Part 1 of 4 in our research series
As earth’s wealthiest nations watch their economies struggle under the onslaught of coronavirus, many are failing to notice an even more threatening swell on the horizon.
Fragile nations and emerging markets, most of which are still early in their contagion curves, loom as potential epicenters of unimaginable tragedy — tragedy that could make the virus’ progress thus far seem mild by comparison.
As of this writing, the number of confirmed coronavirus cases worldwide has topped 1.8 million with over 117,000 deaths. Its transmission has been concentrated in wealthier countries like the USA, Spain, Italy, and France, where the many brands and retailers’ storefronts are located. However, behind every major brand is a far-reaching and interconnected global supply chain, each with hundreds or thousands of factories and vendors spread across the world. These factories are located in low-income countries, where they provide a living for people in densely populated urban areas. Thousands of workers gather in factories during the day, putting them in close contact with each other. When the coronavirus takes hold in such countries and facilities, the rate of transmission could be devastating.
Bangladesh is the world’s eighth most populated nation, with nearly 165 million people and a staggering population density of 1,265 people per square kilometer — also the eighth-highest on earth. Vendors and factories employ millions of workers in the apparel industry, which accounts for 84% of the country’s export revenue. The purpose of this article is to explain, using data and industry insights, a perfect storm of risk factors for mass contagion in Bangladesh and other low-income countries whose economies depend on garment and apparel manufacturing. It will also answer the urgent question:
As brands and retailers, how can we prepare our supply chains to protect workers and help prevent a potentially catastrophic death toll?
A perfect storm
Even the strongest healthcare systems can be blindsided by a pandemic. Examples of this are unfolding in real time before our eyes. Take the healthcare system in the USA; in a comparison of 191 countries, the World Health Organization (WHO) ranks the USA as 37th in the world for healthcare. Bangladesh is 88th, with a significantly less robust health system:
|Health System Rank||Nation||Efficiency Index*|
Despite its relatively high efficiency index, the US healthcare system has groaned under the pressure of sharp spikes in cases. For instance, workers in US hospitals have struggled to stay safe using limited personal safety equipment, and ventilators and other equipment have been in short supply. Consider that the US has a gross domestic product (GDP) per capita that is 34 times greater than that of Bangladesh.
Similarly, the US economy is plummeting into waters of uncertain depth due to the pandemic. The USA has seen around 10 million of its citizens file for unemployment in just 2 weeks, and some analysts predict the unemployment rate could rise as high as 40 percent in Q2; for scale, the peak of US unemployment during the Great Depression was 25 percent. High-income countries like the US are either rapidly approaching the peaks of their viral cases or are now past them, with brands, retailers, and businesses eagerly awaiting a tentative reopening date sometime in the summer or fall.
In a low-income country like Bangladesh, where goods are manufactured, the virus has not yet begun to spike. Despite the high population densities of its bustling cities, strict social distancing measures so far seem to have been effective in mitigating COVID-19’s spread.
However, the lockdown cannot last as long as in high-income countries. Bangladesh’s economy is partly tethered to those of the countries for whom it produces, and its factories are shutting down as brands’ storefronts close. When the time comes for high-income countries to lift their lockdown mandates, their storefronts will reopen, demand will surge, and Bangladesh’s factories will begin production again. Many factories will simply have to do so economically, regardless of whether conditions are safe for workers. And because Bangladesh is still early in its COVID-19 curve, this will all likely occur when it is in the throes of an outbreak, making recovery difficult.
“The virus, which emerged in Asia and spread to the West, is at risk of ricocheting back,” writes The New York Times. Yet the story will not be the same in Bangladesh as for high-income countries. While places like the USA have the privilege of government assistance and stimulus packages, such resources are scarce in places of production. For many workers in Bangladesh, a day without work is a day without food for their families. Hence, when faced with either risking infection or starvation, they will choose infection. They have no choice.
Unfortunately, there is little in the way of reassurance from the world around them. Although it has been suggested that warm temperatures may hinder the virus, evidence indicates that its high transmissibility easily overrides any barriers posed by weather. The recent G20 Leaders’Summit did not result in any promising statements, and foreign investments have in many cases been relocated to more stable markets.
A report by ACAPS presents three potential scenarios for COVID-19 containment, along with their associated probabilities of occurring:
- Global containment (very low probability): In the best-case scenario, global containment measures are periodically relaxed and re-imposed. Healthcare systems are largely maintained, and yet humanitarian aid is scaled down and poverty worsens.
- Partial containment (moderate probability): Healthcare systems handle the load in most high-income countries and economies cautiously restart around July. In middle- and low-income countries, the death toll grows as containment flounders. Humanitarian aid is scaled down or suspended.
- Limited containment (moderate probability): Global death rates soar, most governments maintain strict no-movement orders, and authoritarian governments enact repressive measures. Skyrocketing poverty increases civil unrest, and humanitarian aid is severely limited.
Given the fact that conditions worsen for the world’s poorest populations in all three scenarios, the need for early risk mitigation in Bangladesh is even clearer. We — brands, retailers and anyone else with supply chains overseas — now have an opportunity and a duty to step up and implement safety and health protocols in our supply chain facilities. This proactive measure will prove vital as the virus migrates in the coming months. However, the danger is that high-income countries will continue to be so “focused internally that they take their eyes off a potential disaster-in-the-making among fragile states and emerging markets,” according to Atlantic Council.
We have tools and resources available to do this. The factories we depend on are potential breeding grounds for outbreaks, and as the following profile makes clear, the resulting loss of life could be unlike anything in recent history.
Bangladesh: a closer look
Known for its subtropical monsoon climate and its location on the Brahmaputra River Delta, Bangladesh has become a major hub for garment and apparel fabrication in Southeast Asia. It is a low-income country, with an average monthly income of $146 USD and a GDP of $286 billion. Its human development index (HDI; a metric of a country’s development as the geometric mean of a long and healthy life, knowledgeability, and gross national income per capita) is 0.614, ranked 135th in the world.
Dhaka is Bangladesh’s capital city and its main hub for manufacturing. The city’s population of 14.4 million enables textile, apparel and garment fabrication facilities to operate, many of which are located in and around the city. Dhaka’s extreme population density of 23,234 people per square kilometer introduces a unique set of infrastructural challenges for the city; however, leading brands investing in Bangladesh’s garment industry have opened up major opportunities for employment among this large population. Apparel exports are a significant portion of the country’s economy: $9.3 billion in 2020, with an expected growth rate of 7.0% annually. Among all workers in the country, 20.53% are employed in manufacturing.
The economic impact of coronavirus in Bangladesh, even in its early stages, has been harsh. Among the 4.1 million workers in the country’s garment industry, over a million are now out of work, and the number is rising by the day. As overseas buyers face crippling lockdowns in their home countries and are forced to halt purchases from Bangladeshi suppliers, 58% of factories have had to stop or nearly stop production. Mark Anner, director of the Center for Global Workers’ Rights, writes, “The immediate impact on workers and their families will be devastating…. Workers will have trouble putting food on the table”. The slowdown is currently disrupting over $3 billion in garment orders, according to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), which is working with international companies to facilitate continued purchasing from Bangladeshi partners.
It won’t be long before Bangladesh faces its own severe outbreak. As of this writing, the country has had 1,012 cases and 46 deaths, with the first reported cases on March 9.1 However, a leaked Country Preparedness and Response Plan memo has provided a chilling forecast of what is to come based on modeling and globally accepted parameter assumptions:
Though this memo did not specify a timeline on its 2 million-death figure, an international team of US and Bangladeshi researchers independently estimated up to 500,000 COVID-19 deaths between March and May alone (United Nations Interagency). Such numbers will quickly saturate Bangladesh’s already weak health system, resulting in critically ill patients going untreated. In workplaces and hospitals alike, a lack of personal protective equipment, poor practices for controlling infection, and high densities of people and patients will impede safety. The memo notes that lockdown alone cannot reduce the number of infections, and instead urges adoption of a six-point plan that includes widespread risk communication and continued social distancing measures.
This is where brands and retailers can play a role in curbing the devastation in Bangladesh. By ensuring that factories are safe for workers, it’s possible to avoid supply chains becoming a site for rampant exposure — exposure that each worker would then bring home to their family and community. Furthermore, the presence of the Rohingya refugee camps in Bangladesh, where over 1 million displaced people live in cramped conditions with negligible health care and sanitation, makes the country even more vulnerable. We must take every step to ensure our Bangladeshi supply chains aren’t culprits for putting lives at further risk.
A call to the industry
With the high population densities, weak healthcare system, close working quarters, lack of foreign aid, and limited government resources in Bangladesh and similar countries, it is clear what could befall people there. To help, we must come together — this emergency requires an alliance.
Brands and retailers have the opportunity to not only continue providing a living to millions of people, but to protect lives both in and outside of their partner factories by implementing COVID-19-specific safety measures. This crisis will one day pass. How we treated and took care of our partners will determine our reputation at the end of it. “You cannot control many things at the moment,” writes the Sourcing Journal, “but you can ensure you have a reputation that can last, because that goodwill may be the most important currency left to trade”. Brands and retailers will also face a new level of consumer scrutiny over safety measures, and will be held responsible for outbreaks in their supply chains.
Inspectorio offers Rise platform to help in the fight against COVID-19
Knowing what we do about the current situation in the places of production, how can brands and retailers reactivate their supply chains without restarting the coronavirus pandemic?
The solution is to quickly implement vital health and safety readiness programs at all factories, continuously monitor compliance with these guidelines, and provide corrective action and preventive action (CAPA) plans and training to facilitate continuous improvement. However, most organizations do not have the needed resources or tools to execute these measures with the speed and scale required to deal with this crisis.
This is where Inspectorio can help. Our Rise platform is uniquely positioned to help protect factory workers on a global scale:
- We have been collaborating with leading brands, retailers and international NGOs to assemble a library of COVID-19 workplace guidelines based on overlapping or equivalent best practices from a diverse range of current industry standards..
- Our real-time monitoring and reporting provides brands and retailers with instant updates on how their overseas partner facilities are complying with important health and safety initiatives.
- It is now becoming critical to be able to view up-to-date COVID-19 data trends and compliance information side by side. Our Rise platform features a COVID-19 Sourcing Dashboard that puts real-time COVID-19 and compliance data in one place, letting brand and retailer teams make better-informed sourcing decisions.
- As facilities submit assessments within the Rise platform, it automatically generates the CAPA reports that include automated recommendations for corrective actions, as well as didactic e-learning courses to facilitate continuous improvement.
- Our comprehensive Analytics dashboard helps brands and retailers understand which facilities need improvement, as well as what type they need.
We all have a responsibility to help workers avoid risk in our partner facilities. Inspectorio is doing our part — but we need you. Millions of lives can be protected if we work together and we do it now.
For more information on Inspectorio’s library of COVID-19 Workplace Readiness guidelines and the Rise platform:
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