Globalization, in its modern form, came to Bangladesh in the 1980s with the expansions of the garment industry. Reaz and Jewel Garments, the first garment-exporting firm, was established in 1977, at a time when Bangladesh’s total export comprised of about 6.3 percent of its GDP (Ahmed et al., 2014; Rashind, 2006). In the 1980s, the South Korean firm Daewoo played an important role in the industry’s takeoff when it partnered with Desh Garments. Since the end of the MFA in 2005, clothing exports have grown at an average annual rate of 25 percent. In 2010, garments accounted for about 82 percent of the country’s total exports (Ahmed et al., 2014). Today, Bangladesh is the world 's second largest exporter of garments. The first gradual and then
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Since the 1980s, the military regimes and the alternating governments adopted largely ‘trade-friendly’ policies, including bonded warehouses and back-to-back letters of credit financing (Rahman, 2014). In addition, to attract foreign investment, especially from East Asian countries, the government set up Export Processing Zones (EPZ), where regulations were much more lax. The first EPZ was established in 1983 under Ershad’s rule (Al Faruque, 2009). The EPZ approach also led to considerable decentralization of responsibilities surrounding the sector as the state delegated much of its responsibility to business associations like the Bangladesh Garment Manufacturers and Employers Association (BGMEA) and the Bangladesh Knitwear Manufacturers and Employers Association (BKMEA). The presence of state patronage also played a key role in accelerating the growth of the industry. Close links between the government and the business community meant that the industry was barely, if at all, regulated. In addition, a large number of garment business owners are involved in the parliament and some factory owners are also members of the parliament. Political factions are known to actively court the powerful lobby of manufacturers, who then provide political and economic support in return (Ahmed et al., …show more content…
These changes have often come in the face of labor unrest, international criticisms or industrial tragedies. With greater liberal policies and the country’s return to democracy, the garment industry started to grow exponentially in the 1990s and began to gain international attention. The first minimum wage for garment workers was set in 1994, when the sector. The next raise minimum wage was in 2006 following the first large-scale labor unrest in the sector after the owners refused to acknowledge and adopt the new minimum wages set by the government in 1997 and 2001. In response to the violent unrest in the sector, the government made several amendments to the existing labor laws and enacted the Bangladesh Labour Act of 2006. Legislative changes included increased union activity and allowing worker committees in EPZs. The Act was next updated in response to the Rana Plaza tragedy in 2013. The Bangladesh Labour Act 2013 included changes in union registration, required worker welfare funds and increased attention to occupational safety and health. Although the 2013 Act made some crucial changes, it had several shortcomings. The 2013 Labour Act is discussed in more details when examining the stakeholder responses to Rana
Since the 1980s, the military regimes and the alternating governments adopted largely ‘trade-friendly’ policies, including bonded warehouses and back-to-back letters of credit financing (Rahman, 2014). In addition, to attract foreign investment, especially from East Asian countries, the government set up Export Processing Zones (EPZ), where regulations were much more lax. The first EPZ was established in 1983 under Ershad’s rule (Al Faruque, 2009). The EPZ approach also led to considerable decentralization of responsibilities surrounding the sector as the state delegated much of its responsibility to business associations like the Bangladesh Garment Manufacturers and Employers Association (BGMEA) and the Bangladesh Knitwear Manufacturers and Employers Association (BKMEA). The presence of state patronage also played a key role in accelerating the growth of the industry. Close links between the government and the business community meant that the industry was barely, if at all, regulated. In addition, a large number of garment business owners are involved in the parliament and some factory owners are also members of the parliament. Political factions are known to actively court the powerful lobby of manufacturers, who then provide political and economic support in return (Ahmed et al., …show more content…
These changes have often come in the face of labor unrest, international criticisms or industrial tragedies. With greater liberal policies and the country’s return to democracy, the garment industry started to grow exponentially in the 1990s and began to gain international attention. The first minimum wage for garment workers was set in 1994, when the sector. The next raise minimum wage was in 2006 following the first large-scale labor unrest in the sector after the owners refused to acknowledge and adopt the new minimum wages set by the government in 1997 and 2001. In response to the violent unrest in the sector, the government made several amendments to the existing labor laws and enacted the Bangladesh Labour Act of 2006. Legislative changes included increased union activity and allowing worker committees in EPZs. The Act was next updated in response to the Rana Plaza tragedy in 2013. The Bangladesh Labour Act 2013 included changes in union registration, required worker welfare funds and increased attention to occupational safety and health. Although the 2013 Act made some crucial changes, it had several shortcomings. The 2013 Labour Act is discussed in more details when examining the stakeholder responses to Rana