In all its reports about the Bangladesh factory collapse, the western media seems to have overlooked an important question- Was Rana Plaza an example of capitalism gone wrong? David Rowlands from Australia’s Green Left Weekly says that the disaster, that rocked the developed world, stems from a deep deficiencies in what he defines as the “neoliberal capitalist model.”
Credit- Green Left Weekly
Bangladesh: What has changed after Rana Plaza?
In the aftermath of the April 24 Rana Plaza collapse, the plight of Bangladeshi garment workers occupied global media attention in a way it never had before.
The inconvenient thing about Rana Plaza, as far as the fashion brands that rely on outsourced sweatshop labour were concerned, was that so many workers — more than 1100 — died in one spectacular incident.
The 1800 workers killed in separate incidents since 2005 had been easy to ignore, but Rana Plaza was different. It was a big, uncontrollable story that caused the mainstream media to raise questions about the nature of the relationship between retailers and their labour force in Bangladesh.
For a brief moment, the wide conceptual gulf between the consumer goods on our shelves and the exploited foreign workforce that makes them was bridged. With research indicating that the consumer base in Western nations was concerned about the situation in Bangladesh, there was a general feeling that “something” should be done.
Three months on from Rana Plaza, what has changed?
Rhetorically, some progress appears to have been made. For instance, scores of global brands, including several Australian ones, have now signed on to the Bangladeshi Fire and Building Safety Accord, a step they had previously resisted.
It was public pressure, generated in part by campaigning NGOs such as Oxfam, that shamed the retailers into signing up.
Oxfam said: “The Accord, which has been signed by more than 80 global retailers, including Target, Kmart, Forever New and Cotton On, gives workers the right to refuse dangerous work, and mandates independent building inspections, workers’ health and safety training, and repairs and renovations to unsafe factories.”
This development has been cautiously welcomed by Bangladeshi labour organisations, but the sign-up has been far from universal and it remains to be seen how effective it will actually prove in reducing the industrial attrition that has been accepted for so long in the Bangladeshi garment export free-for-all.
Several large Australian companies have flatly refused to take part. Oxfam reports that, as of July 24, the hold-outs included, “Woolworths (Big W), the Just Group (Just Jeans, Jay Jays), Best and Less, Rivers, and Pacific Brands (Bonds, Berlei).”
Safety Accords make for good corporate public relations exercises, but in their current form they do not challenge the deep structural mechanisms of exploitation that have underpinned the global capitalist economy since the age of conquest began five centuries ago.
Like the 5000 or so other factories where 3.5 million Bangladeshi garment workers, mostly rural women, earn less than $40 a month working 15-hour days for six days a week, the factory at the shoddily built Rana Plaza represented a significant victory for the “market forces” that have driven the post-Cold War globalisation project.
Since its inception, the globalisation campaign has been involved in a continuous “race to the bottom” in terms of wages and conditions. This race has moved from continent to continent, leaving devastated societies in its wake.
One of the first low-wage frontiers was Mexico, which was handed over to multinational corporations courtesy of the 1994 North American Free Trade Agreement (NAFTA). For a few years, boom conditions prevailed on the Mexico-US border zone and the world became familiar with the term “maquiladoras”, glorified sweatshops filled with poorly paid female workers.
And then, almost as suddenly as it had begun, the NAFTA boom was over. The low wages paid in Mexico were not low enough to satisfy the profit-hungry corporations, who found an even more cut-price workforce in Asia as China increasingly integrated itself into the world economy.
In recent years, rising wages and higher production costs in China have prompted another wave of capital flight to places like Bangladesh and Pakistan. In Bangladesh, one of the poorest and most flood-prone countries in Asia, the corporations found conditions that were almost diabolically ripe for exploitation.
Bangladesh has a total land area considerably less than the Australian state of Victoria and a population of 150 million, almost eight times larger than that of Australia.
During the 1980s, Bangladesh was encouraged by institutions like the World Bank to begin using its “comparative advantage” to carve out a niche for itself in global manufacturing.
The comparative advantage was, of course, its desperately poor and highly concentrated population, which would be willing to work longer hours for pay rates lower than almost anywhere in the world.
Bangladesh was one of many developing nations to undertake “structural adjustment programs” during this period. These programs were designed to soften up the already vulnerable Bangladeshi economy, like a heavy artillery barrage before troops move in to occupy.
Under the close direction of the World Bank, Bangladesh removed almost all protection for domestic industries and embarked on a scorched-earth campaign of denationalisation and privatisation. Restrictions on direct foreign investment were dramatically slashed, as were tax rates for foreign companies operating in the countries.
Tariffs on agricultural imports were cut, resulting in agribusiness “dumping” and the loss of agricultural livelihoods for millions of Bangladeshis. Once the “anti-export bias” in the economy was removed, Bangladesh emerged as an “open”, “liberalised” economy, meaning that it was ready for plunder — like Mexico before it.
Research by Bangladeshi academic Mohammed Nuruzzaman has found: “Instead of distributing benefits among different societal groups [the neoliberal reforms] have brought an economic windfall mainly for the business and industrial class in Bangladesh.
“There is now a small group of 40 to 50 families who effectively control the total industrial and financial assets of this poor nation. The lack of policies of distributional justice has resulted in widening disparities in income and wealth between the low and high strata of the society and deterioration in the overall poverty situation of the country.”
As in its dealings with other developing nations, Washington has sought by a variety of means to keep the general Bangladeshi population under strict levels of control.
During the neoliberal era, it has been a key objective of US foreign policy to bolster client regimes that implement policies designed to enrich foreign corporations at the expense of host societies.
Billions of dollars of “aid” has been funnelled to the Bangladeshi state since 1972, in return for compliance with Washington-approved development policies.
The US military has forged close links with the Bangladesh Armed Forces, ostensibly to remediate natural disasters and counter “terrorism”, but actually to suppress internal dissent as the society polarises between a tiny wealthy elite and a vast underclass.
Western-backed death squads and neoliberalism have always gone hand in hand. In Bangladesh, the extrajudicial torture and killing of labour activists and other dissenters is performed by the Rapid Action Battalion [RAB], a specialist military outfit established in 2004 which openly engages in so-called “crossfire killings”.
The RAB has claimed over a thousand victims in recent years, probably including a prominent labour organiser, Aminul Islam, who was disappeared in April last year.
At the time of his death, Islam was involved in negotiations on behalf of workers in a dispute with factories making products for Tommy Hilfiger and American Eagle.
In 2010, secret US diplomatic cables released by WikiLeaks showed that the RAB was receiving extensive training from the British government in “rules of engagement” and “investigative interviewing techniques”. Another leaked cable reveals that the US ambassador considered the RAB the “enforcement organisation best positioned to one day become a Bangladeshi version of the US Federal Bureau of Investigation.”
The repression of the Bangladeshi workforce, a task carried out with the active assistance of Western governments, has led to a climate of impunity for garment manufacturers — with foreseeable consequences.
Only a month before the Rana Plaza collapse, the report “Fatal Fashion” by the Dutch-based Centre for Research on Multinational Corporations said: “Bangladesh has the lowest hourly wage in the world at US$0.32 cents per hour …
“As a consequence, the volume of orders … has exploded, but the production capacity of factory buildings has not been adequately adapted to these changing circumstances.
“In combination with failing or absent government inspections and inadequate buyer policies, this creates a ticking time bomb and the certainty that many more calamities will occur unless considerable investments in building and fire safety in … Bangladesh are made.”
Oxfam and other NGOs have rightly called on the recalcitrant firms in Australia and elsewhere to sign on to the Fire and Building Safety Accord.
However, even if all retailers were to sign on tomorrow, their past conduct in Bangladesh raises serious doubts as to whether their commitment to meaningful safety standards would last after the ink had dried.
It is the relentless squeezing of Bangladeshi suppliers, the endless and shameless haggling by Western companies for lower and lower production costs, that creates the criminally negligent safety standard in Bangladesh.
And as for workers’ dignity, forget about it.
By design, wages in Bangladesh are not living wages, and when the corporations talk piously about promising to pay Bangladeshi workers the “minimum wage” or even slightly above it they know full well that it is impossible to live decently on it.
Kmart Australia managing director Guy Russo said: “Kmart’s strict requirement for supplier factories is that they must pay at least the minimum rate to all workers or we will not do business with them.
“Lifting people out of poverty through economic development is vital.”
This is pure spin, designed only to get Kmart through the next media cycle. After decades of neoliberal “economic development”, the average Bangladeshi yearly income remains under $650 (compared to the global average of $8000).
More than a third of the Bangladeshi population lives below the poverty line. Most of the rest hover just above it in perpetual insecurity.
A relevant question that might be addressed to Kmart and other Australian exploiters is whether they will formally commit to paying their Bangladeshi workers a living wage.
Reform measures will not in themselves lead to a meaningful reconfiguration of the power relationship between foreign capital and Bangladeshi labour — and it is this grossly unequal power relationship, the deliberate outcome of decades of neoliberal policies implemented by Western governments, global financial institutions and their Bangladeshi elite collaborators, that actually led to the “ticking time bomb” of Rana Plaza in the first place.
This disaster was the outcome of capitalist globalisation logic, a point that the vast bulk of media coverage of the event has simply shied away from.
If we really want to improve conditions for garment workers, the neoliberal capitalist model must be challenged from within the Western societies that have imposed it on the rest of the world.