How important is the garment industry in Bangladesh?

The garment industry has played a critical role in promoting the economic development of Bangladesh, a nation of 165 million people and one of the poorest countries in Asia. At the beginning of the new century, Bangladesh’s per capita income was only $420; by 2017, it had risen to $1,517. An estimated 3.6 million workers—most of them women—toil in 5,000 factories there. Apparel accounts for 81 percent of the country’s exports and 12 percent of its GDP. Bangladesh is now the world’s second largest exporter of apparel, after China. Because wage rates in China are rapidly rising (see Chapter 8 ’s closing case, “What is Next for Chinese Manufacturing?”), prospects for continued growth in Bangladesh’s textile industry look promising.
However, there is a dark side to this rosy growth. Wages are low: the minimum wage in Bangladesh is $68 a month, compared to $280 a month in China. The rapid growth of the industry has masked deficiencies in government oversight of the industry’s infrastructure and firms’
inattention to promoting safe working conditions and protecting workers’
rights. While many stakeholders did their best to ignore these issues, such was no longer possible after the Rana Plaza catastrophe. The aftermath of Rana Plaza had led to increased demands that corporations take more responsibility in supervising the safety and working conditions of workers throughout their supply chains.
On April 23, 2013, cracks were discovered in the walls of Rana Plaza, an eight-story edifice in a suburb of Dhaka, the capital of Bangladesh. A consulting engineer met with the building’s owner, Sohel Rana, and advised that the building be declared unsafe and all occupants evacuated.
Later that day, Rana and a local government official met; the official agreed that the building could remain open pending a more thorough inspection. However, the manager of the bank branch and the owners of shops on the lower two floors chose to follow the advice of the consulting engineer and shuttered their doors. The five garment factories that operated in the higher floors of the building, which produced apparel for well-known Western brands like Spain’s Mango, Britain’s Primark, Italy’s Benetton, America’s Walmart, and Belgium’s C&A, continued their daily operations and told their workers they could lose their jobs if they failed to report for work the next day. The next morning, April 24, the electricity to the building went out. In response, emergency generators kicked on, allowing the work to continue. Unfortunately, the vibrations produced by the generators caused the structure to collapse, killing 1,134 workers and injuring another 2,500 in the world’s worst industrial accident since the Bhopal catastrophe in 1984.