7. Spatial politics of state and capital

Some of these new industrial facilities are located in so-called Economic Zones the Government of Bangladesh establishes since 2010 in addition to the eight Export Processing Zones (EPZs) that have developed already since the mid-1980s. As government already approved 97 Economic Zones across the country on 30,000 hectares land in total, the number of factories in the Economic Zones is likely to increase in the coming years. Companies are encouraged to relocate by the enhanced infrastructure in terms of electrical connections as well as road connection to ports, and – in the case of the Economic Zones – also by enormous fiscal and non-fiscal incentives[1]. A further incentive is that these new economic enclaves are governed by the ‘Bangladesh Economic Zones Act, 2010’ and that they are thus exempted from ‘Bangladesh Labour Law 2006’ that garment workers had successfully gone on strike for. Instead of organizing in trade unions, which the law from 2006 had made easier, the act for Economic Zones only provides for Workers Welfare Association (WWA). The latter, in contrast to trade unions, need approval of the Zone’s Executive Chairman, a high-ranking bureaucrat who is responsible for the smooth running of the Zone.

[1] These incentives are exemption from taxes, custom and excise duties, lifting of ceilings on Foreign Direct Investment, residence permit or citizenship for foreign investors, and financial infrastructure for easy capital flow among other facilities. For details, please see http://www.beza.gov.bd/investing-in-zones/incentive-package

Unsurprisingly, all developments in the RMG industry from up-scaling to spatial relocations in the outskirts of city peripheries or in the EPZs and Economic Zones are driven by the constant pressure of global garment brands for cheaper and faster production. This reduces profit margins for producers in Bangladesh to an extent that pushes many smaller ones into bankruptcy, while larger ones are compelled to grow, and to seek backward integration of production. Smaller factories that only ‘cut, trim and make’ still exist, but they are related to larger ‘composite factories’ within Bangladesh through an intricate web of subcontracting. The COVID-19 pandemic, the disrupted supply chains from China, but most importantly the unilaterally canceled orders from Western brands worth more than 3.7 billion USD in the spring of 2020, have not halted this development, but as it seems – have rather consolidated it.[2]

[2] Siddiqi, Dina M., “What the Pandemic Reveals: Workers’ Rights in Bangladesh and Garment Supply Chains”, Georgetown Journal of International Affairs September 3, 2020 https://gjia.georgetown.edu/2020/09/03/what-the-pandemic-reveals-workers-rights-in-bangladesh/