i’ve noticed lately that, during the day, i morph fully into my pro-private sector persona, leading to every other sentence from my mouth being some sort of praise of the bangladesh private sector, or, alternately, advocacy for further private sector development in bangladesh. i guess that’s natural when working for a thinktank that focuses on private sector development in bangladesh.
but i find this disturbing. while it’s a load of fun to complain about the inefficiencies of the government and civil servants in general, it concerns me to no end that they aren’t the most evil things on the face of the planet. take a look at the events of the past two days in bangladesh: a fire in a garments factory kills dozens, and the next day, a former garments factory building, being renovated into a hospital, collapses, killing dozens more.
now i’m not saying that the government is immune from blame for all this crap. there were definitely significant lapses on the part of the government, especially in terms of enforcement of building codes and inspections, but the lion’s share of the blame must go to the private sector, in both instances.
it turns out, in the case of the factory fire, that there was no fire exit anywhere in the building, and the escaping herds got to the main gate only to find it locked. now, surely, someone is to blame here. in my extensive experience with the bangladesh garments industry, i can safely assure you that fire escapes are a requirement that almost all garments buyers impose upon their producing partners. so where was the fire exit in this case?
the problem with bangladesh’s garments industry is that not all big firms work directly with the buyers. instead, they wait for another big firm to get a large order from a buyer, say, gap, and then subcontract for part of the work. the buyers themselves are fooled into thinking that the entire production is being accomplished by one firm alone, and as a result never try to enforce their guidelines on these smaller subcontracting firms. this, in essence, means that the subcontracting firm is not under any pressure to adhere to any of the guidelines that their larger compatriots are abiding by. thus the owners of the subcontracting firms are able to get away with anything – longer hours,
unsafe working conditions, substandard wages etc.
begin interlude
several years ago, when the garments boom first began in bangladesh, my family opened our own garments factory, based above our own house. i’ve spent a large part of my formative years living under a garments factory, and subsequently, i spent a lot of time working in the factory. our major buyer was a very small indian firm, who supplied garments to walmart (this was before walmart decided to establish their own buying operation in bangladesh). these buyers, who have since been pushed out of the market, had no labor or worker safety standards for its supplying firms. as a result, our garments factory never had any air vents installed. now, we all know that the thread residue from garments production is dangerous to the lungs. but, back then, we had no buyer pressure to have them installed.
i remember, almost ten years ago, that, when the first garments factory fires began erupting, we installed a fire escape for the workers. this was not because the buyers wanted it – rather, it was because we felt that it would be a good idea, and it would make things more secure for our workers, in case there was a fire in the factory.
when the fight against child labor in garments factories first began, my father was against it, and met with most of the champions of the initiative to convince them that removing children from garments factories did not necessarily mean that the kids went to schools, because their parents would put them into some other occupation, in order to get more money. rather, through their work in garments, they were in a safe working environment, and were earning money for their families. it seems that, with the rapid growth in the number of street children as well as child laborers, my father was right. once again, the buyers did not take much of a proactive stand on this issue. when the national garments association banned child labor in garments factories, we were one of the first factories to comply. my father even arranged for the admission of the former child workers into schools. within one year, 94% had dropped out and began working in other fields.
in the global recession that resulted from 9/11, our small factory unfortunately could not survive.
end interlude
however, it was only after 9/11 that the buyers took a stand and started enforcing guidelines for the garments factory owners to comply with. now, most large and successful garments factories have gone beyond compliance and have established their own labor practices that are quite amazing in nature. in addition, all major buyers have now agreed on a single code for compliance for garments firms, which is a big step in the positive direction. this is because, different buyers enforced different guidelines, and it became difficult for large firms to work for different buyers.
however, it is my sincere belief that, for every large garments factory that actually complies with buyer guidelines, another ten firms are small, subcontracting firms that never come into contact with the buyers and are therefore immune from their pressures on labor safety and standards. which completely opens the field for unsafe, dishonest practices. the owners of these firms are out to make a quick buck, and will stoop to any underhanded method necessary to save money. hence, we have garments factory workers roasted alive because of the lack of fire escapes, and we have garments factory buildings that are built so badly that they collapse on their own volition.
it’s unfair to blame just the garments factories and there owners for bad buildings. a recent survey found that, if an earthquake of moderate intensity were to strike dhaka say, tomorrow, over 50% of the high-rise buildings would collapse immediately. this includes most residential apartment buildings that have been built in the city over the past ten or fifteen years. basically, this means that almost 70-80% of the massive and growing population of dhaka are at risk from an earthquake measuring 5 or more on the richter scale. how long do we have till this happens? not very long, if recent geological trends are correct.
why, precisely, will these buildings all turn to dust very shortly? because the builders of these buildings have regularly skimped on safety standards, and have used substandard building materials to construct their skyscrapers, primarily because it cost them less that way.
another brief personal example: we own a house, built in 1965, and an apartment, built in 1995. the house, having endured more than 40 years of torture, including playing host to a garments factory for almost 10 years, has begun to develop cracks in the foundation. the apartment, having existed for a fraction of that time, has ironically begun to develop the same cracks in the foundation.
in this relentless pursuit of saving as much money as you can by doing business shabbily, it seems we’ve lost all track of what social welfare means to us as a race. hence we can get away with unsafe workplaces, unstable buildings and shady business practices, while putting the rest of our fellow bangladeshis at mortal risk. and once disaster strikes, we can simply hop on the next plane out of the country and
escape persecution for what is undoubtedly a crime.
one of the few members of the bangladesh business community that i admire recently told me, “i’m sick and tired of all this talk about corporate social responsibility, especially since nobody else adheres to it.” this from a man whose family constitute pioneers in the bangladesh leather products business, and who has personally ensured that their leather suppliers maintain high standards and use efficient effluent treatment in production, and who has revolutionized management’s relationship with the workers in their firm. however, this does not mean that he’s going to give up on his already sufficient practices. in fact, he is one of the few entrepreneurs in bangladesh who has found that good business practices, including good corporate social responsibility practices, can yield better results through better worker morale and higher productivity. sadly, most businessmen in bangladesh do not understand this equation in the least.
it’s also important here to note that the government isn’t completely innocent either. due to years of corruption and a lack of capacity to better regulate business, the bangladesh private sector has realized that it can easily get anything it wants just by greasing a few palms under the table. and, worst of all, this is an election year. therefore, i’m certain the politicians will take any opportunity they can to somehow blame each other for these disasters.
but, in the midst of all this hullabaloo, it is important to remember that these events are disasters, and that while some high and mighty private sector guru and some lowly corrupt government officials are to blame, the lives that have been lost have been those of innocent people who had little to do with their crimes.
so what, you may ask, is the solution to this crisis? what can we do in the short term to ensure that these things do not happen again? the answer, i’m afraid, is nothing. there are no short-term solutions to fix the problem, especially not with the elections looming on the horizon. instead, all approaches need to be long-term in nature. first, the capacity of the government needs to be built to enable them to enforce building codes and conduct inspections to monitor compliance with guidelines more regularly. some intelligent and highly paid people should undertake this, to eliminate any need for corruption. second, the government needs to act quickly and aggressively when it comes to violations, instead of letting them meander or letting them go in exchange for a quick bribe. thirdly, there needs to be some quick judicial action, that makes examples of some of the violators, thereby dissuading others from trying the same. in a nation where bad business practices are as rife as they are in bangladesh, the primary concern may be who to begin punishing. the only way to be successful is to begin with the most powerful, because the bigger they are, the harder they fall. needless to say, the punishment of violators must be accomplished without regard to any political bias whatsoever. if some of our “honorable” ministers end up in jail for putting others at mortal risk, they should be the first on the gallows, in my opinion.
finally, but most importantly, bring back some sense of ethics into our business practices. it should not be about making money faster than your neighbor. rather, it should be about bringing about as much of a positive impact upon the general public as possible with your money. start with your workers, and ensure that they are safe, educated and looked after. that way you can increase worker loyalty, reduce employee turnover, and increase efficiency and productivity. in essence, we need to drill the benefits of corporate social responsibility into the minds of every existing and prospective entrepreneur in bangladesh. it’s probably a good idea to work with young entrepreneurs – that way, when this new generation takes over from their parents, the lessons will be ingrained into their system already, and should be visible in their business practices.
so i’m therefore in a quandary. is further private sector development healthy for bangladesh? during office hours, i will agree wholeheartedly. only after work does the caution seep out and do i begin to feel that maybe that might not be such a good idea right now.
There is another side to over privatization. There will be no one so provide services to the poor. We are a poor country. Social welfare is here to stay. Take e.g if we privatizes all the banks, why would a bank have a branch in some rural place? this is currently done by state owned bank. so in a country where you have to worry about the bottom falling through, you need to be careful about privatization.
Then there is the issue of employment. Too much privatization leads to unemployment, which is already at 30%. Unemployment gives rise to all other social problems…