Gender Equality, Competitiveness and Expert Performance in the Garments sector in Bangladesh:

In the last couple of decades, gender equality have marked significant decline over the years across countries. This has led to better opportunities for women in the countries undergoing industrialization especially in the labour intensive industries in developing countries. It is, however, generally believed that a country may gain a competitive edge due to gender inequality manifesting lower female wages. This apprehension has led to inclusion of this agenda into a wider range of topics related to basic labour standards. Rich countries have insisted on inclusion of binding rules within WTO to deal effectively with fundamental workers’ rights. Developing countries on the other hand, have resisted these moves in the fear that high-income countries may take recourse to protectionist trade measures against foreign competition accusing their low cost competitors of abusing labour standards.

According to a very recent discussion paper titled “Gender Inequality and Trade” presented at the Hamburg Institute of International Economics by Matthias Busse & Christian Spielmann “there is a positive linkage between comparative advantage in labour-intensive goods and gender wage inequality and a negative link 37 _{The Bangladesh Labour Code, 2006, s.176-183.}

with respect to gender inequality in labour market participation rates and access to education. While the links between trade and gender inequality in labour market participation rates and educational attainment are somewhat weaker, depending on whether all countries or just developing countries are included or whether a particular trade indicator for comparative advantage has been used, the clearest link (in terms of statistical significance) can be established regarding the gender wage gap, as firms may exploit wage discrimination to gain or enhance a comparative advantage in labour intensive products.”

Bangladesh scenario:

Female workers in Bangladesh were traditionally linked to global markets through export of tea and raw jute. It is only with the emergence of the RMG sector in the late 1980s as Bangladesh’s leading export industry that the country’s female labour force was integrated into international markets in a more direct and intense way. The transition from traditional to non-traditional export-oriented activities is of considerable significance, because it brings out some critical dimensions of the evolving pattern of female employment in Bangladesh. First, RMG a manufacturing activity differs from the previous agro-based exports. Second, RMG units are concentrated mostly in urban areas, whereas earlier female intensive processing industries were located in the rural areas. Third, the rapid growth of the RMG sector and its increasing share in the export basket testifies the importance and potential of female employment in exports, as well as industrialization in Bangladesh. These three features inter alia, have important implications from a gender perspective, particularly in terms of employment opportunities, skill development and wage level.

Recent studies indicate that women in Bangladesh constitute the majority of the incremental labour absorption in the country’s export-oriented manufacturing enterprises. It is also generally believed that cheap and readily employable female labour underpins the competitive advantage of Bangladesh’s export sector. To understand the nature of women’s employment in Bangladesh we therefore need to

examine the factors that contributed to the feminization of manufacturing employment here. Is it the gender gap in the effective wage structure that underpins the growth of female labour in Bangladesh? Are they paid less than men for similar jobs even when productivity differentials are accounted for? Why the entrepreneurs prefer to employ young, single, literate women? Does this preference stem from supposedly lower wages of women or other non-wage factors such as their social docility and amenability to repetitive process functions? Available information suggests that conventional measures of gender bias such as wage gaps, access to employment and lack of job security are relatively less conspicuous in organized segment of the manufacturing sector in Bangladesh. Let us test the above context though a case study. Newage Group is a leading exporter of RMG from Bangladesh that employ over 4000 people, 70% of whom are females. Given below is a table that shows the employment in their three production facilities broken down into groups of various skills. The last column of the table shows the discrimination index of average wages of the various groups of employees as compared with their male counterparts.

A look at the above table reveals that the male employees generally have wage advantage over the females. With some exception the discrimination is more prominent in the employees of higher skill level and reduces as the skill level reduces. Helpers of both genders who are at the bottom of the skill ladder enjoy same level of wages whereas male supervisors possessing high levels of technical and managerial skills enjoy a 21% wage advantage over their female counterparts. The equivalence of wages at the helpers’ level is perhaps a result of the minimum wages for non-skilled labours fixed by the government and enforced by very strict monitoring mechanism of the buyers to ensure compliance with their code of conduct. On the other hand, Better labour management skills of the male supervisors perhaps account for a part of their discriminatory wage level. For the rest of the production staff, the wage discrimination is only 3% to 12%. As wages is only about 11% of total cost (see table below), a 3% to 12% wage advantage of a section of workers would result in 0.33% to 1% comparative advantage in the cost of production and perhaps less than 0.3%

comparative advantage at the retail value of the product, a very insignificant amount indeed.

The above example convincingly reinforces the thought that conventional measures of gender bias such as wage gaps are relatively less conspicuous in the RMG sector in Bangladesh. The example is quite representative of the entire export- oriented RMG trade in Bangladesh where the non-wage factors such as docility and amenability to repetitive functions clearly have more influence in the employment pattern. The sustainability of current trends in female labour absorption in the organized manufacturing sector is linked to the broader issues of competitiveness of the industry. The major source of creation and protection of industrial competitive advantage in the global economy lies in the adaptation and diffusion of new technologies, which lead to growth in the productivity of factors of production. It is thus important to endow women workers with basic education and vocational training including computer literacy. Female oriented investment in human resource development may therefore be the most dependable deterrent to technological redundancies. Alternatively, with the changing nature of national competitive advantages, a mismatch may emerge between the skill and quality endowments of the female labour and the skill and the quality endowments demanded. Under these circumstances, if certain supply side constraints are not addressed through public policy interventions (e.g. the areas of skill development and healthcare), female employment in the export sector can not be maintained and enlarged – in absolute and relative terms.

Empowerment of women is a precondition to reduce gender discrimination. The first step to empowerment is to ensure access to education. Female education got boost in Bangladesh in the last decades perhaps because the country has been ruled by successive governments in the last fourteen years headed by women prime ministers. Even today the head of the government and the leader of the opposition in Bangladesh are both women. The affirmative policy of the government ensured free education for girls up to grade 12 compared to grade 5 for boys. Making women education free up to grade 14 is presently under active consideration of the government. Girls are now at par with boys in terms of enrollment in primary and secondary education in Bangladesh. GOB initiated stipend scheme in the 90s for female secondary school students that helped achieving gender parity. While the government’s affirmative policy measures with respect to free primary and secondary education is helping to reduce the gender gap, the commendable work of some leading NGOs like BRAC, ASA and several others led by Grameen Bank in providing micro-credits to the women has opened up a new vista in the empowerment of the rural women in Bangladesh. Thus education and access to finance, the two most important endowment factors responsible for empowerment of women in this country seem to have been well taken care of. As a result we have witnessed emergence of a conducive social structure that has provided to the women of Bangladesh increased purchasing power and respect from family members. The process has also resulted in delay in marriages and popularization of Planned Parenthood. The GOB policy providing for reserved seats in the local governments at Union level (a Union is made up of a few villages) has ensured participation of women in the local administration. Moreover, in the metropolitan areas, women have been successfully taking part in election for ‘wards’ (a geographic boundary in cities) as Ward commissioners. These positions are powerful and exercise considerable authority. Mobility is another useful indicator of empowerment of women. The RMG sector that currently employs around 2 million workforces had an important role in promoting this mobility. Almost 70% of these RMG workers are women and most of

them have migrated to the urban areas from their villages. A large number of women work in the NGOs and many of them provide bicycles and motor cycles to women workers creating positive role models. During the last national election, the NGOs worked to encourage women voters to vote by identifying rural constituencies where women were denied their right to vote and intensifying efforts in these areas by holding discussion meetings in the community, with religious leaders and government officials focusing on discussions to dispel superstitions that were adversely affecting women’s participation in the electoral system. As a result, the general election held in 2001 witnessed the highest turn out of voters, a whopping 74% in which more women cast their votes than men. We have earlier referred to the findings of Matthias Busse & Christian Spielmann in their paper titled “Gender Inequality and Trade” presented at the Hamburg Institute of International Economics. According to them there is a positive linkage between comparative advantage in labour-intensive goods and gender wage inequality and a negative link with respect to gender inequality in labour market participation rates and access to education. In their paper they established a clear link in terms of statistical significance with regard to the gender wage gap, as firms may exploit wage discrimination to gain or enhance a comparative advantage in labour intensive products. We have also seen in the case example cited above that this comparative advantage for the RMG sector in Bangladesh is not very significant. Bangladesh is perhaps a rare exception in its group of least developed countries in respect of gender wage gap. The authors in the same paper expressed apprehension that the linkage between gender inequality and comparative advantage in labour intensive goods may prompt imposition of sanctions – on an international level – on commodities from countries with poor fundamental labour standards, such as high gender inequality in wage remuneration. Supporters of this position, who usually come from high-income OECD countries, argue for connecting trade and labour standards, if possible within the WTO framework, thereby punishing developing countries that do not observe basic standards. The effectiveness of trade sanctions as an instrument is highly questionable. In a large number of cases, the authors found

that countries do not change their behavior because sanctions have been imposed on them. What is more, this instrument focuses only on export industries and does not tackle gender bias in other areas. Trade sanctions may thus drive females to other sectors with potentially even lower labour standards as happened in Bangladesh with removal of child labour from the RMG sector It was also apprehended that inclusion of labour standards in the WTO framework may even be exploited by high-income countries to protect their markets against allegedly “unfair” imports from poorer countries with lower standards. This is exactly what the developing countries fear, as high-income countries like the EU are still calling for discussions for links between trade and fundamental workers rights like gender discrimination. The EU brought this issue forward at the WTO conference in Doha in November 2001, but the attempt was rejected by several developing countries.

Consequently, all parties agreed that the issue of core labour standards would remain in the sphere of influence of the ILO. Since trade unions, human rights activists and some governments of high-income countries show an ongoing interest in the matter, it is highly likely that the issue of gender inequality will reappear on the international trade policy agenda.