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IMF wants improved labour condition in RMG sector

Admin — Fri, 31 May 2013 05:37:27 +0000

Releases $136.6 million under ECF
The International Monetary Fund on Thursday asked the government to ensure better work environment in the readymade garment sector.
The IMF, while releasing $136.6 million loan, the third tranche under the Extended Credit Facility deal, said, ‘continued improvement in labour conditions in the garment sector, in coordination with international business and development partners, would be welcomed.’
Bangladesh, second largest garment exporting nation, is under pressure from buyers across the globe after the collapse of a multi-storey building that housed five garment factories and death of more than 1,100 workers. In November last year 112 garment workers were killed in a fire at the Tazreen Fashions.
Bangladesh would receive $409.7 million with the latest release that was decided by the IMF executive board under the chair of its deputy managing director Naoyuki Shinohara, said an IMF statement.
It said that continuation of policies is necessary during the pre-election period in order to keep the fiscal policy on track and speed up tax collection.
The board viewed that Bangladesh’s programme under the ECF was broadly on track.
Macroeconomic pressures have eased, with reserves rising and underlying inflation moderating, supported by restrained fiscal and monetary policies, it said, adding that growth was slowing and could weaken further given downside risks.
It will be important to maintain sound policy anchors and keep up the reform momentum, the IMF noted.
‘Structural reforms have also moved forward. Timely implementation of the new value added tax will help increase revenues and modernise the tax regime. Timely passage of the banking law amendments recently introduced in parliament will strengthen financial sector governance and keep risks in check, especially those arising from state-owned banks,’ it said.

-With New Age input

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US may strip Bangladesh of tariff breaks

Admin — Sat, 18 May 2013 04:58:51 +0000

The Obama administration may strip Bangladesh of import breaks following deadly accidents in the country’s textile industry, another sign of the pressure building on the southeast Asian nation to improve labour conditions, according to a report of the Washington Post.
The move was prompted partly by a fire late last year that killed 112 people and gained momentum after the recent factory collapse that claimed more than 1,100 lives.
Business, labour and advocacy groups are all struggling over how to respond to the April 24 incident — the worst-ever in the textile industry but an event that could produce meaningful change in a nation on its way to becoming the world’s largest garment exporter.
A group of mostly European nations has signed on to a binding inspection program. US firms such as Walmart have declined, but political backlash may be building. On Thursday, a group of senators wrote to major US retailers urging them to reconsider, and the Obama administration is also debating how to get American firms more constructively engaged.
Such agencies as the Department of Labour and the Office of the US Trade Representative, meanwhile, are stepping up their efforts. Labour officials have agreed to fund a programme to improve the Bangladeshi government’s currently weak — and some say corruption-ridden — factory inspection system. USTR, meanwhile, is moving forward with plans to exclude Bangladesh from import tax breaks given to goods from developing countries.
US officials said the decision was made last fall to begin pressuring Bangladesh for improvement in its labour conditions, and the process intensified after the recent incidents.
Requests by labour groups to exclude Bangladesh from tariff breaks have been pending for several years, but USTR said in documents published in the federal register that ‘the lack of progress by the government of Bangladesh in addressing worker rights issues .?.?. warrants consideration of possible withdrawal’ of benefits.
That has gotten the government’s attention. A delegation of top Bangladeshi officials is in Washington this week lobbying to retain the tariff breaks and to convince US leaders in USTR, Labour and the State Department that they are serious about overhauling local labour laws, prosecuting crimes against labour leaders and making other long-sought changes.
The November fire and last month’s collapse of the Rana Plaza textile centre brought into sharp relief one of the core moral questions of globalisation: What obligation do the nations that benefit from low-cost goods made in places like Bangladesh have to ensure a safe environment and basic rights for workers?
The textile industry, historically, has been prone to problems. It is a sector that thrives on cheap labour and can easily decamp from one country to the next as buyers at such major firms as Target or Spain’s Zara chain seek the lowest-cost suppliers.
The expiration in 2005 of a worldwide quota system, in which developed nations like the US limited how much in textiles they would import, touched off a global explosion of investment in such places as Bangladesh, a densely populated nation with a per capita income of around $2,000 annually.
The country now relies on garment exports for about a fifth of its annual economic output. Complexes with hundreds of warehouse textile shops have sprung up under lax oversight, and a consortium of textile factory owners has developed into a potent political force.
In documents submitted to the USTR, the Bangladeshi government acknowledged its inability to cope, saying the expansion of the textile industry ‘has outstripped the pace of our progress’ in strengthening regulation.
The tariff breaks in question allow Bangladesh to export a wide variety of goods to the United States tax-free; last year that amounted to about $35 million. The breaks do not apply directly to Bangladesh’s textile industry, which sells in excess of $4.5 billion of goods to the United States each year.
But analysts say excluding Bangladesh from the Generalised System of Preferences, a nearly 40-year-old programme meant to encourage manufacturing in poor countries, would send one of the sharpest signals available — short of cutting off trade altogether or increasing tariffs directly on textiles.
The GSP facility covers only 0.54 per cent ($26 million) of the total export at more than $5 billion to the US. Still its significance is higher as Bangladesh will have to face an image crisis if the GSP is scrapped.
But the largest export earner garments factory owners are not that much worried as the Bangladeshi garments do not enjoy the GSP facilities while exporting apparels to US.
Advocacy groups generally argue against those stark measures, on the grounds that the brunt of the pain falls on workers left jobless by the disruption in trade.
‘Bangladesh doesn’t want to lose this for symbolic reasons,’ said Kimberly Elliott, a senior fellow at the Centre for Global Development. ‘Cutting off trade doesn’t help anything. They lose 3 to 4 million jobs mostly held by young women who would otherwise be working on farms or having kids as teenagers.’
Among changes the Bangladeshi government has promised to avoid sanctions: It has pledged to join an international programme credited with improving working conditions in such places as Cambodia — a step that labour advocates have urged for years as textile employment in Bangladesh surged.
The plight of workers in Bangladesh has long been a concern — starting with child labour revelations in the 1990s and through the more recent spate of fires and industrial accidents — said Raymond C Offenheiser, president of Oxfam America and a former Ford Foundation representative in Bangladesh.
But for all the problems, the textile industry has also drawn millions of young women into the labour force, allowed them to send money home to village families and has probably delayed childbearing and marriage from the early teens — a dramatic cultural shift in the predominantly Muslim nation.
‘It has benefitted women in a powerful way,’ Offenheiser said.

-With New Age input

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EU deeply concerned over labour conditions

Admin — Fri, 03 May 2013 03:37:27 +0000

Following the Savar tragedy, the European Union (EU), Bangladesh’s largest trade partner, has expressed deep concerns over the labour conditions in Bangladesh, saying that appropriate actions would be taken including through the GSP to motivate responsible management of
supply chains involving developing countries.“It is almost one week since the collapse of an illegally-constructed building containing garment factories in Savar, just outside Dhaka in Bangladesh, on 24 April,” said Catherine Ashton and Karel de Gucht, EU senior representative for foreign affairs and security policy and EU commissioner for trade, respectively, in a joint statement on Tuesday.
“The sheer scale of this disaster and the alleged criminality around the building’s construction is finally becoming clear to the world. We are deeply saddened by the terrible loss of life. This tragedy is all the more shocking as it follows textile factory fires in Bangladesh in recent months which have killed more than a hundred workers,” it said.
The statement also said, “As Bangladesh’s largest trade partner, the EU is very concerned about the labour conditions, including health and safety provisions, established for workers in factories across the country. In the light of all these events, the EU calls upon the Bangladeshi authorities to act immediately to ensure that factories across the country comply with international labour standards, including the International Labour Organisation (ILO) conventions.”
“The EU is presently considering appropriate action through the Generalised System of Preferences (GSP). Bangladesh currently receives duty-free and quota-free access to the EU market under the ‘Everything But Arms’ scheme through the GSP, in order to incentivise responsible management of supply chains involving developing countries,” it said.
The EU is willing and ready to assist the Bangladeshi authorities in any way it can to meet the required international standards, said the statement.
“At the same time, we continue to encourage European and international companies to promote better health and safety standards in garment factories in Bangladesh, in line with the internationally recognized Corporate Social Responsibility (CSR) guidelines,” it added.
Meanwhile, according to a report by Reuters on Wednesday, if Bangladesh were to lose its preferential trading status with Europe over conditions in its garment factories, it could face hundreds of millions of dollars in duties and limits on access to its largest trading partner.
EU officials said on Wednesday they hoped the threat of action would be enough to make Bangladesh change its laws to secure a market which formed over a quarter of the south Asian state’s USD 40.5 billion annual exports in 2011. Any action would likely take more than a year.
“This is about firing a shot across the bows of Bangladesh to get them to engage on the issue,” an EU official told Reuters. “We want to turn up the diplomatic heat on them and get them to sit down and discuss this with us.”

-with The Independent input

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