Last month a terror strike at the Holey Artisan Cafe in Dhaka, Bangladesh, left 21 people dead, along with two police officers and four terrorists. Among them were nine Italians, seven Japanese, one Indian, three Bangladeshi's and one US citizen.
More than half the number of victims were closely linked to an industry that is critical to the country's economy: Textiles.
What has been the impact of this terror attack on Bangladesh's textile sector?
The textile sector constitutes around 80% of Bangladesh’s total exports providing direct employment to 4 million people. This $19 billion-a-year, export-oriented ready-made garment (RMG) industry accounted for 45% of all industrial employment in the country, and yet, only contributed 5% of the Bangladesh's total national income.
Over the past few years, Bangladesh had surpassed India in the export of RMGs - thanks to cheaper labour, better support from the government and a favourable global trade-quota system. In India around 12 percent of exports are from the textile sector and it employs more than 38 million people. Since there are nearly 10x more people in India dependant on the textile sector any change in trends was bound to have a cross-border impact.
This point hit home when I ran into a neighbour who works with an RMG export firm. He was unusually upbeat. "Things are now looking up", he said, grinning happily, "Our industry is not getting the attention it deserves!" INR 6,000 had been allocated in the latest Budget for financial incentives, along with a move towards flexible labour laws. "Now, with the Europeans and Americans getting wary about Bangladesh, we sure to bounce back!"
It seems the global textile-RMG market is not very different from the local subzi-mandi's (vegetable markets). Frequent meetings and the perception of safety, and the assurance of having a glass of chai in peace and quiet, are all confidence builders for both buyers and sellers...
LINKS & REFERENCES
- Dhaka - The Attack Victims (CNN - 6 July 2016) - http://edition.cnn.com/2016/07/02/asia/bangladesh-dhaka-attack-victims/
- ET, 23 Jun., 2016) - http://economictimes.indiatimes.com/news/economy/finance/cabinet-clears-rs-6000crore-package-for-textile-sector/articleshow/52876601.cms
- (IBT 23 June 2016) - http://www.ibtimes.co.in/cotton-production-holds-key-textile-policys-multi-billion-dollar-export-push-684011#6FoGIRr5mbh5L9mf.97