Some leaders of Bangladesh’s US$26 billion garment industry expect Western fashion retailers to review their ties with the world’s second-largest garment exporter after militants killed at least 17 foreigners in an attack on a Dhaka restaurant.
Bangladesh, one of the world’s poorest countries, relies on garments for about 80 percent of its exports and for about 4 million jobs, and ranks behind only China as a supplier of clothes to developed markets like Europe and the US.
Militants killed 20 people, including at least nine Italians, seven Japanese and an American, inside an upmarket restaurant in Bangladesh’s capital, before security forces stormed the building and ended a 12-hour standoff on Saturday.
Photo: AFP
“An incident like this will definitely impact us, in as much as our importers from places such as [the] US and China will be wary to visit because of the security concerns,” Ananta Garments managing director Shahidul Haque Mukul said.
The industry had been recovering strongly from a major tragedy three years ago, when a factory building collapsed, killing more than 1,100 people, prompting safety checks that led to many factory closures and the loss of exports and jobs.
It had also seemed little touched by a spate of recent murders on liberals, gays, foreigners and religious minorities in sporadic attacks claimed by Islamic State militants and al-Qaeda.
Between October last year and January, its exports surged 14 percent from a year earlier.
However, Friday’s attack signaled a more chilling threat to foreigners. The militants targeted a building housing two upmarket eateries popular with foreigners, and several of those killed were Italian garment entrepreneurs.
“Bangladesh has never seen such a horrific incident,” Bangladesh Garment Manufacturers and Exporters Association president Mohammad Siddiqur Rahman said. “It is a strong slap to our image. It will put pressure on our business, but we cannot say to what extent at the moment.”
A Bangladesh-based executive for a French-based garment buyer said he feared a deep slump in business in the coming days.
However, other industry figures said heightened security fears could be managed and that manufacturers could hold more meetings with Western customers outside Bangladesh, in Asian cities such as Singapore or Hong Kong, a trend that had begun some time ago.
“Concerns on visiting our factories, holding meetings, etc, by foreign nationals will be there for a few months, but I believe within six months, the intensity will thaw and things will be back to normal,” Brothers Fashion Ltd managing director Abdullah Hil Rakib said.
At least two European retailers which source clothes from Bangladesh, Sweden’s H&M Hennes & Mauritz AB and Britain’s Marks and Spencer Group PLC, said their operations in the country are not immediately affected.
Both said their workers are unaffected and that they have no plans to change their sourcing, but are monitoring the situation.
H&M’s spokeswoman said the company has “safety routines” for workers, though she did not elaborate.
The industry owes its resilience to some of the world’s lowest wages, the right skills and the fact that China has become less competitive as a producer in recent years.
The minimum monthly wage for garment workers in Bangladesh is US$68, compared with about US$280 in China.
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