Bangladesh faces a challenging year as it navigates the aftermath of an economic collapse and political turmoil. Last summer, protests led to the ousting of a long-term leader, pushing the country to the brink of chaos.
Recently, Bangladesh received troubling news when the United States imposed a proposed 37 percent tariff on its exports, a crucial source of revenue for the country. While President Trump later paused the tariffs following international backlash, concerns remain about their potential reinstatement, particularly among garment factory workers.
Murshida Akhtar, a 25-year-old garment worker from near Dhaka, recently secured a new job at 4A Yarn Dyeing, a factory in Savar, where she hopes to earn $156 a month. While she expressed excitement about her new position, she also voiced concern over the possible reduction of orders due to the tariffs.
Bangladesh, with a population of 170 million, has relied on its garment industry for economic growth since the 1980s. With approximately four million workers directly employed in garment production, many families, including Akhtar's, depend on this industry for their livelihood. The imposition of tariffs could severely impact this vital economic sector.
In response to the tariff threat, Muhammad Yunus, the interim leader and Nobel Peace Prize winner, recently appealed to the U.S. for a 90-day reprieve, offering to increase purchases of American cotton to alleviate trade imbalances. However, some economists criticized the tariffs as an abuse of power, especially as Bangladesh faces recessionary pressures.
Despite a previous period of growth, Bangladesh's economy is now under strain, exacerbated by the fallout from political upheaval. The garment sector, which constitutes 85 percent of the nation's exports, faces a dim outlook with the potential for a 10 percent tariff on all goods, in addition to the suspended 37 percent tariff.
Efforts to stabilize the economy are further complicated by pressures from the International Monetary Fund, which has urged the government to reduce subsidies and increase fuel prices. Meanwhile, Bangladesh's garment industry, which has made significant strides in safety and sustainability since the Rana Plaza disaster in 2013, is bracing for the potential economic fallout from these tariffs.
4A Yarn Dyeing stands out as an example of an evolving industry, focusing on higher-value products and maintaining foreign partnerships despite previous challenges. The factory recently survived a violent political uprising, showcasing the resilience of both the business and the workforce.
Amidst these challenges, industry leaders emphasize the essential role of the garment sector in Bangladesh’s economy, underscoring the notion that the country's labor force remains its primary asset.