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Can the EU visit tip the scales for workers’ dignity?
The forthcoming visit by the European Union (EU) delegation to Bangladesh comes at a critical juncture. Bangladesh’s labour sector is the backbone of its economy and the litmus test for the nation’s adherence to international labour standards. The delegation’s mission to evaluate the National Action Plan’s implementation has coincided with a period marked by considerable labour unrest and the government’s recent announcement of a new minimum wage of Tk 12,500 for garment workers. Many labour unions have rejected this proposal, saying that the government’s proposed amount is far from adequate. Given the circumstances, the EU visit holds the potential to exert significant influence on the country’s economic and labour landscape, especially considering the upcoming national election and the need for social stability.
The proposed minimum wage of Tk 12,500, though a step up from the previous Tk 8,000, has sparked widespread dissent among RMG workers. It’s a figure that appears increasingly incompatible with living a dignified life amidst rampant inflation, which currently stands at a staggering 9.63 percent.
According to research by the South Asian Network on Economic Modeling (Sanem), the wage needed to sustain in Bangladesh ranges from Tk 19,200 to Tk 26,000, depending on the area. Given the revised wage of 12,500, there is still a serious gap. Workers, unions, and labour rights organisations suggest a wage closer to Tk 23,000, a figure informed by comprehensive living cost studies.
The EU’s visit is thus pivotal, not merely for its potential to review labour conditions but also for its implicit pressure on the Bangladeshi government to align its labour laws with international norms. The EU’s influence is profound, given Bangladesh’s impending shift from the Everything but Arms (EBA) initiative to the Generalised Scheme of Preferences Plus (GSP+), which requires adherence to 27 international conventions on human rights, labour rights, the environment, and good governance.
The timing of the visit, amidst labour unrest and pre-election volatility, is particularly significant. It reflects the EU’s understanding that economic growth and labour rights are not mutually exclusive, but rather mutually reinforcing. The delegation’s findings will likely resonate beyond the borders of Bangladesh, shaping international perceptions and potentially impacting trade relations. For the EU, which is committed to ethical trade, the treatment of workers and their living conditions are integral to trade negotiations.
The garment industry is an essential pillar of Bangladesh’s economy, contributing significantly to our GDP and employment. The EU is a critical trading partner, and its trade policies hugely impact Bangladesh’s export-oriented growth. The delegation’s assessment might influence the EU’s future trade preferences, which could either bolster Bangladesh’s economy or place new strains on it, depending on the outcome.
Moreover, the new minimum wage’s failure to align with the cost of living and inflation rates may perpetuate a cycle of poverty among workers, undermining efforts to achieve sustainable economic growth. Low wages contribute to low purchasing power, which hinders domestic demand and, by extension, the growth of other economic sectors. The unrest arising from the wage dispute could lead to instability, which is detrimental to investment and the country’s overall financial health, particularly as it seeks to attract foreign direct investment in a post-EBA era. Bangladesh has been a WTO member since 1995 and, as a least developed country (LDC), it benefits from the EBA arrangement, which grants duty-free, quota-free access for all exports except arms and ammunition. However, the fact that Bangladesh will graduate from the LDC category in 2026 makes GSP+ even more important.
The labour-related implications are equally significant. The EU’s assessment could catalyse improvements in labour conditions, prompt more frequent and fairer wage revisions, and strengthen labour rights in Bangladesh. This might lead to a more motivated workforce, reduced turnover, and better productivity, which are critical for the long-term viability of the garment sector. There is no denying the fact that the RMG sector is a significant part of the economic growth and journey of development that we have enjoyed in the past decade and more. On the other hand, if the EU finds our labour situation unsatisfactory, it could lead to sanctions or a loss of trade privileges, which would have severe consequences for workers and the economy.
As the nation prepares for our national election, international and domestic audiences will closely watch the government’s response to the EU delegation’s findings. The decisions made now will determine whether Bangladesh can balance its economic ambitions with its social and moral obligations, and ensure that its progress includes all strata of society, particularly its most vulnerable population. All we can do is hope our government bodies and business leaders acknowledge that developing by itself is no development at all; true progress is inclusive and considers the well-being of every individual in the community.
Quazi Tafsirul Islam
is senior lecturer of Strategy, Management & HR at the Department of Management of North South University.