Some leaders of Bangladesh’s $26 billion garment industry expect Western fashion retailers to review their ties with the world’s second-largest garment exporter after Islamist militants killed more than a dozen foreigners in an attack on a Dhaka restaurant.
Bangladesh, one of the world’s poorest countries, relies on garments for around 80% of its exports and for about 4 million jobs, and ranks behind only China as a supplier of clothes to developed markets like Europe and the United States.
“An incident like this will definitely impact us, in as much as our importers from places such as (the) U.S. And China will be wary to visit because of the security concerns,” said Shahidul Haque Mukul, managing director of Ananta Garments.
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The industry had been recovering strongly from a major tragedy three years ago, when a factory building collapsed, killing more than 1,100 people, prompting safety checks that led to many factory closures and the loss of exports and jobs.
It had also seemed little touched by a spate of recent murders on liberals, gays, foreigners and religious minorities in sporadic attacks claimed by Islamic State and al Qaeda.
Between October and January, its exports surged 14% from a year earlier.
But Friday’s attack signaled a more chilling threat to foreigners. The militants targeted a building housing two upmarket eateries popular with foreigners, and several of those killed were Italian garment entrepreneurs.
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“Bangladesh has never seen such a horrific incident,” said Mohammad Siddiqur Rahman, president of the Bangladesh Garment Manufacturers and Exporters Association.
“It is a strong slap to our image. It will put pressure on our business, but we cannot say to what extent at the moment.”
A Bangladesh-based executive for a French-based garment buyer said he feared a deep slump in business in the coming days.
But other industry figures said heightened security fears could be managed and that manufacturers could hold more meetings with Western customers outside Bangladesh, in Asian cities such as Singapore or Hong Kong, a trend that had begun some time ago.
“Concerns on visiting our factories, holding meetings, etc, by foreign nationals will be there for a few months but I believe within six months, the intensity will thaw and things will be back to normal,” said Abdullah Hil Rakib, head of exporter Brothers Fashion Ltd.
The industry owes its resilience to some of the world’s lowest wages, the right skills and the fact that China has become less competitive as a producer in recent years.
The minimum monthly wage for garment workers in Bangladesh is $68, compared with about $280 in mainland China.