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June 24, 2010

Bangladesh's Garment Factories Reopen After Violent Protests

Hundreds of garment factories near the capital of Bangladesh, Dhaka, are up and running again amid heavy police protection following a wave of protests over wages.

Earlier this week, angry workers took to the streets, smashing vehicles and throwing rocks at factories, forcing many to shut down. Riot police and protesters clashed, injuring hundreds of striking employees, many of whom are the lowest paid in the world.

Workers demanded the minimum wage to be raised from $25 to about $70 a month. The rate has not been raised since 2006, despite a sharp rise in living costs.  But Bangladesh's garment exporters say the industry will be hurt if labor costs rise to this level.

The head of the Bangladesh Garment Manufacturers and Exporters Association, Abdus Salam Murshedy, said they are waiting for a government appointed board on minimum wages to submit its recommendations.   

"Whatever the committee and government will decide and finalize, our members will definitely follow this," Murshedy said.

But it is not clear if the wage board's recommendations will be acceptable to workers, who criticized the last pay revision as too small. Labor unions say rising food prices are particularly hurting the poor in one of the world's poorest countries.     

Bangladesh's garment factories export mainly to the United States and Europe.  The thriving sector has grown into one of the country's main industries as low labor costs have helped exporters sell at competitive rates.  

Business is improving following the global recession, said garment association leader Murshedy.   But he added the recession has affected the industry.

"Price has dropped down, and on top of that cotton price is high, but our ultimate garment price has not been increased," Murshedy said. "So we are under tremendous pressure from price point of view."  

As in many South Asian countries, Bangladesh's garment industry is the largest employer after agriculture. About two million people work in garment factories -- most of them women. The industry earns nearly $12 billion annually, and is the country's largest source of foreign exchange.