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Globalized sacrificial altars

by Kevin Rafferty

Special To The Japan Times

Bangladeshi garment factory workers protested that cracks had appeared in the building and the police had declared that it should be evacuated. But the factory owners insisted they must work or they would not get paid.

So they went to work, and the building collapsed almost literally like a pack of cards. The count of the dead is more than 640, with an unknown number of workers unaccounted for in the world’s worst garment factory disaster. The tragedy that — yet again — killed hundreds of Bangladeshi garment workers poses important commercial, political and moral challenges to the country and to the global leadership of politicians and business executives alike.

It will not be easy because the difficult questions include what is the value of a human life? How much — or rather how little — are the people of the West prepared to pay for clothes? Do giant multinational companies, such as Wal-Mart Stores Inc., the Gap, H&M, and Inditex, have a responsibility to insist on — and pay for — safe working conditions in the factories in which their goods are produced?

There are challenges to the dangerous way that modern capitalism has developed — can stock markets thirst for companies to show constantly rising quarterly profits allow room for a conscience that pays for safe conditions even if it reduces earnings?

There are challenge for governments: Can individual governments stop the corrupt practices that are at the heart of many of the problems, that were also seen in the Bangladesh fire in November, which killed 124 people? Can governments as a whole or international bodies step in and enforce global standards — or is one of the first rules of globalization that no one is responsible, but everyone is squeezing to ensure the lowest production costs and biggest profits?

This is a very unequal struggle. The world’s garment business is worth $1 trillion. Wal-Mart Stores has annual sales that are bigger than the gross domestic product of all but 25 countries. The garment companies are huge with multinational tentacles. GAP includes The Gap itself and Banana Republic and Old Navy. The Philips-Van Heusen Corporation makes Calvin Klein and Tommy Hilfiger garments.

On the other, the sharp and vulnerable end of the production line are some very small people, some of whom earn less than $38 a month for their tough work in crowded and sometimes unsafe factories. In the middle are some very unsavory people, many with strong political connections, who will cut corners and defy rules and regulations in an effort to make money even at the expense of workers’ lives. The death toll in the November fire was made worse because fire exits were blocked. The eight-story building that collapsed in April was built shoddily and its top three floors should not have been there at all since the building permission was for five floors only.

The reaction to the Dhaka fire last year was both encouraging and discouraging. Companies taking goods from the factory that burned down paid money and offered to help improve standards. But the multinational companies stopped short of accepting proposals put forward by trade unions to improve safety standards throughout the industry for fear that they would be too costly and would impose legal obligations.

Perhaps the biggest miracle is the very rise of the garment industry in Bangladesh, which today is second only to China, producing $21 billion of goods a year and employing 3.2 million workers, mostly women, in 5,000 factories.

Who would have thought this possible in 1971 when India acted as midwife to rip a sickly new country, Bangladesh, from the Pakistani military?

Henry Kissinger was not the only person who wrote the infant Bangladesh off as an eternal “basketcase,” meaning that it would have to rely for its survival on injections of billions of dollars of aid.

Bangladesh owed its creation to tragedy and death. In 1970 a cyclone ripped through what was then East Pakistan, and whisked 500,000 people from the face of the earth — an event which merited just three inches in the Financial Times, in spite of my midnight telegrams of pleadings from the scene. “For these people tragedy and death are normal, so what is the news?” responded an editor.

When in the aftermath of the cyclone the East Bengalis elected a new government that sought autonomy, the military rulers of Pakistan ignored the result and then cracked down, killing and raping more than a million people and sending millions more fleeing to safety of squalid refugee camps in India. The Pakistan Army was aided by the criminal indifference of an unholy alliance of China and the U.S., which both looked the other way uttering the mantra that, “It is an internal Pakistani affair.” (While the Pakistan military were doing their bloody work killing Bengalis, Henry Kissinger was using the cover of Pakistan to visit Beijing and start the great reopening of diplomatic relations between China and the U.S.)

The resources and finances of newborn Bangladesh were precarious, with nearly 100 million people crowded into a disaster- prone area smaller than England and Wales, unable to feed itself, with nearly no natural resources and its major export of jute in rapidly declining demand in a world hungry for plastic bags.

The only other major export was tea, strong, but of dust quality, useful for giving punch to morning tea bags. Bangladesh was looking for $1 billion a year from economic aid for mere survival.

Globalization, the garment industry and the willingness of its women to work in the unsafe factories for low wages have rescued Bangladesh and given it economic hope. The garment industry is 15 times more valuable than aid ever was. Equally important, women are earning new opportunities and widening their horizons.

But factory life is not fun —even when the building is safe. Cynics might also say that fewer people have died in the two major factory disasters, and in a string of other less noticed incidents, than die daily from hunger and preventable diseases such as malaria.

The problem with global markets is that, as presently constituted, they pay little respect to national boundaries or human rights. If campaigners press too hard, say for a minimum wage of $2 a day or for inspected, safe, air-conditioned factories, the multinational companies can just take their business to other countries with workers willing make sacrifices. In the case of the factory collapse, the multinationals can legitimately claim that they should not be blamed for the Bangladeshi owners defying building and construction laws that put the workers at risk.

But it is surely time for international bodies to lend a hand in improving basic global rules and regulations. With markups giving them margins of 300 to 400 percent on the cost of production, the multinationals can afford to slim a bit.

The World Bank could provide aid for Bangladesh, and other countries, on drawing up and ensuring safe building codes and standards, and on stiffening the resolve of governments to prosecute offenders. The International Labour Organization could work with the multinationals on a code of pay, working conditions and training of workers.

In the long run the companies would benefit from paying more for better trained workers able to produce better quality products. But would capricious markets understand the value of such investments? And would fickle consumers be prepared to pay extra pennies for safer work?

Kevin Rafferty is a professor at the Institute for Academic Initiatives at Osaka University.