JBS Vol 11. Num 2. 2009 - Bangladesh’s Ready-Made Garments Sector: Exports, Employment, and Working Conditions

This paper examines the recent evidence on Bangladesh’s ready-made garment exports and working conditions in
the context of trade liberalization since the end of 2004 and the global economic crisis of 2008-2009. Analysis of
detailed export data shows that through early 2009, Bangladesh has managed to expand its garment exports and
international market shares largely through the country’s volume-driven, low-price export niche in the global market.
While this export performance, second to only China, appears to have maintained employment levels, the increasing
pressure on unit prices is likely to strengthen supplier resistance to improving wages and working conditions.
Evaluation of the recent record of working conditions indicates persistent problems that are associated with
Bangladesh’s export niche and underscores the urgent need to move to a higher productivity export structure that
would enable higher wages, improvements in working conditions, and overall gains in well-being. Implementation
of a complementary set of domestic policies to diversify the structure of production (such as productivity-enhancing
industrial policy, and investment in infrastructure and education) would enhance Bangladesh’s export
competitiveness and move the economy away from overdependence on exports. These domestic policies must be
enabled and strengthened by reforms to the international governance of trade and investment so as to promote
exports, employment, and decent working conditions in low-income countries. Chief among these reforms are a
revitalized GSP scheme that rewards improvements in working conditions with market access, and rules that prevent
investor or buyer mobility in the face of higher labor costs.