CPD RMG Study Stitching a better future for Bangladesh
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As the country is moving forward to expedite economic growth and is getting more integrated with the global market, it is also bringing challenges along which include—the need to adhere to international labour laws and ensuring safety standards in working conditions, particularly in manufacturing, and the need to be environmentally compliant. In fact, green economic transition is crucial for a sustainable growth. Following Bangladesh’s graduation from the least developed country (LDC) category in 2026, Bangladesh will need to comply with stringent compliance requirement in many areas including environment to remain competitive. The textile and readymade garments (RMG) industry, being one of the most resource-intensive sectors, has high potential to contribute towards achieving Bangladesh’s climate goals.
In the above context, the Centre for Policy Dialogue (CPD) has undertaken a programme titled “Securing Green Transition of the Textile and Readymade Garments Sector in Bangladesh” in collaboration with the Embassy of Sweden in Bangladesh. The objective of the programme is to contribute towards the enhancement of environmentally sustainable and climate-neutral growth in Bangladesh with productive employment opportunities for women and youth. The programme will explore barriers to green transformation, review existing fiscal measures, identify best practices suitable for green transformation, and build up evidence on how green transition in this industry will generate new opportunities to benefit firms, workers, economy and society. In order to launch this programme, CPD organised a dialogue in Dhaka on Sunday, 30 January 2022.
Dr Fahmida Khatun, Executive Director, CPD, moderated the dialogue and made a presentation introducing the programme. While presenting at the session, she said that GoB has already made commitments for greenhouse gas (GHG) reductions and other climate measures and shown its efforts through the formulation of several regulatory and fiscal policies. In line with the increasing need to enhance environmental compliance, this calls for the initiatives of all stakeholders. Especially, the private sector has to play the most important role in mitigating the challenges of climate change. Green transition will help maximise benefits of the industrial development not only on economic front, but also on environmental and social fronts as well.
Dr Fahmida also underscored a number of challenges in this regard. She said, policies, regulatory measures and economic instruments for greening the economy and the sector are not adequate. Green transition of this industry requires large financial investment for improved production processes and resource-efficient productivity. Lack of awareness as well as lack of knowledge and skills, lack of any premium prices for green products are some of the other challenges. Besides, small and medium sized factories or factories in tier 2 and tier 3 may not be in a position to make investments for green production process. To overcome the challenges, attention needs to be shifted to issues such as re-skilling and up-skilling the labour force; strengthening of policies including pollution control policies, resource efficiency and cleaner production policies, energy management policies, and chemical waste management policies; accessing and mobilising finance; and so forth.
Ms Christine Johansson, Deputy Head of Mission and Head of Development Cooperation, the Embassy of Sweden remarked that this programme’s objective is to contribute towards enhancement of an environmentally sustainable and climate-neutral growth in Bangladesh with productive employment opportunities for women and youth. Sweden has a five-year-long development cooperation strategy for Bangladesh, and focuses on four strands of development: gender equality; climate and environment; inclusive economic development; and health including sexual and reproductive health rights. Shedding light on the importance of greening this sector, Christine said, the textile and RMG sector is one of the largest sources of pollution and energy consumption, and the negative impacts of climate and environment have dire consequences for women’s and men’s lives and livelihoods. Also, this sector is an important provider of livelihood opportunities, and hence, plays an important role in economic empowerment and poverty reduction. She also said, Bangladesh has excelled strongly on many levels last year, and following its upcoming graduation from the LDC status, a number of challenges as well as possibilities are lying ahead. In light of climate related challenges, all stakeholders should play a collaborative role; especially the private sector must play a strong role here, she added.
Mr Saber Hossain Chowdhury, MP, Chairman, Standing Committee on Ministry of Environment, Forest and Climate Change, Bangladesh Parliament, graced the dialogue as the Chief Guest. Thanking CPD for undertaking this programme, he highlighted issues including fair pricing, incentivising the greening of this sector, and income tax benefits. He agreed upon a partnership between various stakeholders to build a roadmap to translate the suggestions into financial benefits.
Mr Mohammed Zahidullah, Chief Sustainability Officer, DBL Group, said that Bangladesh textile industry has already started its journey towards green transition. To gear up the transition process and sustainability, financial support—including incentive benefits and tax benefits—is expected from the government, he remarked. Also, receiving the fair price from the buyers is still due. Without the support from buyers and the government, success cannot be achieved by putting the burden on the shoulders of the entrepreneurs and brands alone.
Mr Md. Fazlul Hoque, Managing Director, Plummy Fashions Limited and Former President, Bangladesh Employers Federation (BEF) and Bangladesh Knitwear Manufacturers & Exporters Association (BKMEA), said that green transition is such a responsibility which is carried on by the brands and entrepreneurs alone. Mr Hoque raised the concern over lack of adequate policy support in this regard, and talked about issues like incentivising new entrepreneurs to a greater extent and providing quality environment for the workers. He looks forward to more pertinent interactions with policymakers through this programme.
Ms Nazma Akter, Founder and Executive Director, Awaj Foundation, emphasised that, no economic progress is possible without the participation of people and workers wellbeing of the workers should be at the forefront. For that, she emphasised the importance of collaboration between all relevant actors including manufacturers, buyers, brands, entrepreneurs, workers, associations and the government. She highlighted that fair prices should be in place where buyers and factories both have equal responsibilities.
Mr Shams Mahmud, former President of DCCI and Managing Director of Shasha Denims Ltd., highlighted the absence of acknowledgement and participation at government’s end. The lack of a uniformed programme or a single window and an energy audit are some key challenges in the process. He also urged for a unified long-term government policy.
Mr Mohammad Hatem, Executive President, BKMEA, echoed the issues involving reasonable price, bank-client relationship, long-term investments, workers’ welfare, and most importantly, government’s policy support.
Mr Faruque Hassan, President, Bangladesh Garment Manufacturers and Exporters Association (BGMEA) said, the industry is ready and open for constructive criticisms unless and until it is biased. He emphasised the importance of more strategic collaboration and better access to technology as well skilled workforce.
The event was followed by an intriguing open-floor discussion. Policy-makers, representatives of the private sector, think-tanks, non-government organisations (NGOs) and development partners, experts and journalists participated in the dialogue.
