Lessons on Governance from Bangladesh’s Garment Industry
One year ago today, in the outskirts of Bangladesh’s capital city, an eight-story garment factory collapsed of its own weight, killing 1,130 young workers and injuring thousands more. The ghastly photos of bodies trapped in the Rana Plaza wreckage provoked outrage in the wealthy world, targeted largely at global retailers who purchased garments there. North American and European consumers called for measures to ensure safe conditions and humane treatment for Bangladeshi garment workers, mostly young women from poor families in remote rural areas. Many called for a boycott of the big-box retailers and of the Bangladeshi products they sell.
I had just moved from Bangladesh to Europe at the time, and my advice to friends who asked was: “Go ahead and buy those skinny jeans or that tank top if you want. It’s the right thing to do for Bangladesh and its young workers.”
The garment industry in Bangladesh is both a driver, and reflection, of a remarkable social transformation in a country long considered a poverty-ridden basket case. Employment in the industry rose rapidly over the past three decades, with women comprising an estimated 80 percent of garment workers (Figure 1). Public investment in basic education and family planning, combined with private investment in manufacturing (mostly garments) fueled a massive influx of women into the labor force, giving them an important measure of economic emancipation and contributing to rising growth rates and sustained development in Bangladesh (Figure 2). As a result, the share of Bangladeshis in poverty dropped from nearly 60 percent in 1990 to around 30 percent today.
This progress has occurred in an environment deemed among the most corrupt in the world. Indeed the country ranked dead last in Transparency International’s global Corruption Perception Index in 2005, and has crawled up to only around the 25th percentile today. I experienced this first hand as the World Bank’s Country Director for Bangladesh from 2009 to 2013, as I dealt with the country’s highest-profile corruption scandal of that time.
I received the news of the collapse of Rana Plaza with a mix of horror and a sense of inevitability. After all, similar events happen every week in Bangladesh: buildings fall over, ferries sink, and dangling wires electrocute passersby. This is the cumulative, corrosive effect of pervasive corruption, and it is the poor who suffer from it disproportionately.
Global retailers can have an important influence on the behavior of Bangladeshi industries, but their reach into the country’s governance is limited. International reaction put the spotlight on these retailers and let Government largely off the hook for this tragedy. Where was the global outrage over Government’s cumulative corruption and lack of accountability?
In the months following the Rana Plaza disaster, I thought often about what I learned in trying to tackle corruption in Bangladesh. Here are five lessons I took away:
Lesson 1 – Hold governments accountable. Time and again in Bangladesh, government failed to enforce building codes and curb unlicensed construction in unsafe areas. We saw failure to enforce workplace health and safety standards for access, crowding, lighting, ventilation, working hours, bathroom breaks, and minimum wage. Governments need to be held accountable for the enforcement of national laws. While donors such as the World Bank rightly insist on this within the scope of their own operations, more can be done to build citizens’ capacity to hold their governments accountable.
Lesson 2 – Take a public stand. Sometimes it seemed like the global community could not influence events in Bangladesh. But when confronted with evidence of corruption, the World Bank took a public stand. As the face of the Bank, I became daily headline news for months—even without making statements to the press. My notoriety proved hugely important to the people of Bangladesh. I was stopped in the streets by entrepreneurs, rickshaw drivers, and even beggars. In a system perceived as too corrupt to change, I gave hope to a weary populace. Most wanted a photo of me with their children, so that the next generation would remember the stand we took against corruption—and one day find the voice to demand accountable government too.
Lesson 3 – Stay engaged. Ultimately, the Bank decided to cancel this particular project. But before that, we came close to walking away from Bangladesh altogether. That would have been a mistake. If the global community walks away when confronted with rampant corruption, we steal hope from hard-working people, and let the corrupt forces triumph. Staying engaged has some risks, but we have a formidable toolbox to prevent and detect corrupt practices, and we must deploy it to the extent possible. We must also recognize that we cannot eliminate the risk of corruption, and must accept and manage some level of risk in order to reap the benefits of transformational projects. To walk away is to walk away from the fundamental development challenge we are meant to address.
Lesson 4 – Support the good guys. By this, I mean the men and women—often ministers and civil servants—who work every day to better their society within a crushingly corrupt system. These are individuals who maintain high standards of integrity and a deep commitment to improving the lives of the poor and marginalized. For decades, the Bank has supported them in achieving some remarkable development results in Bangladesh—getting poor children into school, electrifying rural households, promoting female entrepreneurship—even as major corruption scandals headlined the news.
Lesson 5 – Build transparent systems. The best way to deter and detect corruption is by creating transparent systems which citizens can use to demand accountability. In 2005, the World Bank Group began supporting Labor Counselors in garment factories in Bangladesh’s export processing zones. By creating a transparent system for monitoring worker safety and benefits requirements, the payment of mandatory wages rose from 30 to 94 percent, and working environment compliance rose from 25 to 96 percent by 2010. This represents real and measurable improvements in the lives of Bangladeshi garment workers, and is just one of many examples of transparent systems that work for people.
These are lessons that I now carry into other countries and other circumstances. If we implement them, I believe we will effect long term change in some of the world’s most corrupt environments, and we will help the world’s poor speak with a louder voice. That is a fitting tribute to those who died at Rana Plaza one year ago.
Oh, and go ahead and buy those Bangladeshi garments, please. Boycotting only hurts the young woman behind the sewing machine. She may appear weak and helpless, but she is economically independent, she is a powerful social force, and she is the best hope for long-run development in Bangladesh.