Bangladesh garment factories disrupted as protests continue for third day

On Monday, Bangladesh's garment factories resumed operations following widespread closures and disruptions the previous day, yet industry leaders remain apprehensive about potential further unrest stemming from workers' demands for higher wages. The ready-made garment sector constitutes more than 80% of Bangladesh's export earnings, employs around 4 million workers, and contributes to approximately 10% of the country's GDP.

The recent unrest disrupted activities in critical manufacturing centers, instilling doubts about export shipments and buyer confidence in Bangladesh, recognized as the world's second-largest apparel exporter after China. Workers are requesting a minimum monthly wage of 30,000 taka ($243), up from the current 12,500 taka, reflecting heightened concerns over rising living costs and persistent inflation.

Despite the government's establishment of a six-member minimum wage board on Sunday to evaluate the wage request, the move did not promptly alleviate the unrest. Protesters had erected road blockades in several industrial districts on Sunday, with police in Dhaka employing tear gas and water cannons to disperse demonstrators.

Babul Akhter, general secretary of the Bangladesh Garment and Industrial Workers Federation and a workers' representative on the wage board, noted that Bangladesh lagged behind in garment wages globally. He emphasized that if factory owners could not pay workers adequately, they should strive for higher prices from international buyers. "They cannot run a business on the backs of underpaid workers," he stated.

Factory owners cited increased expenses, energy market volatility due to Middle East conflicts, and declining demand in essential export markets as challenges facing the industry. The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) reported that demonstrations across multiple cities disrupted operations at 529 factories, impacting nearly 1 million workers.

BGMEA President Mahmud Hasan Khan expressed hope that workers would permit the review process to advance after the government formed the wage board. However, if protests continued into the following day, he warned that the industry might resort to the 'no work, no pay' provision. Industry representatives were scheduled to meet the home minister to discuss the ongoing unrest.

Selim Raihan, an economics professor at the University of Dhaka, acknowledged the workers' demands as reasonable, given the high inflation and suppressed wages, which could provoke more unrest. Nonetheless, he cautioned that a sizable wage increase might escalate production costs, diminish exporters' profit margins, and weaken Bangladesh's price competitiveness.

Raihan argued that a gradual wage adjustment, enhanced productivity, and fairer pricing from international buyers were crucial to harmonizing workers' welfare with industrial sustainability.