The weaknesses within the nation’s RMG sector have as soon as once more been laid naked in latest weeks, as employee’s protests over elevating the minimal wage underscored the struggles they face in assembly their fundamental wants as a result 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 crucial to take care of a good lifestyle. Furthermore, rising inflation has added to the monetary burdens confronting these staff.
Regardless of such hardships, garment producers have persistently asserted their incapacity to accommodate substantial wage hikes, citing challenges similar to energy and fuel shortages, fluctuations in trade charges, and lowered demand from key export markets.
Moreover, as Bangladesh prepares for LDC (Least Developed Nation) commencement in 2026 and faces competitors from international locations 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 retaining wages down through the years.
In line with economist Dr Akhtar Mahmood, former Lead Non-public Sector Specialist at World Financial institution Group, the RMG sector will be unable to maintain its present low-wage mannequin for lengthy with out transitioning to a extra refined, 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 will be unable to maintain the construction within the subsequent ten years. We don’t want such a low wage construction precisely as a result of it won’t maintain sooner or later,” Dr Mahmood mentioned in a lately printed article in The Enterprise Normal.
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 shouldn’t be 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 recent 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 at the moment 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 likewise the director of Envoy Design Ltd., contended that the wages supplied to garment staff in Bangladesh should not low however moderately aggressive.
She primarily based this assertion on components similar to per-worker productiveness, precise worth addition, and a comparative evaluation of the price of residing within the international locations into consideration. “We’ve a vibrant and younger inhabitants. So we now have a transparent benefit of a aggressive labour drive,” Oishee mentioned.
She emphasised the need of diversifying merchandise by means of each horizontal and vertical enlargement, significantly transferring from fundamental objects like T-shirts to extra superior clothes, to maintain aggressive wages. She careworn the significance of automation, abilities improvement, and innovation in reaching 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 should result in some form of shifting tariff construction.”
She highlighted the significance of double transformation within the EU market, the place 60% of Bangladesh’s exports undergo two levels, from yarn to material after which from material 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 might not be a problem,” she added.
In the meantime, in keeping with Mohiuddin Rubel, one other director of BGMEA and likewise the extra managing director of Denim Professional, the employees’ wage is regularly rising 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 abilities and training, making ready for the numerous modifications anticipated within the sector as new applied sciences proceed to emerge.
Referring to China for example, Rubel remarked, “as soon as they too used to 100% depend on guide labour. Nevertheless, with time, they honed their abilities, resulting in the emergence of recent industries and job alternatives, propelling their sector ahead. The same 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 result 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 improvement in automation.
Rubel additionally agreed that there’s nonetheless appreciable progress to be made so far as automation is anxious. Nevertheless, he emphasised that modifications are on the horizon, as garment producers are starting to recognise that failure to undertake automation promptly could lead to dropping 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 likewise the managing director of Staff Group, mentioned that though full automation shouldn’t be but doable, Bangladesh’s RMG sector has seen a metamorphosis in direction of semi-automatic processes.
He went on to elucidate that material inspection, rolling, and reducing are extensively automated, but the guide numbering of lower material continues. Equally, though the stitching course of has partially shifted to semi-automatic strategies for element creation, human labour stays important for meeting, alongside the mixing of superior stitching machines and productivity-measuring IoT units 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 regularly shifting to semi-automation, and the packaging course of stays completely guide.
“There isn’t a different to coaching to reinforce the productiveness of staff. It is not 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 material optimisation to waterless dyeing and Ozone wash applied sciences.
The adoption of superior applied sciences, similar to 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 total context of Bangladesh, they will not be 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 international locations. significantly, China, Vietnam, Indonesia. The situation of Vietnam is completely different, as a result of Vietnam is straight adopting Chinese language applied sciences and automation with the help of China. Due to this, Vietnam has taken a distinct place, which is why their effectivity is way larger,” she reasoned.
It’s price 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 by way of 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 international locations.” She famous varied components contributing to this, together with low employee productiveness, a niche in abilities, and reliance on typical manufacturing processes moderately than systematic and scientific approaches.
In line with her, lately, significantly within the final decade, many transformations have taken place on this space. Each manufacturing facility has its industrial engineering staff. They research the movement time effectivity, productiveness and every little thing, and so they stability every little thing accordingly by modernising the manufacturing facility structure and adopting completely 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. Nevertheless, once we speak about staff’ productiveness, there are loads of components related to this.
“Like using know-how, administration programs. In relation to using know-how, then clearly it is vitally 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 recent applied sciences,” she defined.
Nevertheless, A F M Towhidul Alam, director of Silken Stitching Ltd, attributed this low fee 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 international locations.
“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 shouldn’t be 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 different to Bangladesh anytime quickly. Our consumers have sought options for lower-priced merchandise prior to now, however ultimately, they’ve all the time returned to us. Subsequently, I do not assume 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 well-liked to stay nameless, additionally acknowledged the troubling challenge of low productiveness. Nevertheless, he expressed his perception that the employees’ abilities should not missing.
In line with him, one of many main 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 difficulty of inefficiency on the administration degree inside our factories,” the director supplemented.
It’s estimated that the effectivity of most garment factories could possibly be a lot larger than the typical 40%-45% in Bangladesh, in comparison with world benchmarks of 75%-85%, with crucial interventions.