To start with, most garment producers dispute the concept Bangladesh’s RMG sector presently operates on a low-wage mannequin within the first place.
Barrister Shehrin Salam Oishee, a director of Bangladesh Garment Producers and Exporters Affiliation (BGMEA) and in addition the director of Envoy Design Ltd., contended that the wages supplied to garment staff in Bangladesh are usually not low however fairly aggressive.
She primarily based this assertion on elements resembling per-worker productiveness, precise worth addition, and a comparative evaluation of the price of dwelling within the nations into account. “We now have a vibrant and younger inhabitants. So we have now a transparent benefit of a aggressive labour power,” Oishee mentioned.
She emphasised the need of diversifying merchandise by way of each horizontal and vertical growth, notably shifting from fundamental gadgets like T-shirts to extra superior clothes, to maintain aggressive wages. She burdened the significance of automation, expertise growth, and innovation in attaining this strategic imaginative and prescient for Bangladesh and sustaining competitiveness within the world market.
That mentioned, she acknowledged that “LDC commencement will definitely have some influence on our commerce, as it’s going to result in some kind of shifting tariff construction.”
She highlighted the significance of double transformation within the EU market, the place 60% of Bangladesh’s exports undergo two phases, from yarn to cloth after which from cloth to garment. Therefore, she known as for the necessity for investing in backward linkage to take care of competitiveness within the EU market and navigate potential challenges in different markets if tariffs enhance.
“However then once more, the dialogue we’re having proper now, if we are able to enhance our effectivity and productiveness, it could not be a problem,” she added.
In the meantime, in line with Mohiuddin Rubel, one other director of BGMEA and in addition the extra managing director of Denim Professional, the employees’ wage is steadily growing within the nation and it’ll additional enhance sooner or later.
Furthermore, like their counterparts in different developed nations, Bangladeshi staff are more and more buying superior expertise and schooling, making ready for the numerous adjustments anticipated within the sector as new applied sciences proceed to emerge.
Referring to China for instance, Rubel remarked, “as soon as they too used to 100% depend on guide labour. Nonetheless, with time, they honed their expertise, resulting in the emergence of recent industries and job alternatives, propelling their sector ahead. An identical trajectory is anticipated for Bangladesh.”
There may be additionally a notion that Bangladesh would possibly lose its aggressive fringe of low-wage staff as a consequence of automation. At the moment, lower than 15% of all operations within the RMG sector are mechanised. We’re nonetheless not adapting quick sufficient to the fast growth in automation.
Rubel additionally agreed that there’s nonetheless appreciable progress to be made so far as automation is worried. Nonetheless, he emphasised that adjustments are on the horizon, as garment producers are starting to recognise that failure to undertake automation promptly might lead to shedding floor to their rivals.
“Whereas it is true that we’re trailing behind a number of developed nations, we’re making regular progress,” he mentioned.
Abdullah Hil Rakib, one other director of BGMEA and in addition the managing director of Group Group, mentioned that though full automation is just not but potential, Bangladesh’s RMG sector has seen a metamorphosis in the direction of semi-automatic processes.
He went on to clarify that cloth inspection, rolling, and reducing are extensively automated, but the guide numbering of lower cloth continues. Equally, though the stitching course of has partially shifted to semi-automatic strategies for part creation, human labour stays important for meeting, alongside the combination of superior stitching machines and productivity-measuring IoT gadgets like “Nidle.”
He additionally knowledgeable that high quality inspection stays completely guide as a result of limitations of AI know-how, whereas ironing and urgent are steadily shifting to semi-automation, and the packaging course of stays completely guide.
“There isn’t a various to coaching to boost the productiveness of staff. It isn’t solely about offering them with the abilities of their course of, it is also about sincerity, motivation, office security, staff’ wellbeing, psychological well being and so many different non-production issues,” Rakib mentioned.
In the meantime, Oishee additionally reckoned that factories within the Bangladeshi garment trade are present process important technological transformations, with automation and multiskilling of staff turning into prevalent, from autocad and cloth optimisation to waterless dyeing and Ozone wash applied sciences.
The adoption of superior applied sciences, resembling ERP (enterprise useful resource planning) for provide chain administration and digital fee of wages, signifies a shift towards extra environment friendly and digitally managed manufacturing facility operations, disrupting conventional manufacturing practices.
Nonetheless, she conceded that when contemplating all these developments within the general context of Bangladesh, they is probably not notably important. These trendy applied sciences and developments are deemed inadequate within the broader perspective of the nation.
“On common, Bangladesh is lagging behind many different nations. notably, China, Vietnam, Indonesia. The state of affairs of Vietnam is totally different, as a result of Vietnam is instantly adopting Chinese language applied sciences and automation with the help of China. Due to this, Vietnam has taken a unique place, which is why their effectivity is way increased,” she reasoned.
It’s value noting that within the context of productiveness, Bangladesh’s hourly productiveness within the RMG sector is considerably decrease than that of its counterparts, because the Asian Productiveness Group (APO) Database (2018) revealed that Bangladesh’s hourly productiveness stands at $3.4.
On the flipside, main exporter China’s productiveness is recorded at $11.1, whereas Vietnam’s productiveness is $4.7, Sri Lanka’s is $15.9, Indonesia’s is $12.3, and India’s is $7.5. Regardless of being the second-largest garment exporter, Bangladesh trails behind its Asian counterparts when it comes to attire labour productiveness per hour, aside from Cambodia.
Oishee agreed that “the productiveness in Bangladesh has been traditionally low in comparison with the opposite main supplying nations.” She famous numerous elements contributing to this, together with low employee productiveness, a niche in expertise, and reliance on standard manufacturing processes fairly than systematic and scientific approaches.
In keeping with her, in recent times, notably within the final decade, many transformations have taken place on this space. Each manufacturing facility has its industrial engineering workforce. They research the movement time effectivity, productiveness and every part, they usually steadiness every part accordingly by modernising the manufacturing facility format and adopting totally different processes, like stock management, Simply-in-Time (JIT) and so forth.
“As well as, many factories are implementing instruments like linen manufacturing, six sigma, and so forth. Nonetheless, once we speak about staff’ productiveness, there are loads of elements related to this.
“Like the usage of know-how, administration programs. With regards to the usage of know-how, then clearly it is rather troublesome to attract a normal image of the entire trade as a result of we do not have superior producers who advance the state of contemporary applied sciences,” she defined.
Nonetheless, A F M Towhidul Alam, director of Silken Stitching Ltd, attributed this low charge of our staff’ productiveness to the federal government’s strict guidelines and rules, along with the superior high quality of merchandise manufactured in Bangladesh in comparison with these from different nations.
“After visiting quite a few factories in China, Vietnam, and India, it’s evident that our product high quality surpasses theirs,” he mentioned, additional noting that upholding such excessive requirements compels Bangladeshi clothes to take care of cost-effectiveness, whereas it additionally impacts productiveness charges.
Moreover, he claimed that even after Bangladesh’s commencement from LDC standing, the RMG sector is just not anticipated to come across fast dangers to its present place, given its robust status and continuous introduction of recent merchandise and improvements.
“Given our present standing, there will not be any higher various to Bangladesh anytime quickly. Our consumers have sought alternate options for lower-priced merchandise previously, however ultimately, they’ve at all times returned to us. Due to this fact, I do not suppose there must be any query on the potential of our sustainability,” he added.
The director of one other main garment firm in Bangladesh, who most popular to stay nameless, additionally acknowledged the troubling problem of low productiveness. Nonetheless, he expressed his perception that the employees’ expertise are usually not missing.
In keeping with him, one of many major causes of our low productiveness is visitors congestion. The typical journey time for staff from dwelling to the manufacturing facility and again, about two hours every method, considerably impacts their effectivity and limits their productiveness.
“Moreover, there’s additionally a problem of inefficiency on the administration degree inside our factories,” the director supplemented.
It’s estimated that the effectivity of most garment factories might be a lot increased than the common 40%-45% in Bangladesh, in comparison with world benchmarks of 75%-85%, with mandatory interventions.