Global Supply Chains have become a common way of organising investment, production and trade in the global economy. Especially for so-called developing countries like Bangladesh, the integration into the global supply chains was supposed to create new opportunities for economic and social development. In fact, in some southern countries the increased trade through the global supply chain has created job opportunities and led to an economic upgrading. But overall the changing nature of international trade has led to downward pressure on local working conditions through increased informalisation of the economy. Fundamental rights at work, such as the right to organise and bargain collectively, are often not upheld. Child labour exists in many supply chains and minimum wages, when paid, are not sufficient to ensure a decent living standard.
Bangladesh’s economy is based on export-led development. The garments production is the most important industry by far, generating annual exports worth more than 28 billion US dollars. The sights are set on doubling the figure by 2021. More than 60 percent of all textile exports currently go to the European Union (EU). The latter is supported by trade agreements, such as the EU-Generalized System of Preferences (GSP).
Although trade agreements, such as the EU GSP which largely eliminates import duties and quantitative restrictions, have contributed crucially to Bangladesh’s economic development, they have failed to contribute in the same way to Bangladesh’s social development. Workers’ rights, as defined by the ILO core conventions, are often not fully compliant along the global supply chain. Some 4.4million people are employed in the garment industry, but less than five percent of them are unionised. In many other industries, the share is even lower. The Rana Plaza tragedy in 2013, tragically demonstrated the need for a broader understanding of Core Labour Standards (CLS+), including rights, such as health and safety. The accident triggered a much-needed debate at the international level concerning inhuman working conditions, exploitation and responsibilities along global supply chains. It is obvious that the oftenused narrative of shared prosperity through globalisation, namely trade, does not correspond with the reality.
The ones who suffer most, are too often the workers. In the future, Bangladesh will face more than ever the challenge to ensure economic and social upgrading at the same time.
The study is a part of the regional project CLS+, which was launched by Friedrich-Ebert-Stiftung in Asia in 2016.
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