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Bangladesh urged to use LDC graduation as an opportunity to rethink its reliance on RMG

UNB || BusinessInsider

Published: 17:27, 29 May 2023  
Bangladesh urged to use LDC graduation as an opportunity to rethink its reliance on RMG

Photo: Collected

UN Special Rapporteur on extreme poverty and human rights Olivier De Schutter on Monday urged the government of Bangladesh to use its upcoming graduation from LDC status in 2026 as an opportunity to rethink its reliance on the ready-made garment industry.

The RMG industry currently accounts for 82% of the country’s export revenue and employs 4 million workers.

“As Bangladesh moves towards graduation, it continues to focus much of its energy on providing tax incentives to international investors and establishing special economic zones,” he said at the end of a 12-day visit to the country.

The Special Rapporteur will present his final report on Bangladesh to the Human Rights Council in June 2024.

The government's time and resources would be better spent on ensuring fair wages, educating and training workers, and improving social protection, the UN expert said.

“Not only will this attract investors who care about their reputation, but it will also pave the way for a new form of development in Bangladesh – one driven by domestic demand rather than exploitative export opportunities,” he said.

The government of Bangladesh must move away from its reliance on cheap labour if it is to ensure a rights-based development following its expected graduation from Least Developed Country (LDC) status, the UN poverty expert said.

“A country’s comparative advantage cannot lie in keeping its people poor,” he said.

“Bangladesh’s development has largely been driven by one export sector – the ready-made garment industry – which is highly dependent on keeping wages low,” he said.

The Special Rapporteur expressed alarm at the chilling effect on the ability of civil society to operate free of the Government's NGO Affairs Bureau and the Digital Security Act – under which journalists, human rights defenders, opposition politicians and academics have been detained for exercising their rights to freedom of expression and opinion.

“These developments will not only scare off the very investors the country is trying to attract, but they are also an obstacle to the realisation of economic and social rights,” De Schutter said.

“You cannot deliver health care, education or social protection without also improving accountability and transparency.”

During his visit, the expert travelled throughout the country and met with people living in poverty.

He noted that while Bangladesh has made remarkable progress in reducing overall income poverty, multidimensional poverty remains high and income inequality has increased, particularly in urban areas.

“Overall economic progress has been uneven, with groups such as the Adivasi, Dalit, Bede, Hijra and religious and linguistic minorities such as the Bihari left out,” the Special Rapporteur said.

“The Government has also carried out evictions in informal settlements under the guise of development, without following due process or providing adequate compensation and rehabilitation – in violation of the right to adequate housing,” he said.

De Schutter urged the government to rationalise its social protection system, which he described as “a patchwork of 119 schemes that emerge on an ad hoc basis, are poorly coordinated and do not provide the level of income security that Bangladeshis should expect”.

He expressed concern that the tax-to-GDP ratio was particularly low (at around 7.8 per cent) and that almost two-thirds of public revenue to finance social protection came from indirect taxation, while only one-third came from direct taxation on income.

“This should be reversed. It is high-income earners and large businesses that should contribute to the financing of public services and social protection, not consumers,” the expert said.

“Social protection programmes should be developed to protect the population from the new and significant risks posed by climate change,” the Special Rapporteur said.

He noted that in 2022 alone, 7.1 million Bangladeshis were internally displaced due to riverbank erosion, cyclones, floods, and other disasters, or because their livelihoods were threatened by water salinisation.

The mission included a visit to Cox's Bazar, where De Schutter visited the camps that have housed 977,798 Rohingya refugees most of whom fled the genocidal attack in neighbouring Myanmar in 2017.

While paying tribute to the government of Bangladesh for hosting nearly a million refugees in an already overcrowded country, he deplored the living conditions in the camps.

“Until the conditions for repatriation are met, the Rohingya must be allowed to live a decent and dignified life,” the expert said. “The Government of Bangladesh and the international community all have a role to play.”

The Special Rapporteur said it was “unconscionable” that international donors had contributed so little to the 2023 Joint Response Plan which calls for $876 million to address the urgent humanitarian needs in the camps, only 17 percent of which is funded.

Since March 2023, the World Food Programme has had to cut the value of its food vouchers from $12 to $10 per person, per month, and the value will be further reduced to $8 in June.

De Schutter warned that malnutrition and undernutrition would increase, with dramatic consequences, especially for children.

“Families are growing desperate. If the Government of Bangladesh were to recognise the right of the Rohingya to seek employment and earn an income, as required under human rights law, that would alleviate at least some of the pain,” the expert said.