Bangladesh garment industry fears for future after attack

Japanese government aircraft flying to Dhaka, which will carry family members of Japanese victims of siege, are seen before take off at Haneda airport in Tokyo. (Reuters)
Updated 03 July 2016
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Bangladesh garment industry fears for future after attack

NEW DELHI: The horrific slaughter of diners at a Dhaka cafe has fanned fears that surging terrorist violence may imperil the giant garment industry in Bangladesh, which built its economy on cheaply supplying fashion to the world’s big-name brands.
Gunmen stormed the Holey Artisan Bakery in the capital’s diplomatic quarter on Friday evening, rounding up foreign hostages before murdering 20 people with explosives and machetes, in a brutal targeting of the small expat community.
Terrorists released gruesome images of corpses lying in crimson pools on the cafe floor as they claimed responsibility for the deadly 11-hour siege. Most of the victims were Italian or Japanese.
“This attack will turn away foreigners,” said Faruque Hassan, senior vice president of the Bangladesh Garment Manufacturers and Exporters Association, which represents 4,500 factories.
“The impact of this attack will be very damaging for the industry. We are now extremely worried,” added Hassan, whose Giant Group supplies clothes to retailers including Britain’s Marks & Spencer and Next.
Even before the cafe siege, Bangladesh, the world’s second-biggest exporter of apparel after China, was reeling from a wave of Islamist-linked killings of religious minorities, liberal activists and foreigners, including an Italian aid worker last September.
Concern is mounting that the South Asian nation, wracked by political instability since independence in 1971, is sliding into deeper chaos, with under-pressure police arresting 11,000 people last month in a desperate crackdown.
“The hostage crisis in Dhaka is a terrible tragedy reflecting how security has deteriorated in the country,” said Sarah Labowitz, co-director at the NYU Stern Center for Business and Human Rights in New York.
The violence presents “a serious threat to the economy,” Labowitz said.
“This kind of attack will surely keep (fashion) buyers away in the months leading up to the holiday shopping season.”
Although a quarter of its 160 million people still live below the poverty line, Bangladesh has clocked growth of around six percent nearly every year since the turn of the millennium.
That’s largely thanks to garment exports, the lifeblood of its economy, accounting for more than 80 percent of total outbound goods last year.
Between them the nation’s clothing factories employ more than four million people, most of them rural women.
Ulrica Bogh Lind, a spokeswoman for H&M, which sources many of its clothes from Bangladesh, told AFP the Swedish chain was “deeply sad about the tragic incident.”
“We are of course monitoring the situation in Dhaka closely.”
Trade-dependent Bangladesh may suffer the same fate as Pakistan, fears Ahsan Mansur, a former representative for the International Monetary Fund in Islamabad.
“I saw the decline of a promising economy into a terrorist hotspot. This attack reminds me of those days, although I hope things won’t turn out that way,” said Mansur, now executive director of the Policy Research Institute in Dhaka.
When extremist violence began to spread in Pakistan, he said, the first sign of financial malaise was expat families packing their bags, then trade and investment crumbled.
“The perception that Bangladesh is a potential terrorist hotspot can seriously hit our export potential and growth prospects.”
Yet plucky Bangladesh has ridden out numerous storms, seeing off threats from labor unrest, mass transport blockades and large-scale political paralysis — as well as workplace disasters.
Clothing exports swelled nearly 10 percent in the year to June, to $27.3 billion, industry figures show.
The deadly Rana Plaza factory collapse that killed at least 1,138 workers in 2013 shocked the world, heaping opprobrium on Western retailers seen as exploiting impoverished workers.
But the tragedy prompted retailers to act on appalling safety conditions in their factories, where fires and other accidents are frequent.
Brands set up two global alliances to make workshops safer and cleaner — although it remains a work in progress.
While retailers will watch Bangladesh closely, industry experts point out that unrest plagues many developing countries where labor is cheap.
As Islamist attacks in France, Brussels and the US over the past year show, the threat of extremist violence is not confined to single countries.
“If foreigners give in to fear, terrorism’s political mission will have succeeded,” said Devangshu Dutta, chief executive of Third Eyesight, a retail consultancy in New Delhi.
“Exports and foreign investment are both critical (in) the upliftment of a very large poverty-stricken population,” Dutta told AFP.
“The contribution of foreigners is vital. It is important for everyone to remain engaged.”


In nod to debt concerns, China Belt and Road summit to urge sustainable financing

Updated 21 April 2019
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In nod to debt concerns, China Belt and Road summit to urge sustainable financing

  • The Belt and Road Initiative envisions rebuilding the old Silk Road to connect China with Asia, Europe and beyond
  • But the initiative has proved controversial in many Western capitals, particularly Washington

SHANGHAI: World leaders meeting in Beijing this week for a summit on China’s Belt and Road initiative will agree to project financing that respects global debt goals and promotes green growth, according to a draft communique seen by Reuters.
The Belt and Road Initiative is a key policy of President Xi Jinping and envisions rebuilding the old Silk Road to connect China with Asia, Europe and beyond with massive infrastructure spending.
But it has proved controversial in many Western capitals, particularly Washington, which views it as merely a means to spread Chinese influence abroad and saddle countries with unsustainable debt through nontransparent projects.
The United States has been particularly critical of Italy’s decision to sign up to the plan last month, the first for a G7 nation.
In an apparent nod to these concerns, the communique reiterates promises reached at the last summit in 2017 for sustainable financing — but adds a line on debt, which was not included the last time.
“We support collaboration among national and international financial institutions to provide diversified and sustainable financial supports for projects,” the draft communique reads.
“We encourage local currency financing, mutual establishment of financial institutions, and a greater role of development finance in line with respective national priorities, laws, regulations and international commitments, and the agreed principles by the UNGA on debt sustainability,” it added, referring to the United Nations General Assembly.
The word “green” appears in the draft seven times. It was not mentioned once in the summit communique from two years ago.
“We underline the importance of promoting green development,” the draft reads. “We encourage the development of green finance including the issuance of green bonds as well as development of green technology.”
The Chinese government’s top diplomat, Wang Yi, said on Friday that the Belt and Road project is not a “geopolitical tool” or a debt crisis for participating nations, but Beijing welcomes constructive suggestions on how to address concerns over the initiative.
A total of 37 foreign leaders are due to attend the April 25-27 summit, though the United States is only sending lower-level representatives, reflecting its unease over the scheme.
The number of foreign leaders at the April 25-27 summit is up from 29 last time, mainly from China’s closest allies like Pakistan and Russia but also Italy, Switzerland and Austria.
China has repeatedly said Belt and Road is for the benefit of the whole world, and that it is committed to upholding globally accepted norms in ensuring projects are transparent and win-win for all parties.
“We emphasize the importance of the rule of law and equal opportunities for all,” the draft reads.