Bangladesh Garment Industry
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Questions and Answers

What does the article argue about the innovative strategy of binding cost-sharing accords?

  • It has primarily benefited developed market economies
  • It has been more successful than other state and non-state efforts in improving worker rights (correct)
  • It has created downward pressure on wages and working conditions in developing countries
  • It has led to increased lead firm consolidation in the agriculture and apparel supply chains

    • What is illustrated by the Accord on Fire and Building Safety in Bangladesh?

  • The dynamic of the sourcing squeeze and a binding, cost-sharing accord to address the problem of exclusion of worker’s rights (correct)
  • The negative impact of global trade regimes on developing countries
  • The success of lead firm consolidation in the apparel supply chain
  • The comparison of working conditions in different sectors in Bangladesh

    • What was the cause of the Rana Plaza collapse in 2013?

  • Gains in building safety
  • Poor working conditions and union-avoidance (correct)
  • Low wages and limited work intensity gains
  • Pressure from international organizations

    • What has the Accord on Fire and Building Safety achieved in Bangladesh?

    <p>Dramatic gains in building safety</p> Signup and view all the answers

    What forced lead firms in agriculture in the United States to pay a 'fair food premium' on covered produce?

    <p>Farmworkers' initiatives</p> Signup and view all the answers

    What is essential for the success of initiatives in global supply chains, according to the text?

    <p>Buyers' direct involvement in negotiating accords with labor</p> Signup and view all the answers

    What is required for sustainable socially responsible production in global supply chains?

    <p>Buyers being legally bound to share the cost of socially responsible production</p> Signup and view all the answers

    What do Global Commodity Chains (GCCs) entail?

    <p>A 'world-scale division of labor' and interorganizational networks linked within the world-economy</p> Signup and view all the answers

    What do firms in supply chains, particularly the 'buyer,' have according to the text?

    <p>The greatest power in the apparel sector</p> Signup and view all the answers

    What has led to a squeeze on prices paid to farmers and workers by large agricultural corporations and supermarket chains?

    <p>Consolidation of purchase of food products</p> Signup and view all the answers

    What contributed to the consolidation of buyer leverage at the top of apparel supply chains?

    <p>Changes in the retail industry</p> Signup and view all the answers

    What led to major restructuring in the global apparel industry, forcing countries to push down production costs?

    <p>Trade liberalization and China's entry into the WTO</p> Signup and view all the answers

    What has increased power imbalances in apparel supply chains?

    <p>Consolidation of buyers and dispersion of suppliers resulting from changing trade rules</p> Signup and view all the answers

    What is a result of the 'price squeeze' in apparel supply chains?

    <p>Buyers constantly seek to lower the price paid to suppliers</p> Signup and view all the answers

    What corresponds to a decline in the real dollar price paid for apparel imported into the United States?

    <p>Decline in respect for workers' rights</p> Signup and view all the answers

    Who is particularly affected by the trends in global supply chains?

    <p>Women and girls</p> Signup and view all the answers

    What percentage of a living wage do prevailing wages in major apparel exporting countries fail to cover?

    <p>50%</p> Signup and view all the answers

    What percentage of supplier factories accepted orders whose price did not allow them to cover their production costs?

    <p>52%</p> Signup and view all the answers

    What did Bangladesh's ready-made garment sector account for in the country's exports in goods and services in 2015?

    <p>76.33%</p> Signup and view all the answers

    What does the sustainability of the RMG sector in Bangladesh have a profound impact on?

    <p>Overall economic conditions in Bangladesh and the wellbeing of millions of people</p> Signup and view all the answers

    What can offer insights into approaches that might work in other countries facing similar challenges?

    <p>Understanding the causes of problems in Bangladesh's garment sector</p> Signup and view all the answers

    What is the governance structure of the Accord on Fire and Building Safety in Bangladesh?

    <p>It includes a Steering Committee comprising representatives chosen by trade unions, company signatories, and an ILO representative.</p> Signup and view all the answers

    What action did the Accord on Fire and Building Safety take regarding factories with structural safety concerns?

    <p>Temporarily evacuated 50 factories and terminated 96 factories for failing to implement required safety renovations.</p> Signup and view all the answers

    What is the budget of the Accord on Fire and Building Safety per year?

    <p>Approximately US$11 million per year.</p> Signup and view all the answers

    What is the primary focus of the European Parliament resolution regarding Bangladesh?

    <p>Highlighting the persecution of trade union leaders and poor working conditions.</p> Signup and view all the answers

    What has the ILO urged Bangladesh to do regarding labor laws?

    <p>Align its labor laws with international standards, especially by allowing unionization in export processing zones and facilitating the unionization process in the RMG sector.</p> Signup and view all the answers

    What is the responsibility sharing arrangement in addressing workers' rights violations in Bangladesh?

    <p>Suppliers, the government, and buyers share responsibility.</p> Signup and view all the answers

    What did the European Parliament resolution emphasize about Bangladesh?

    <p>Persecution of trade union leaders and poor working conditions.</p> Signup and view all the answers

    What did the ILO urge Bangladesh to do specifically regarding unionization?

    <p>Allow unionization in export processing zones and facilitate the unionization process in the RMG sector.</p> Signup and view all the answers

    What has the Accord on Fire and Building Safety achieved in Bangladesh?

    <p>Made significant progress in building safety, covering over 2 million workers and involving international brands and retailers in a binding agreement.</p> Signup and view all the answers

    What did the European Parliament resolution highlight in relation to Bangladesh?

    <p>The persecution of trade union leaders and poor working conditions.</p> Signup and view all the answers

    What does Article 22 of the Accord on Fire and Building Safety ensure?

    <p>Participating brands and retailers negotiate commercial terms with their suppliers to maintain safe workplaces and comply with upgrade and remediation requirements.</p> Signup and view all the answers

    What were Bangladesh’s top export products to the United States in terms of apparel?

    <p>Men’s and boy’s cotton trousers</p> Signup and view all the answers

    What was the average Free on Board (FOB) price in 2016 according to the survey conducted in Bangladesh?

    <p>US$4.64</p> Signup and view all the answers

    What was the percentage decline in lead times since 2011 according to the survey findings?

    <p>8.14%</p> Signup and view all the answers

    What was the monthly minimum wage in Bangladesh prior to the Rana Plaza disaster?

    <p>Taka 3,000 per month (US$39)</p> Signup and view all the answers

    By February 2018, what was the hourly minimum wage in Bangladesh?

    <p>US$31 cents per hour</p> Signup and view all the answers

    What was the percentage decline in profit margins between 2011 and 2016 according to the survey results?

    <p>13.3%</p> Signup and view all the answers

    What was the percentage decline in the average nominal euro-per-kilogram price of imported t-shirts into EU-28 countries?

    <p>5.18%</p> Signup and view all the answers

    What was the percentage decline in prices paid for imported trousers by supply chain lead firms between 2013 and 2017?

    <p>11.48%</p> Signup and view all the answers

    What was the percentage increase in cotton prices between 2015 and 2017?

    <p>22.13%</p> Signup and view all the answers

    What was the percentage decline in the price point for exports to the United States according to the survey conducted in Bangladesh?

    <p>10.67%</p> Signup and view all the answers

    What was the percentage decline in the price point for European buyers according to the survey conducted in Bangladesh?

    <p>9.04%</p> Signup and view all the answers

    What is the prevailing wage in Bangladesh according to the text?

    <p>Below the minimum wage of all other major competitors</p> Signup and view all the answers

    What was the percentage decrease in profit margins for factories in Bangladesh from 2011 to 2016?

    <p>13.3%</p> Signup and view all the answers

    What was the minimum wage in Bangladesh after the Rana Plaza incident?

    <p>US$68 per month</p> Signup and view all the answers

    What is the prevailing wage in Bangladesh estimated to cover in terms of living expenses?

    <p>14% of living expenses</p> Signup and view all the answers

    By what percentage did lead times for factories to make and ship products reduce since 2011?

    <p>8.14%</p> Signup and view all the answers

    What is the most exported item to Europe from Bangladesh?

    <p>T-shirts</p> Signup and view all the answers

    What was the percentage decline in Free on Board (FOB) price for factories in Bangladesh from 2011 to 2016?

    <p>7.79%</p> Signup and view all the answers

    What is the primary reason for persistently low wages in Bangladesh's garment sector?

    <p>Pricing squeeze</p> Signup and view all the answers

    What was the percentage decline in the price of imported trousers to the United States since Rana Plaza?

    <p>13%</p> Signup and view all the answers

    What is the prevailing wage in Bangladesh estimated to cover in terms of living expenses?

    <p>14% of living expenses</p> Signup and view all the answers

    What is the prevailing wage in Bangladesh estimated to cover in terms of living expenses?

    <p>14% of living expenses</p> Signup and view all the answers

    What was the percentage decrease in profit margins for factories in Bangladesh from 2011 to 2016?

    <p>13.3%</p> Signup and view all the answers

    What was the minimum wage in Bangladesh after the Rana Plaza incident?

    <p>US$68 per month</p> Signup and view all the answers

    What is the governance structure of the Accord on Fire and Building Safety in Bangladesh?

    <p>It is governed by a Steering Committee comprising representatives chosen by trade unions, company signatories, and an ILO representative.</p> Signup and view all the answers

    What is the budget of the Accord on Fire and Building Safety in Bangladesh per year?

    <p>US$11 million</p> Signup and view all the answers

    What action did the Accord on Fire and Building Safety take regarding factories with structural safety concerns?

    <p>Temporarily evacuated 50 factories and terminated 96 factories for failing to implement required safety renovations.</p> Signup and view all the answers

    Study Notes

    Power Imbalances and Sourcing Squeeze in Global Supply Chains

    • Large agricultural corporations like Chiquita and supermarket chains like Walmart have monopolized the purchase of food products, leading to a squeeze on prices paid to farmers and workers.
    • Changes in the retail industry contributed to the consolidation of buyer leverage at the top of apparel supply chains, displacing smaller retail outlets.
    • Trade liberalization and China's entry into the WTO led to major restructuring in the global apparel industry, forcing countries to push down production costs.
    • The consolidation of buyers and dispersion of suppliers resulting from changing trade rules has increased power imbalances in apparel supply chains.
    • This imbalance resulted in a 'price squeeze' where buyers constantly seek to lower the price paid to suppliers and a 'lead time squeeze' where buyers demand shorter production periods.
    • Most apparel production occurs in countries with the highest violations of freedom of association, and the decline in respect for workers' rights corresponds to a decline in the real dollar price paid for apparel imported into the United States.
    • Women and girls are particularly affected by these trends in global supply chains.
    • Prevailing wages in major apparel exporting countries fail to cover even 50% of a living wage, and many factories fail to pay even the legal minimum wage.
    • 52% of supplier factories accepted orders whose price did not allow them to cover their production costs, impacting building safety in global garment supply chains.
    • Bangladesh's ready-made garment sector accounted for 76.33% of the country's exports in goods and services and 13.64% of its GDP in 2015, with 4 million direct workers and millions more indirect beneficiaries.
    • The sustainability of the RMG sector has a profound impact on the overall economic conditions in Bangladesh and the wellbeing of millions of people.
    • Understanding the causes of problems in Bangladesh's garment sector can offer insights into approaches that might work in other countries facing similar challenges.

    Workers' Rights and Building Safety in Bangladesh

    • Bangladesh has been urged by the ILO to align its labor laws with international standards, especially by allowing unionization in export processing zones and facilitating the unionization process in the RMG sector.
    • In December 2016, 1,600 garment workers were dismissed and 34 trade unionists were arrested, leading to pressure from labor rights advocates and international brands to release the detained workers and respect workers' rights.
    • The European Parliament passed a resolution in June 2017, highlighting the persecution of trade union leaders and poor working conditions in Bangladesh.
    • Violations of workers' rights have increased since 2000, with fluctuations corresponding to export pricing trends.
    • Suppliers, the government, and buyers share responsibility in addressing workers' rights violations in Bangladesh.
    • The Accord on Fire and Building Safety in Bangladesh has made significant progress in building safety, covering over 2 million workers and involving international brands and retailers in a binding agreement.
    • Article 22 of the Accord ensures that participating brands and retailers negotiate commercial terms with their suppliers to maintain safe workplaces and comply with upgrade and remediation requirements.
    • The Accord's governance structure includes a Steering Committee comprising representatives chosen by trade unions, company signatories, and an ILO representative, ensuring worker participation and decision-making.
    • The Accord has a budget of approximately US$11 million per year and has hired and trained engineers and safety personnel to ensure the safety of factories and workers.
    • The Accord has temporarily evacuated 50 factories due to structural safety concerns and terminated 96 factories for failing to implement required safety renovations.
    • Building evacuations and recommendations are submitted to the government of Bangladesh Review Panel, with the possibility of being overturned by unanimous decision.
    • Accord inspectors had d... (text incomplete)

    Workers' Rights and Building Safety in Bangladesh

    • Bangladesh has been urged by the ILO to align its labor laws with international standards, especially by allowing unionization in export processing zones and facilitating the unionization process in the RMG sector.
    • In December 2016, 1,600 garment workers were dismissed and 34 trade unionists were arrested, leading to pressure from labor rights advocates and international brands to release the detained workers and respect workers' rights.
    • The European Parliament passed a resolution in June 2017, highlighting the persecution of trade union leaders and poor working conditions in Bangladesh.
    • Violations of workers' rights have increased since 2000, with fluctuations corresponding to export pricing trends.
    • Suppliers, the government, and buyers share responsibility in addressing workers' rights violations in Bangladesh.
    • The Accord on Fire and Building Safety in Bangladesh has made significant progress in building safety, covering over 2 million workers and involving international brands and retailers in a binding agreement.
    • Article 22 of the Accord ensures that participating brands and retailers negotiate commercial terms with their suppliers to maintain safe workplaces and comply with upgrade and remediation requirements.
    • The Accord's governance structure includes a Steering Committee comprising representatives chosen by trade unions, company signatories, and an ILO representative, ensuring worker participation and decision-making.
    • The Accord has a budget of approximately US$11 million per year and has hired and trained engineers and safety personnel to ensure the safety of factories and workers.
    • The Accord has temporarily evacuated 50 factories due to structural safety concerns and terminated 96 factories for failing to implement required safety renovations.
    • Building evacuations and recommendations are submitted to the government of Bangladesh Review Panel, with the possibility of being overturned by unanimous decision.
    • Accord inspectors had d... (text incomplete)

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    Description

    Global Supply Chains and Workers' Rights in Bangladesh Quiz: Test your knowledge on power imbalances, sourcing squeeze, and workers' rights in global supply chains, with a focus on the garment sector in Bangladesh. Explore the challenges faced by workers and the progress made in building safety, labor laws, and unionization efforts.

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