Around 4 million workers from Bangladesh's ready-made garments have been contributing to income growth of their companies, families as well as national economy as a whole for decades. But they face peril now, as export orders cancel or as companies lay off going out of business.
The unpaid wages of workers is not only their right, turmoil, unrests or protests caused by workers as a result can also cause danger for the country as a whole in the further spread of the COVID 19 disease.
In a recent statement in India for example, Noble Prize winners Amartya Sen, Abhijit Banerjee and Esther Duflo opined that a lockdown can be only ensured there if food security is ensured for the public, similar situation persists in Bangladesh.
In this regards, below are options for the government and private actors to consider to pay-off these workers their entitled dues.
Bangladesh Workers Welfare Fund
As of news end of 2019, more than Taka 300 crore has been deposited into the workers welfare fund, out of which only around 10% of the fund has been utilized by the fund. Government needs to urgently look into mobilization of these funds for support to eligible workers via a vulnerability analysis via either a cash transfer programme and / or a food ration card system.
Vulnerable workers may includee.g.those already laid off, or are unable to receive salaries due to business loss, have become unemployed and / or single earners in their families, female headed household members, casual or temporary workers, workers with disabilities, etc.
A Taka 5,000 crore stimulus package has been offered by the government at a subsidized interest rate of only 2% to export oriented companies to pay off wages of workers up-to three months per eligible and interested company.
Freezing and Liquidation of Company Assets by the State
While some companies are showing concerns that they do not have money to pay unpaid wages to workers due to cancelled orders, business loss, etc., what they need to realize is that just like a bank debt never goes away, workers' unpaid wages' debt is something they are legally liable for too.
For companies that are incapable or unwilling to cooperate with different measures by government as such to pay off their debt wages to workers, government should immediately look into freezing and then liquidation of the company's fixed as well as current assets by the state for wage repayment of the workers.
Wage Disbursements and Cash Transfers Mechanisms
World Bank documents as of December 2018 reported that 99% of ready-made garments workers (RMG) used mobile banking (MFS) for sending salary to their homes in the villages. However the report also mentioned, that majority of workers were doing over-the counter transactions instead of having personal MFS accounts.
Currently, opening a MFS also require workers to have national IDs, which some workers do not have. But in the export-oriented garments sector, it is a regular practice to check for either workers' national IDs or birth certificates for age verification against child labour.
Government in this regards can facilitate the following options also to overcome the above challenges:
Coordinate with mobile banking (MFS) companies to also allow workers to open MFS accounts with not only national IDs but also birth certificates. This will also help people transfer money as needed easily during this COVID 19 lockdown, especially to villages, where number of regular banks' branch coverages are low otherwise.
Look into a mechanism of utilizing local government mechanisms such as Ward Councils, and Union Digital Centres in the Union Parishads, and partnerships with MFS companies to help facilitate workers to open personal MFS accounts. Currently, there are more than 4,500 Union Digital Centres in Bangladesh.
Allow workers to nominate personal MFS accounts of their direct family members also to receive the wage disbursements.
In this state of extreme crisis, its not enough to follow standard rules. One must be able to act pro-actively and ensure that the most vulnerable don't suffer. Its easy to overlook the problems of the poor now as there is less scope for attention but as incidents are showing, workers have started to protest as in Gazipur. One must ensure that this doesn't became a major problem when Bangladesh can do with a bit less of a problem.
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