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Broken Seams: Bangladesh’s Economic Reckoning

Updated: Oct 18

Sixth Episode of “Global Canvas” from JOI

Imagine the streets of Dhaka, once bustling with the hum of industry, now filled with the echoes of protest. What began as a plea for fair job opportunities has unravelled into something far deeper. In 2024, Bangladesh found itself at a crossroads, shaken by mass protests that exposed not just dissatisfaction with a job quota system but a much larger, systemic issue—one that has long been brewing in the nation’s sweatshops. While these factories have fueled the country’s rapid economic growth, they have also entrenched stark inequalities. The protests have laid bare the fragile foundation of Bangladesh’s development model and sparked debates about its future trajectory, both economically and geopolitically.


Context and Background


The protests began on July 15, 2024, with university students demanding reforms to Bangladesh's government job quota system, which reserves 56% of jobs for select groups, including descendants of 1971 freedom fighters, women, ethnic minorities, and people with disabilities. This system left only 44% of positions open to merit-based candidates, sparking widespread dissatisfaction. As protests intensified, leading to around 400 deaths and violent clashes, the unrest expanded into a broader indictment of the country's economic structure, particularly its reliance on low-wage sweatshop labour.


Bangladesh’s garment industry, accounting for 80% of its exports, became a focal point amid the unrest. The sector employs millions but depends heavily on cheap labour, making it vulnerable to both domestic instability and international scrutiny. The industry, which generates approximately $55 billion annually, faces an uncertain future as brands reconsider their reliance on Bangladesh due to the instability. Mohiuddin Rubel of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) warned that these developments would "impact the confidence level of brands" globally.


Key Players and Stakeholders

The students and labourers leading the protests have drawn attention to the economic inequalities perpetuated by Bangladesh’s reliance on sweatshops. Their demands for job reforms have expanded to include calls for better labour conditions and fair wages within the garment industry. The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and factory owners are increasingly concerned about the potential loss of export contracts, as major buyers like H&M and Zara reconsider their reliance on Bangladesh amidst the ongoing unrest.

International human rights organisations and Western retailers are scrutinising Bangladesh’s labour practices, and competing nations like Vietnam stand to benefit from any shifts in the global supply chain.. Some predict that Bangladesh could lose 10-20% of its garment export revenue this year due to the political instability. Meanwhile, Indian exporters have already suffered losses of approximately ₹20 crore (US$2.4 million) as trade disruptions and border closures prevent shipments and payments from being processed.


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Major Concerns and Consequences

The protests have exposed the vulnerabilities in Bangladesh’s economic model, which relies heavily on the low-cost production of garments in sweatshops. The ongoing unrest has disrupted production, and if it continues, international buyers may shift their supply chains to more stable countries. Rising production costs and the increasing scrutiny of labour practices are further adding to the economic pressure.

Beyond the garment industry, the protests have sparked broader debates about Bangladesh’s development strategy. While the country has lifted millions out of poverty through its export-driven growth, this model relies on systemic exploitation, leaving much of the population vulnerable. If international buyers abandon Bangladesh for other markets, the country could face a sharp decline in exports, leading to widespread job losses and deeper economic instability.


From a geopolitical perspective, Bangladesh’s instability poses significant risks to its trade relations and its standing as a key player in the global economy. The country’s development model, once praised for its rapid growth, now faces intense scrutiny. Western nations and international bodies are urging Bangladesh to reform labor conditions and ensure greater economic sustainability.


In response to the escalating protests, Prime Minister Sheikh Hasina resigned on August 5, 2024, amid mounting pressure. Her resignation came after weeks of unrest, and reports indicate she was moved to a secure location after landing at Hindon Airbase in India, her original plan to travel to London delayed due to the unfolding political crisis.


Political Perspectives and Understanding

Through a realist lens, the unrest in Bangladesh underscores the risks posed by internal instability to global supply chains. The protests threaten to disrupt the country’s largest export industry, undermining its economic stability and weakening its position in global trade.

A constructivist perspective would examine the protests in the context of Bangladesh’s historical development and the evolving expectations of its population. The job quota system, initially intended to address historical inequalities, has been challenged by a younger generation seeking merit-based employment opportunities. The resulting economic turmoil suggests that Bangladesh’s development model may no longer align with the aspirations of its people.


From a critical theory perspective, the protests highlight how Bangladesh’s development model has been shaped by global capitalism. The sweatshop model, while fueling economic growth, has also perpetuated exploitation and inequality. This case underscores the need for more equitable development strategies that prioritize human rights and labour protections over short-term economic gains. Bangladesh will need to find a way to balance the demands of its domestic population with the expectations of the global market.


Takeaways

The 2024 protests in Bangladesh have exposed the fragile foundation of the country’s economic success. While the garment industry has driven rapid growth, it has also entrenched inequality and exploitation. As the protests continue, Bangladesh must confront the limitations of its development model and address the underlying social and economic grievances that sparked the unrest. The future of the garment industry—and Bangladesh’s economy—will depend on the country’s ability to enact meaningful reforms that prioritize labour rights and long-term sustainability.

For students of geopolitics, this case highlights the complex relationship between economic development, labour practices, and political stability. The protests in Bangladesh serve as a reminder that economic growth, if built on exploitation, is unsustainable in the long run.


Compiled by Commodore (Dr) Johnson Odakkal (with support from Ms Ruchita Gaikwad and Ms Supriya Mishra) 

Stay Tuned for More!

As the Global Canvas series continues, we will explore more key moments where politics and economic shifts intersect. For more insights, visit us at www.johnsonodakkal.com or email us at ceo@johnsonodakkal.com 

References and Sources

  • [BBC News] 



  • [Mint]  



  • [Economic Times]  



  • [BBC News] 



  • [The Hindu]



  • [Reuters]



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