Bangladesh: At least buyers can stay calm

It's terrifying getting caught up in a riot.
And the escalation in Bangladesh's garment-industry violence has been extraordinary and rapid. By Tuesday, June 22, Bangladeshi media were talking about 800 factories being closed by the owners in the Ashulia area, with around a million workers at least temporarily out of their jobs. The closures themselves caused riots, with media reports of tens of thousands on the streets – often in Bangladesh, a euphemism for near-lethal fights and widespread property destruction.
Since all buyers source from Bangladesh, it's easy for Western media to turn all this into emotive stories about Tesco, or Gap, or whoever else, having their production threatened. But only one buyer has so far publicly commented: Marks & Spencer simply say that "only three of the 39 factories we source from in Bangladesh are affected".

Intense violence has been part of how garments are made in Bangladesh for some years now. It's unlikely to get better soon: workers are the world's worst paid, the country's government has made a foolish public commitment to a timetable for better pay it simply cannot deliver on, its factory owners simply refuse to make any serious wage concession, and there may well be a germ of truth in businesses' constant claims of a conspiracy to destroy the country's factories.
But none of this will get any better if Western buyers start to panic. More than anywhere else in the world, Bangladesh's economy depends on low-cost garments for European, American and, increasingly, Japanese chains. The chances are that Bangladesh will remain a more or less reliable source for the foreseeable future: but the chances also are that occasional disruption will also remain a fact of life.
For buyers to leave Bangladesh would make the problem worse: but it also has to be admitted that for buyers to assume tight deadlines will be met is commercially unrealistic. Demanding that Bangladeshi manufacturers airfreight delayed garments also makes the situation worse: fearful of bankruptcy, garment makers are even less prepared to concede decent wages if they have to cost every garment as if there were a high likelihood it will need to be flown to the US or Europe.
The most helpful things garment buyers can do, in our view are:

• To continue buying from Bangladesh
• To mistrust scare stories of imminent chaos
• To continue pressure for decent wages
• But to source from Bangladesh only garments that can survive extended production cycles.

Though violence has become part of the Bangladesh way of masking garments, Bangladesh has become an essential part of most buyers' sourcing mix. There is no real alternative source of low-cost volume knitwear, and foreign businesses continue to invest in manufacturing capacity there. Continuing support for the country's products – but properly controlled - is still a commercially wise strategy