Industrial Riots Reveal Bangladesh's Crisis of Governance (Power and Interest News Report drafted by Michael A. Weinstein)
"Between May 20 and 24, the South Asian country of Bangladesh underwent the most severe and widespread industrial rioting in its history, as workers in its booming textile export industry torched 16 factories, ransacked 300 more and went on a general rampage, destroying cars, blocking roads, intimidating perceived adversaries and looting.
"As the rioting spread from the Gazipur industrial district throughout the textile belt and into the capital Dhaka, government security forces held back from making a decisive response, triggering a counter-demonstration by factory owners, who sat cross-legged in Dhaka's main thoroughfare, demanding that the army be brought in to quell the disorders on pain of indefinite plant closures.
"The violence peaked and seemed to be getting out of control on May 23—'Black Tuesday'— finally impelling the government to deploy paramilitary forces, which succeeded in quieting down the situation. Meanwhile, negotiations began between labor unions and the owners, mediated by the government, that resulted in an agreement fulfilling many of the workers' demands for higher wages and more favorable work rules. By Thursday, May 26, the violence had ended; factories were reopening and owners were demanding government compensation for their losses. The death toll stood at two workers, with hundreds of people injured.
"The riots have geoeconomic significance because they mark one of the first instances of successful mass direct labor action against the export manufacturing sector in a developing country.
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"Half of Bangladesh's population of 152.6 million—densely concentrated in the delta region on the Bay of Bengal—lives on less than US$1 per day. Two-thirds of the labor force is employed in agriculture and the literacy rate is 41 percent. The country is a large net labor exporter, with 400,000 Bangladeshis working in the United Arab Emirates alone, and remittances from abroad contribute the largest portion of foreign exchange.
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"The rise of Bangladesh's garment sector has not been attended by a corresponding improvement in labor compensation and working conditions. The monthly minimum wage of $14 was set in 1994, but the cost of living has doubled since then. Workers often put in 20 hour days, have not had guaranteed holidays, are frequently required to work overtime—sometimes without additional compensation—and sometimes have their wages go into arrears for more than two months.
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"With an insurrection in process, the Bangladesh Garment Workers Trade Union Center issued a series of demands, including Friday holidays, a 30 percent wage hike, no forced overtime, payment of wages in arrears and release of arrested workers and union officials. Alarmed by government inaction, the Bangladesh Garment Manufacturers and Exporters Association demanded that the army be deployed to suppress the riots and expressed willingness to negotiate with the unions at the same time that it filed a suit against six labor leaders.
"The manufacturers failed to convince the government to bring out the army and were unsuccessful in their attempts to get the Commerce Ministry to mediate the conflict. With Prime Minister Khaleda on a visit to the United Arab Emirates with the purpose of gaining energy concessions and expanding the number of guest workers, the government was unable to come up with a unified response. Finally, the paramilitary Bangladesh Rifles were dispatched and relative order was restored on May 24.
"The government also stepped in on May 24 to bring the unions and manufacturers together in a six-hour bargaining session that resulted in an agreement in which the manufacturers promised to raise wages, provide a 90 day maternity leave, issue appointment letters to all employees and pay workers full wages for the month of May.
"The government agreed to release arrested workers and union officials, and to drop the cases against them. It also promised to set up a 'minimum wage board for the garment sector and take steps to meet the demands of garment workers,' and—in a bow to the manufacturers—to investigate the causes of the riots.
"The unions declared victory and the owners demanded government compensation for their losses, which they estimated to be $70 million."
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