The lethal price of sweatshop development
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The lethal price of sweatshop development

It has been ten years since an eight-storey commercial building housing several textile factories on the outskirts of Dhaka, Bangladesh, collapsed on April 24, 2013. The collapse of Rana Plaza claimed the lives of 1,134 people and severely injured 2,000 more, most of them women.

It was the deadliest industrial disaster since the 1984 gas leak that killed more than 3,000 people in Bhopal, India, and the worst accident in the modern history of the textile industry. Thousands of workers were trapped beneath the rubble for several days, with many succumbing to hunger and dehydration while others resorted to drinking their own urine to survive.

The building was constructed atop a filled-in pond using substandard materials, rendering it unable to support the weight of heavy machinery. The upper four floors were added illegally, further exacerbating structural issues. But the building's owner, Sohel Rana, insisted on business as usual. Under pressure from buyers to meet delivery targets, Rana threatened to withhold workers' wages (roughly 1,300 baht per month) if they failed to report to work. For those who did, his building proved to be a death trap, collapsing in under 90 seconds.

It is tempting to dismiss the Rana Plaza disaster as just another example of the challenges, including corrupt governments and unregulated businesses, facing the developing world. But developed Western countries were just as complicit. The wreckage was littered with the labels of some of the world's top retailers and fashion brands. Benetton, Monsoon, Mango, Walmart, and Primark were among the 29 large retailers identified as having sourced inventory from the building's garment factories.

Sweatshops like Rana Plaza would not exist if the dynamics of international trade did not fuel a desperate race to the bottom as developing countries compete for foreign direct investment from multinational corporations. In Bangladesh, the lack of regulation has enabled low wages and exploitative working conditions that are comparable to modern slavery.

The organisation of global supply chains, which employ more than 450 million people worldwide, both perpetuates this exploitation and helps to obscure its nature. By outsourcing jobs to developing countries, multinational firms can evade international labour standards and deprive workers of the rights and benefits accorded to direct employees. But this sleight of hand is not limited to the developing world. Exploitation is also rampant in the US garment industry, with workers in Los Angeles being paid as little as US$1.58 (54 baht) an hour. Even in the tech industry, workers are subjected to precarious working conditions and exploitative wages, as evidenced by conditions in Amazon fulfilment centres.

Although the Rana Plaza disaster drew widespread condemnation and moral outrage, even from Pope Francis, little has been done in the past ten years to address the underlying issues that led to the collapse and its devastating human toll.

For example, while the legally binding 2013 Accord on Fire and Building Safety in Bangladesh was renewed in 2018 and has more than 200 signatories, several major companies, including Levi Strauss, Gap, Walmart, and Amazon, refused to get on board. Instead, they opted for the Alliance for Bangladesh Worker Safety, a legally nonbinding corporate alternative that ended in 2018.

While the Rana Plaza Arrangement provided compensation for the survivors and victims' families, it was akin to putting a band-aid on a gangrenous wound. The story of Rana Plaza is not an isolated event but a microcosm of the abuse and exploitation endemic to globalised capitalism. Countries in the Global South are expected to overcome the legacy of colonialism and make up centuries of economic development in just a few decades. Bangladesh has grown dramatically since gaining independence in 1971, largely owing to its position as the world's second-largest garment exporter.

To achieve a fairer distribution of wealth and resources, Adam Smith's invisible hand must be restrained through regulation and redistributive policies. The power imbalance between developed and developing countries renders the theoretical foundations of the global capitalist paradigm as shaky as a sweatshop built on a landfill. And, like Rana Plaza in its fateful last days, the cracks are starting to show, with rising inequality and looming climate threats undermining the system's fragile structure. But as Leonard Cohen famously put it, "There is a crack in everything. That's how the light gets in." If we are wise, we will not ignore the cracks, and will see the light. ©2023 Project Syndicate

Antara Haldar, Associate Professor of Empirical Legal Studies at the University of Cambridge, is a visiting faculty member at Harvard University and the principal investigator on a European Research Council grant on law and cognition.

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