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www.wmfd.com - More than 600 bodies have been recovered from the rubble of a building that collapsed in Bangladesh nearly two weeks ago and most of the victims worked at a garment export factory there. }}" />

   
 
 
Bangladesh Garment Export Industry Under Scrutiny

Story By: Larry Stine

 

 

 
 
 
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  Original Published: 5/12/2013 More than 600 bodies have been recovered from the rubble of a building that collapsed in Bangladesh nearly two weeks ago. Most of the victims worked at a garment export factory there. Government officials say substandard building materials, combined with the vibration of heavy machinery, led to the collapse. CNN's Jim Boulden takes a look at the garment export industry in Bangladesh. The garment industry found a natural home in poorer nations. The way to provide an abundance of cheap, ready-made clothing, is finding a huge labor pool, that is paid little. Bangladesh is now the second largest apparel exporter after China. How? Unlike some of its competitors, Bangladeshi manufacturing remains dirt cheap, and unions have limited power. The country cornered the absolute bottom of the value chain. "What's happened in Bangladesh is that they have been too successful as that this low road model of development, where they have offered low wage labor, and under invested in their own infrastructure and under invested in government regulations and government enforcement of laws," says Judy Gearhart of the International Labor Rights Forum. And while contracts poured in from the likes of Primark, Walmart, Carrefour, Gap and Disney, buildings went up fast, filled with workers, sometimes housed on illegally built floors, but wages remained low. "You have scale, you have expertise, you have an ecosystem in that industry which has built up around Bangladesh, so even if you have wages rise to say double triple, from 40 dollars a month to 80 or 120 dollars a month you would still have a thriving garment industry in Bangladesh," Nirmalya Kumar, of the London Business School. Bangladesh also benefits from the European Union giving the country extra help. Because it's so poor, Europe allows Bangladesh to ship garments to the world's biggest trading block, duty free. A sweetener the European Union says it might now suspend. A penalty for the country not cleaning up its garment industry. On the other hand, the United States still imposes duties on clothes from Bangladesh. The government says if the United States eliminated that tariff, costing as much as 32 cents on the dollar value of each garment, workers would benefit. "If this 32 cents was not an impediment, we would be able to offer the American middle class a lower price, its possible for us to have a bigger margin, and its possible for us to transfer the biggest chunk of this to better terms of employment," says Bangladesh High Commissioner Mohamed Quayes. The big brands may not wait for trade sanctions. Disney pulled out before the latest building collapse, but after a fire last year, that and political disruptions, have made some western firms to look toward higher cost India. "We would not want to see the brands departing. I mean they've benefited from the profit margins, now is not the time to walk away from the mess," says Gearhart. But more could follow. "A couple more of these incidents and the foreign brands will run. They cannot afford to take the kind of brand image beating that they are taking right now," says Kumar. But then, who would force Bangladesh to change? And keep scenes like this from happeing again?
   
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