Dhaka Act Terrorizes Apparel Sourcing Community

Industry news

Dhaka Act Terrorizes Apparel Sourcing Community

In the past few months, before July, there have been many reports in the media about the progress of the Bangladesh textile and apparel industry – how Bangladesh has emerged the top three suppliers of apparel to the world. There have been reports – some encouraging like booming exports, while some not so encouraging – like the slow progress on safety conditions in the country’s apparel factories. But clearly, the industry was moving on the path of progress post Rana Plaza building collapse three years ago.

However, the Dhaka terror attacks could change the scenario for the worse. The heinous terrorist attack in Dhaka’s high security area of Gulshan is barbaric, shocking to say the least. The attack quenched the religious fanaticism of a few, but in reality, it was undoubtedly an attack on the economic progress of the country and on the 162 million poor Bangladeshis. The country whose economy largely depends on the growth of the apparel sector would obviously take the biggest hit. Apparel industry earns US$ 26 billion annually from exports, accounts for over 80% of the country’s total exports, and is the largest employment generator. Today, all renowned international apparel brands, retailers and buying houses have a strong presence in Bangladesh. Many of the victims were related to the apparel industry and this has deeply terrorised the apparel buying community.

Following the attacks, countries across the world have issued security alerts to their personnel deployed in Bangladesh. Foreign companies who have offices or work in Bangladesh have issued notices to their employees to be on high alert, travel plans have been put on hold. Buyers may probably not alter their sourcing decisions or reduce sourcing from Bangladesh immediately, but only if the current security lapse is taken care of. No retailer would like to sell clothes soaked in their employee’s blood. The local industry has already expressed concern on losing business following the strong reaction from the buying community. Buyers have been working with the textile and apparel industry despite many problems – political upheavals, frequent strikes, gas and power shortages, lack of infrastructure, security issues. But terrorist attacks aimed at foreigners may put them on the back foot.

The latest terrorist attacks may also jeopardize economic growth of the country. Bangladesh, due to its low cost labour had begun attracting foreign investors to set up apparel and textile factories. These plans may be postponed. South Asian regional coordination through BBIN may go on the slow track.

All the forward steps that the country has taken in the past could retract if strict measures are not initiated immediately. Bangladesh may be the top three suppliers of clothes to the world, but there are too may global developments that could hurt its positioning, given the current situation.

TPP is on the horizon. Vietnam is already strongly competing with Bangladesh in apparel exports. The Indian government has recently announced a slew of measures to support textile exports. China remains a sourcing destination for apparel buyers. Therefore, Dhaka has to tackle the terror issue urgently with a strong hand, and assure the international community’s safety on its land. Not only that, the government has to take a strong stand to protect the country and the economy, to be able to progress towards being a developing nation.