DHAKA, Bangladesh – While international trade has the potential to greatly reduce poverty in developing regions, workers at the beginning of the supply chain in developing countries are often subjected either to subpar working conditions or unequal competition in global markets. The BRAC, the world’s largest non-government development organization, has established a model in Bangladesh that works to fight those conditions.
The BRAC was established in 1972 with the goal of organizing and employing people in extreme poverty. Its method is simple: organize poor communities using their own resources, and enable them to create their own supply structures and manage their own industries. Today, the BRAC employs over 100,000 people and has a presence in 14 countries around the world.
One of the BRAC’s fair trade success stories is that of the Bangladeshi retail chain Aarong, which, in the wake of the 2013 Rana Plaza collapse (considered the deadliest garment-factory accident in history), has been a source of optimism for those hoping for safer working conditions and higher wages in developing regions.
Aarong was founded in 1978 and has grown into one of Bangladesh’s largest retailers, earning annual revenues of $60 million. It was originally established to provide opportunities for marginalized rural artisans to work for living wages and to distribute their products at competitive prices. Aarong currently employs 65,000 people, 85 percent of whom are women. Through collaboration with local charity foundations and NGOs, the foundation is able to provide basic social services to their staff, including healthcare, skills training, childcare and legal counseling.
One of the organizations Aarong collaborates with, the Ayesha Abed Foundation, is able to offer its workers skills training, living wages and job security, characteristics that rarely define working conditions in countries like Bangladesh. For example, in 2013 the minimum wage in Cambodia (whose economy is similarly dependent on garment production) was $80 a month, far below the $157 that its government determined to be a living wage. When, in December 2013, the government had still failed to increase the minimum wage substantially, the country’s garment workers went on strike. On January 3, 2014, state security forces shot and killed five striking workers, and union leaders began to be charged and imprisoned for inciting violence.
While a number of brands, including Nike, Gap and Adidas, decried the situation in Cambodia and called for safer working conditions and adjusted wages, market forces will continue to draw them to regions where labor is fractured and cheaply available. The BRAC has created a model with which it is able to operate independent of those forces, and has demonstrated that healthy labor conditions are attainable if supply structures are developed to accommodate local communities.
It’s important to remember that the BRAC is a non-profit and doesn’t operate in the same way that private organizations do. It is 70 to 80 percent self-funded, and thus is able to resist the market forces that drive multinational corporations into cheap and unorganized labor markets. Regardless, the essential elements of the BRAC’s model—living wages, competitive prices, and safe working conditions—and its mission to liberate, rather than subjugate people through work ought to characterize the organization of supply chains in developing countries.
Success stories like that of the BRAC ought to be celebrated by those suffering from subpar working conditions abroad as well as workers here in America. For poor workers abroad, its success inspires hope for domestic manufacturers’ ability to compete with multinational corporations. For Americans, healthy foreign labor conditions weaken the economic incentive for companies to outsource jobs to foreign markets and increase workers’ bargaining power with respect to wages. Those are results the United States should strive to make a focus of its policies abroad.
– Zach VeShancey
Sources: Business Fights Poverty, New York Times, BRAC, World Bank