Tag: Economic Slowdown

Bangladesh May Replace China

Bangladesh May Replace China As Europe’s Apparel Source

By LokMarg

As China witnessing a decrease in its share of trade due to economic slowdown due to Covid implications, Bangladesh may overtake it as the source of most of the European Union’s (EU) apparel, reported The Daily Star.

According to Ahsan H Mansur, Executive Director of the Policy Research Institute, primarily it will be for the shortage of skilled labour (China’s demography as its population is decreasing) and secondly for Bangladesh producing high-end value-added garment items, that it may overtake China with regard to exports to the EU in the near future.

Even though China continues to hold the title of being the largest apparel supplier to the EU, the penetration of Bangladeshi garment items has been growing with rising demand for basic and value-added garments, reported The Daily Star.

Apparel shipments to the EU from Bangladesh grew by 41.76 percent in the January-October period of last year to USD 19.40 billion, helping to retain its position as the second largest garment exporter to the world’s largest trade bloc after China.

China has been losing its global apparel market share over the last couple of years mainly because of a shortage of skilled workforce, withdrawal of foreign investments, and an increase in production costs, reported The Daily Star.

Notably, the Chinese industrial production base is shifting from manufacturing to heavy and sophisticated technological gadgets involving mobiles and home appliances.

This is resulting in work orders being shifted from China to other Asian countries like Bangladesh, Vietnam, Thailand, Cambodia, India, and Pakistan.

Moreover, with workers quitting garment factories for higher salaries in the production of sophisticated items, Chinese garment manufacturers are experiencing a shortage in their skilled workforce, reported The Daily Star.

Also, garment manufacturers are unable to pay higher salaries as international clothing retailers and brands are unwilling to pay more for garment items.

In 2015, Bangladesh’s share in the global apparel market was 5.9 percent, and based on the country’s garment export data of 2021, the percentage has gone up to 6.5 percent.

The region-wise analysis also shows a decline in garment shipments from China.

For instance, in 2015, the market share of China in the EU apparel segment was 37 percent and in 2022, the percentage declined to 28.4 percent, according to a study by Sheng Lu, an associate professor of apparel and textiles at the University of Delaware.

Meanwhile, Bangladesh’s market share in the EU increased to 24 percent in 2022 from 18.5 percent in 2017, according to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

As per local exporters, another reason for work orders being diverted from China to Bangladesh is the recent tariff war between the US and China as international retailers and brands want a sustainable sourcing destination, reported The Daily Star.

Moreover, the remediation of garment factories with recommendations of the Accord and Alliance, two international inspection agencies, also fortified workplace safety measures in Bangladesh.

This ultimately brightened the image of the country and the sector itself for which international retailers and brands are coming up with increasing volumes of work orders.

Bangladesh is also shifting its production base to high-end value-added garment items from basic items, reported The Daily Star.

The local manufacturers are grabbing a bigger market share of garment items made from man-made fibers to obtain better prices and more work orders from international retailers and brands.

Over the last four and a half decades, the capacity of Bangladesh’s garment industry has also grown a lot, enabling it to cater to any quantity of work orders.

Not only this, the country’s primary textile sector, which includes spinning, dyeing, finishing, knitting, weaving, and sizing, has witnessed investments worth over USD 20 billion.

The primary textile sector is acting as the garment industry’s main supplier of raw materials locally, reported The Daily Star.

Moreover, work orders have also been recently shifting from other countries like India, Pakistan, South Korea, Vietnam, Sri Lanka, Myanmar, Ethiopia, and Cambodia as they are incapable of catering to orders for large volumes at competitive prices.

Bangladesh is already overtaking China in terms of exporting denim to the EU, said Faruque Hassan, President of the BGMEA.

“I am hopeful that we will overtake China in other product categories as well in the near future,” he told The Daily Star over the phone. (ANI)

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Deconstructing India’s New Citizenship Law

By Sanjoy Narayan

In an impassioned speech to mark the launch of his party’s campaign for the Delhi elections, Prime Minister Narendra Modi repeatedly assured Indian Muslims that the recently enacted Citizenship Amendment Bill (CAA) or the proposed roll-out of the National Register of Citizens (NRC) would not discriminate against those who were born in India. This comes in the wake of widespread protests, mainly by urban students, across India. The protests, including violent incidents leading to destruction of public property and clashes with police, spread across India, before being quelled.

What were the reasons for the sudden and spontaneous uprising by students? Mr Modi and his colleagues in the ruling Bharatiya Janata Party (BJP) attribute it to their political rivals, chiefly the Congress party, who they claim have provoked the agitations by the students in order to gain electoral advantage in the forthcoming state elections, notably in Delhi, which goes to the polls in early 2020. But Mr Modi’s critics and the student agitators believe that the CAA and, potentially, the NRC, discriminate against Muslims, while they favour almost all other religious minorities. The Act and the register, critics feel, will further marginalise India’s population of 200 million Muslims and turn the country into a majoritarian state, dominated by Hindus, which is contrary to the secularist tenet of the nation’s Constitution.

What exactly does the CAA intend to do? Primarily, the Act amends the existing Indian Citizenship law, which prohibits illegal migrants from becoming Indian citizens. The old law prohibits illegal foreigners who enter India without valid visas or travel documents from staying in the country and denies them Indian citizenship. Under the new Act, which Mr Modi’s government has formulated, there are exceptions to that law. Now, Hindus, Christians, Sikhs, Parsis, and jains (notably not Muslims), if they have genuinely immigrated from Pakistan, Bangladesh or Afghanistan, will be allowed to stay in India and can be eligible for citizenship if they live or work in the country for six years. The government believes that this will provide sanctuary to those who have fled other countries because of religious persecution.

What then is the controversy surrounding the CAA? The Modi regime’s critics argue that the new Act discriminates against Muslims and, therefore, goes against the secular principles in the Indian Constitution. By separating Mulsims and non-Muslims, the Act, critics feel incorporates religious discrimination into a law and that runs counter to India’s long-standing secular principles. If illegal immigrants from other religions are allowed to seek refuge legally in India, why not also the Muslims who are persecuted in other countries. People belonging to certain sects in Pakistan (Ahmadis, for instance) or in Myanmar (Rohingyas) face oppression and persecution in their countries. Why should they be denied sanctuary? they ask.

What is the controversy over the NRC? The NRC is a register of people who are able to show proper credentials to prove that they came to India before March 24, 1971, the eve of the formation of Bangladesh (formerly East Pakistan), which neighbours India. Initially, the register was introduced in Assam, which has for decades faced a problem of illegal immigrants from Bangladesh. Before the register was published, the BJP government had rooted for it but after it was found to be ridden by errors—millions, primarily Bengali Hindus, were excluded—it was scrapped and could now be re-framed. The CAA and the NRC are interlinked. Now, non-Muslims who were exclude from the register could seek citizenship and not face deportation, particularly in states such as Assam.

The Modi regime, led by Home minister Amit Shah, now wants to roll out the NRC across all Indian states. This would mean illegal immigrants would have to prove their credentials in order to be entitled to permission to stay on in India. Critics believe that coupled with the CAA this could discriminate against Muslims who have migrated to India and have been staying in the country for a long time. Non-Muslims who are not on the NRC could be protected by the CAA and, hence, seek citizenship by naturalisation, while Muslims who are on listed on the register would be denied the right to stay.

What is the provocation for the protests? The student agitation—which Mr Modi and his colleagues in government say is a movement by “urban Naxals” (a reference to the ultra-Left Wing violent uprisings that peaked in the 1970s)—is fuelled by the view that the new law would discriminate against the largest minority community in India (the 200 million Muslims in India make it the country with the largest Muslim population outside of countries that are Muslim dominated) and , therefore, not only violate secularist principles but drive in the wedge further between the Muslim minority and the Hindu majority. A citizenship law that is based on religious affiliation destroys the secularist fabric of India, critics argue. But the student protests have to be viewed from a broader perspective.

The trigger point for the recent agitation by students was the CAA and NRC and the first protests took place in or around the campuses of two Muslim-centric universities—Aligarh Muslim University in Uttar Pradesh and the Jamia Millia Islamia University in Delhi. They quickly spread to other universities in India where students empathised with the protesters and organised their rallies, marches and assemblies. However, there have been other build-ups to the actual protests. The Modi regime is viewed by students as being intolerant and non-secularist. In particular, students have been apprehensive about recent developments that have demonstrated discriminatory trends.

The crackdown in Kashmir where leaders were put under house arrest, and communication was blocked after the government repealed special status for the Muslim-majority state is one provocation for the restiveness that has come to prevail on Indian university campuses. The Babri Masjid verdict, which, in essence, gives the go ahead for Hindu activists to gain control over a plot of land where an old mosque stood (it was demolished by Hindu activists in 1992) and build a temple dedicated to the mythological figure, Rama, is yet another point of discord.

India’s students are a significant force. As much as 50% of Indians are below the age of 25 and in recent years many of them feel insecure both economically as well as socially. Unemployment rates are high (although authentic data are difficult to access in India); the economy has been slowing down; consumer demand and, as a consequence, investment by industry is at its nadir. Increasingly, this is making India’s youth disenchanted with the establishment. The recent protests could, thus, be a foretaste of more serious agitations. It is time the Modi regime took note of the stark writing on the wall.

When Economics Nibbles At Politics

By Mahendra Ved

Two of India’s most credible voices spoke as if in unison on November 29 and 30 at events organized by major media houses. Their well-meant, well-timed warnings are that the economy is in bad shape, something the government of the day is doggedly denying.

The oft-repeated phrase, “it’s the economy, stupid!” comes to mind, but it will not suffice. Bad economic management has combined with widespread perceptions of fear in political and social arenas.

The TINA (there is no alternative) factor that had emerged only six months ago after Prime Minister Narendra Modi and the alliance he leads won a bigger mandate than 2014 is sliding.  

Both, former premier Manmohan Singh and veteran industrialist Rahul Bajaj linked economic governance to a vitiated social climate. Fear, they said, was generated, not by those in power alone, but also by those who draw inspiration and support from them and act with impunity.

Singh’s warning was confirmed the very next day, doubly more than he had expressed last year. India’s gross domestic product (GDP) has fallen to 4.5 percent, the lowest in over six years, when Singh and his government, accused of policy paralysis, were in office. The GDP growth then was 8.5 percent. It had crossed ten at one time during his tenure.   

When Singh had last year darkly predicted a two percent GDP fall, then Finance Minister, late Arun Jaitley, had hinted at Singh’s going senile. Lawmakers and leaders of the ruling Bharatiya Janata Party (BJP) had been more direct in using harsh words.

Singh has been spared abuses this time – not that anybody in the government is taking his words kindly. The counter-response is only more resolute since the government apparently sees Singh straying into political arena by alleging that a “toxic combination of deep distrust, pervasive fear” is “stifling economic activity and hence economic growth”.  

More ire has been reserved for Bajaj, who has pierced through the bubble of India Inc.’s silence. To be fair, he was in the past critical of Singh’s economic management as well. And Singh, braving doubting Thomas all around in those early years, had been dismissive of that criticism. India’s entrepreneurial class is grateful to Singh, the reforms’ pioneer, whether or not they would admit it.

With formidable ministers Amit Shah (who is also the BJP chief), Nirmala Sitharaman and Piyush Goyal on stage, Bajaj spoke of corporates afraid to criticize government, of an environment of impunity for phenomena like lynching and of terror-accused Pragya Thakur’s political journey to Parliament with the BJP’s full backing and support.

The ministers, particularly Shah, denied or defended it all. He compared his government’s record with that of the Singh Government, of all things, on cases of lynching of Muslims and Dalits by vigilantes belonging to his party or its affiliates. Official figures prove his claim hollow. Shah has got to deny this since RSS Chief Mohan Bhagwat who guides his party has decried the very term ‘lynching’ as something alien to Indian culture.  

While building its industrial base, the Bajaj family has a history of speaking up against the government of the day, especially that of the Congress. Rahul B. dared fellow-captains of trade and industry at the conclave to speak up, but none responded. Only leading woman entrepreneur Kiran Shaw Majumdar has taken the cue from Bajaj.

Come to think of it, India Inc. hails most Budgets and praises most finance ministers, as long as its purpose is swerved. It has always moved cautiously, sensing the political climate before speaking out on economic issues. In recent memory, the year 2013 was one such time when the Singh Government was besieged with political protests.

Behind this new churning, unmistakably, there is the Maharashtra factor. Sharad Pawar has sewn together government of an unlikely alliance of known ideological adversaries united to keep the BJP out of the richest state. His emergence, like Bajaj (incidentally, both have their respective bases in Pune) has confounded many calculations and put some life into a beleaguered Opposition.

New Maharashtra Chief Minister Uddhav Thackeray has taken some decisions responding to public concerns like environmentalists’ pleas against felling trees in Mumbai’s wooded area and has announced withdrawal of cases against the Maoists imprisoned under stringent anti-terror laws. The controversial Indo-Japanese Bullet train project, half-way through, is slated to slow down, if not ended. The latter two issues are bound to cause friction with New Delhi.

But he has compulsions. By reinforcing continued adherence to Hindutva that he shares with the BJP, Thackeray has had to keep future political options open. He cannot afford to shed his ideological moorings strengthened along with the BJP over the last three decades. Friction with secular allies is in store.             

Significantly, the BJP slide in recent elections is not because of, but despite, a weak Opposition. It remains divided and has nothing to offer to the people. The recent months have witnessed the rise of regional forces, Pawar being the best and the most promising of the lot. 

The Congress remains in deep slumber, as if running on autopilot. It merely reacts to events, unsure at times about its stand, only to be bashed back by the BJP and its voluble social media supporters. The Gandhis are seen as doing a holding operation, ineffective in office and indecisive about their own role, even as the party gets reduced to third or fourth position.

There are other fears surrounding enforcement of law to detect ‘outsiders’ or ‘infiltrators’. Everyone but the die-hard BJP supporters (read Shah supporters) think this would open the Pandora’s Box. Potentially, just about anyone among the millions who migrate for work or due to a natural calamity can come under suspicion for lack of documents that prove his/her domicile status.

The Modi Government faces long-term decline in economic growth. The latest GDP numbers merely certify what has been experienced on the ground for a long time now. What is striking about the slowdown this time is that it hits the most vulnerable sections of the population. Agricultural distress combined with the disastrous demonetization experiment, has hurt those that serve as the real economic engine.

How far the Singh-Bajaj-Majumdar observations reflect and impact the public mood remains uncertain. It would be premature, if not naïve, to expect anything radical. It is a long grind.

Truth be told, Modi remains popular among large sections and his government/party wield greater money and muscle power than all opponents combined.    

But message is clear: National pride and religion certainly have their own place. But people want jobs and basic necessities first, over everything else. To revive the economy, Modi will have to review the social and political ethos and philosophy. Nothing less will help him and the country.

The writer can be reached at mahendraved07@gmail.com