Protests and Factory Closures: Bangladesh`s Fast Fashion Industry Faces a Turning Point 👗🛑

Bangladesh, once a thriving hub for the global fast fashion industry, is now grappling with an uncertain future. The garment sector, valued at $55 billion annually and responsible for 80% of the nation’s exports, has long been the backbone of its economic transformation. Factories in Bangladesh have supplied major brands such as H&M, Zara, and Gap, contributing to the country’s elevation from one of the world’s poorest to a lower-middle income status. However, a series of recent crises has placed the industry in jeopardy. Weeks of violent protests led to the downfall of Sheikh Hasina’s government in August, leaving the country in turmoil. Hundreds were killed in the unrest, and factories were set ablaze, causing brands like Disney and Walmart to reconsider their reliance on Bangladesh for their products. As the nation struggles with ongoing disruptions, including factory closures and internet blackouts, industry experts warn that Bangladesh’s once robust garment sector may face a 10-20% drop in exports this year. Competitors like Vietnam are becoming more attractive to international brands.

Even before the political upheaval, Bangladesh's economy was under strain. The garment industry had already been marred by child labor scandals, deadly factory accidents, and the economic fallout of the Covid-19 pandemic. The rising costs of raw materials and manufacturing, coupled with weakening global demand, have significantly reduced export profits. With dwindling foreign currency reserves, Bangladesh is finding it harder to pay for vital imports of materials from countries like India and China. Rampant corruption, cronyism, and mismanagement under the previous administration have further weakened the nation’s financial system. According to Bangladesh’s new central bank governor, Dr. Ahsan Mansur, years of poor governance have left the country in need of financial support, including another IMF bailout. He acknowledges that the road to recovery will be long and difficult. The garment industry, though a significant job creator, has also been at the center of labor unrest. Factory workers, often earning less than half of the national minimum wage, have joined student-led protests demanding better pay and working conditions. Many workers have been forced to take out loans just to feed their families, and unions are now calling for a doubling of wages to reflect the rising cost of living.

For Bangladesh to move forward, experts say economic diversification is key. The country cannot rely solely on the garment industry to sustain its growth. Previous efforts to create higher-paying jobs tourism or tech have failed, with projects like the abandoned technology park in Dhaka standing as a stark reminder of missed opportunities. Bangladesh’s new interim leader, Muhammad Yunus, a Nobel laureate known for his work with micro-loans, faces immense pressure to stabilize the economy, reform institutions, and address the frustrations of the country’s educated yet unemployed youth. Diversifying the economy and attracting foreign investment while addressing corruption and red tape will be critical steps. As Bangladesh navigates these challenges, many citizens are looking to Yunus for hope and lasting change. ⚡ Image Credit: GettyImages