Among the main characteristics which brands look for when entering a sourcing destination are political stability. Stability brings confidence and certainty and allows brands and retailers to plan long-term. The last thing any brand wants is to be shifting from one sourcing destination to another.
Here is an example: China. In the past 18 months, serious concerns have been raised about the province of Xinjiang, due to issues around forced labour and the repression of the Uyghur Muslim population.
I am not here to discuss the rights or wrongs of Xinjiang but what I can say is that as a direct consequence of these issues coming to the fore, fashion brands and retailers now have a huge headache on their hands. The reason is that the US has subsequently banned all products entering the country which contain cotton from Xinjiang. This creates huge problems for brands which use Xinjiang cotton but it also creates a challenge for brands sourcing any apparel from China, as much of the cotton used to feed China''s textile industry is from Xinjiang.
China, the world''s largest exporter of apparel, is not the only competitor of Bangladesh which has political instability right now. Ethiopia was viewed as a threat to Bangladesh not so long ago. Its business model was seeking to replicate our own—exporting cheap ready-made garments and competing heavily solely on price.
But now Ethiopia is also causing brands and retailers to have sleepless nights. Until last year, the country had relative political stability in comparison to other countries on the notoriously unstable African continent. It was selling itself as an investment hub for textile manufacturers, creating a number of business parks which have attracted customers such as H&M, PVH and Gap.
However, recent months have seen violent conflict in Ethiopia''s northern Tigray region. This has been fuelled by ethnic power politics and is threatening the country''s political and economic stability. According to some reports, the violence has likely killed thousands of people, including many civilians, and displaced more than a million people internally.
Many commentators are now suggesting that the scale of the conflict could scare off foreign investment in Ethiopia''s garment industry. Some brands have already been forced to close some of its production units and this kind of instability is the last thing Ethiopia needs at a time when it is trying to develop its fledgling garment sector. Why would brands look at sourcing from there given the political instability and associated reputational risk of sourcing from a war-torn country?
In fact, everywhere I look, in terms of the competitive landscape for Bangladesh''s RMG sector, I see challenges for brands. Even neighbouring Myanmar has problems, and the issues there typify the challenges brands face when looking to source from developing countries. Myanmar only began exporting garments again in 2012 as the country had previously faced economic sanctions following a military coup in 1988. Many brands have begun sourcing from Myanmar since that time and, again, commentators have suggested Myanmar is a competitive threat to Bangladesh.
Again, however, political instability has reared its head. In fact, the current war between government forces and the ethnic Rakhine Arakan Army in western Myanmar is believed by some to be the most serious by far of the country''s numerous, decades-old internal wars, with some of the most intense fighting seen in years. After the conflict escalated in early 2019, the government ordered a strong military response and designated the Arakan Army as a terrorist organisation. Such measures appear to have made matters worse, and problems and instability in Myanmar continue. What brands will make of all this, who knows?
Do we have our own problems in Bangladesh? Of course, we do. No country is perfect. But compared to our key competitors, it is fair to say that Bangladesh is pretty stable right now and has been for many years. Full scale safety remediations after the tragic Rana Plaza has transformed Bangladesh into probably the safest apparel sourcing country. The country also has the highest number of green garment factories in the world. It has an abundance of trained workers, strong backward linkage, infrastructure, logistics and the entrepreneurial know-how.
Brands know what they are getting with Bangladesh. They know they can be in for the long haul as our country has for decades proved itself to be a reliable, low risk partner for apparel sourcing; such partners are becoming increasingly difficult to find in an uncertain world.
These are important issues which need bringing to the fore at a time of change. Over the next few months, maybe beyond, brands will be reassessing supply chains as business picks up again after Covid-19. The industry is, in many ways, in a state of flux.
Our country, its leaders and its business owners must strike while the iron is hot to once again make our case as the trading partner of choice. Political instability among competitor sourcing destinations and pandemic chaos has only strengthened our hand in a world where brands and retailers more than anything crave certainty, familiarity and business continuity.
As Bangladesh will continue to be the world''s preferred destination for apparel sourcing, brands and retailers should strengthen their partnerships with Bangladeshi apparel manufacturers to best serve themselves. It will be a win-win for both the buyers and manufacturers. While the journey will be longer, the best thing all the passengers could do is enhance cooperation and partnership to make it more successful.
Source: The Daily Star, Bangladesh Monday, 25 January 2021