A crucial player in the $55bn global fast fashion industry, Bangladesh faces an uncertain future after weeks of protests toppled Prime Minister Sheikh Hasina’s government in August, leaving hundreds dead. With production stalled due to a nationwide internet blackout, major brands like Disney and Walmart have already shifted production elsewhere for next season.
Political unrest continues, with 60 factories around Dhaka expected to close due to worker protests demanding better wages. This turmoil could result in around 20 per cent drop in garment exports, which make up 80 per cent of the country's export revenue. Even before the unrest, Bangladesh's garment sector was struggling with child labor scandals, deadly accidents, and pandemic-related challenges. Rising production costs, shrinking profits, and a weak economy, exacerbated by excessive infrastructure spending and cronyism, further destabilized the country’s financial system.
DrAhsan Mansur, Governor, Central Bank is focused on repairing the financial damage but warns it will take time, with an IMF bailout likely needed. Business leaders are concerned about falling foreign currency reserves, which hinder the import of raw materials for garment production.
The root of the protests, however, lies in deeper socio-economic issues. Accounting for millions of jobs, factory workersare struggling on wages below the national minimum, leading many to join student-led demonstrations. Young graduates lack of well-paying jobs, as the education system fails to equip them with the necessary skills.
The new interim leader, Nobel laureate Muhammad Yunus, is tasked with reviving the economy, diversifying beyond the garment sector, and tackling corruption. His challenges range from managing international relations to mitigating climate change impacts. Despite this, many are hopeful that Yunus can bring much-needed reforms to stabilise Bangladesh's future.
