Bangladesh
From a different perspective.

Bangladesh, a country of extremes. A population of 200, yet the second largest economy per capita in Southeast Asia. Known and infamous for its clothing industry and dramatic floods.

Trade then and now

From the very beginning, Bangladesh has been an agricultural economy with a small industrial base. Before the 20th century, there was no appreciable industry with exports other than jute.

Outsourcing
The big change started at the end of the last century. Globalization and massive outsourcing ensure that the production of clothing - i.e. labor - starts behaving like water: it flows to the lowest point. One of those lowest points is Bangladesh. The ready-to-wear industry transforms the economy; within a few decades it grows to 85% of total exports and generates employment for millions of people, mostly women.

CIA World Factbook sums it up succinctly: one of the fastest growing economies, significant poverty reduction, stable financial conditions and low government debt.

That is special, because the country the country suffers one setback after another. Almost half of Bangladesh is occupied by the Ganges delta with all its consequences. A humid, warm climate, a notorious monsoon with heavy rainfall, tropical cyclones and successive floods. In 1970, one of those cyclones - Bhola - leaves more than half a million victims behind - the greatest natural disaster in human history.

Garments industry

Bangladesh may now be known as a low-wage country full of "sweatshops", but Bangladesh's textile industry dates back some 2,000 years. It was a global success story, now a fringe business with a lousy image.

The following story about "Dacca muslin" is a summary of "The ancient fabric that no one knows how to make" by Zara Gorvett for BBC Future.

Dacca muslin
At the end of the 18th century, a new fashion in Europe leads to an international scandal: women from high society begin to appear naked in public. The culprit is "Dacca muslin", a precious fabric imported from Dhaka, the capital of present-day Bangladesh. In a satirical print, women appear in long, brightly colored muslin dresses, clearly showing their buttocks, nipples and pubic hair.

Still, Dhaka Muslin is a hit with those who can afford it. It is the most expensive fabric of the time, worn by Queen Marie Antoinette, Empress Joséphine Bonaparte and Jane Austen. At the time, a yard of Dhaka muslin fetched prices ranging from £50-400, according to Islam – equivalent to roughly £7,000-56,000 today. Even the best silk was up to 26 times less expensive.

Worldwide exports
Dhaka muslin is made with the yarn from a special cotton plant that grows along the banks of the Meghna in the Ganges delta. Some say the plant was imported from Mosul, Iraq, where the fabric was first discovered by European traders - hence the name.

Long before Dhaka muslin was draped over aristocratic women in Europe, it was sold across the globe. It was popular with ancient Greeks and Romans, as described in visit reports of an Egyptian merchant about 2000 years ago. In the centuries that follow, the fabric is praised in travel reports of Berber-Moroccan and Chinese explorers.

Europe
European traders find the quality of the “Dacca muslin” better than the one from other parts of the subcontinent and first exports to Europe are a fact. Documents show that in 1787 “muslin fabrics” worth several million rupees are shipped all over the world through the port of Sonargaon.

Colonial disaster
In 1793, the British East India Company (EIC) conquered what was then Bengal and less than a century later, the entire region is under British control. But while Victorian Londoners were fawning over the fabric, those who produced it were being pushed into debt and financial ruin: 

• First the company replaced the region’s usual customers with those from the British Empire.

• Then they came down hard on the industry, pressuring the weavers to produce higher volumes of the fabric at lower prices.

• As weavers struggled to keep up with these demands, they fell into debt. They were paid upfront for the cloth, which could take up to a year to make. But if the fabric was not considered to be up to the required standard, they would have to pay it all back. 

• They could never really keep up with these debt repayments.

The end
The final blow comes from European competition. For years, the British documented every step of making the fabric down to the smallest detail. When European demand for luxury fabrics increased, the need to make cheaper versions closer to home grew. In Lancashire, textile baron Samuel Oldknow combines the knowledge of the EIC with the very latest technology - the spinning wheel - to supply Londoners with huge quantities. It was the end of Dacca muslin.

In the 20th century, Dhaka muslin has disappeared from every corner of the world. The technique of making it has been forgotten and the only cotton plant that can be used -Phuti karpas- is dying out.

Jute

History
During the American Civil War, Lincoln blocks the ports of the southern Confederate states. The blockade reduces the supply of cotton from America by 90% and forces British factories to look for an alternative. Jute is relatively cheaper and can be made in a British colony. When the British receive large orders from the Netherlands to make sacks for the sugar that is sourced from Java, they choose neighboring Bengal as a location for jute cultivation and industry.

Today
It is the beginning of a gigantic industry, which becomes a global monopoly and generates half of export income. Bangladesh currently produces a third of the world's jute production, but exports almost exclusively raw jute - only 10% of total exports.

Our experiences

"Our experiences" are impressions gained during my work for Dutch and international government agencies, which deal with economic development in emerging countries, especially in the field of trade promotion. To better interpret those experiences, it is advisable to first read "Trade, not aid".

In 2003, the EU decides to abolish import quotas from all member countries of the WTO. This measure also applies to China, which joined WTO two years earlier. It could have disastrous consequences for Bangladesh and Vietnam, China's direct competitors. Reason enough to start a program. 

* World Trade Organization

My first acquaintance with the country is surprisingly positive: normally, we queue at immigration in endless queues, but at Dhaka airport there is a special "Buyers" queue. We show our business cards and receive a warm welcome.

Through our liaison BGMEA*, sector experts have already made an initial selection of 25 companies, so it is time for a visit.

*Bangladesh Garment Manufacturers and Exporters Association

Recipe for disaster
A typical garment workshop in Bangladesh is a building with four to eight floors. Holes have been punched in one corner of all floors. Incoming fabrics are hoisted through the holes to the top floor and stored. From there, the confection process - washing, cutting, trimming, sewing, packing - goes down one floor at the time until the packaged product arrives on the ground floor.

The holes in the floors weaken the building's structural strength; overloading with heavy rolls of fabric can lead to collapse. And this happens in 2013 with 150 deaths as a sad result.

Two days later we see another extreme. Although not a company in our target group, but definitely one that can serve as a benchmark: Youngone Ltd, an investment by Korea tycoon Kihak Sung in the Korean Export Processing Zone in Chittagong. 

It employs 6,000 people, 3,000 women in the ready-to-wear department and 3,000 men in the shoe department, led by an Austrian CEO.

Youngone's clothing workshops are maintained according to world class standards. No fiddling with social responsibility, working conditions and other EU "non-tariff barriers" here. Youngone has its own fire brigade, provides free lunch, transport and medical care and a hospital with six delivery rooms; these are just a few examples of the fringe benefits in this company.

After extensive market research and intensive guidance on European non-tariff barriers, we take companies to two trade fairs in Europe. There, the garments experts provide contacts and follow-up. We will continue to do this for another two or three years: European buyers do not like opportunity seekers.

Back in Bangladesh, companies share their experiences with all members of the BGMEA. An annual evaluation follows with sector experts for five years. After five years, the balance is drawn up and we investigate who is still exporting.

At present, Bangladesh is successfully competing with other countries. Of course, the added value is minimal: sweatshops in Bangladesh can bill at most €16-20 to make a dozen jeans, which sell for €80 each in Europe. But employment is being offered and that is a dire necessity, because the country is at the bottom of the SouthEast Asian list in South-East Asia in terms of comparative advantages.

Shipbuilding . . . . . . 

Even more than the Netherlands, Bangladesh is a country dominated by water, because of the Ganges delta. That also explains the thriving shipbuilding industry that the country has had for centuries. During the 17th century, Chittagong's shipyards even built warships for the Sultan of Turkey. A major innovation in shipbuilding was the introduction of a recessed deck design on Bengali rice barges, resulting in hulls that are stronger and less prone to leaks compared to the weak hulls of European vessels built with a stepped deck design.

The Royal Navy has many warships built in Chittagong, some of which were used in the Battle of Trafalgar in 1805.

There are currently about 50 shipyards, a considerable number of them workin for European and American customers. Dutch Damen Shipyards Group plays an important role in this.

 . . . . and shipwrecks

A horror movie
Most private shipyards use plates, engines, parts and machinery from old merchant ships that have been collected from the scrapping of existing ships. We visited the infamous beach in Bhatiari, where ships come to their end at full steam, in 2004 - see pictures below.

The road from Chittagong to Bhatiari is an experience in itself. For miles you see companies on both sides of the road, where everything - absolutely everything - is sold from the ships, perfectly sorted by material or application. A few kilometers of electro, then hoses and pipes, then wooden materials, steel plates and finally complete interiors of captain's cabins in Louis XIV style.

The beach looks like a scene from a horror movie. Mud and rubbish everywhere, hundreds of workers dressed in rags, busy with the demolition. Suddenly we hear singing: a group of twelve workers carry a gigantic sheet of steel on their shoulders to a truck singing to the beat of their steps. A little further on, a man crouches with deformed fingers, taking mercury from thermometers: he himself and everything around him is green . . . . .