Cloth Assembly for the World: A theory-driven inquiry into the apparel industry in Bangladesh and the dynamics of global value chains

Svante Graulund

Student thesis: Master thesis

Abstract

In this thesis, I aim to explain the evolution of the apparel industry in Bangladesh by theories on global value chains. I hypothesize that local obstacles exist, which inhibit the industry in achieving its full potential. I test the hypothesis by use of a case study approach.The investigation takes the form of a theory-testing and informative qualitative single case study in the apparel industry in Bangladesh with reference to global value chain theory (GVC) and with a focus on the concepts of governance, upgrading (industrial, economic and social) and embeddedness. On this basis, the analysis discloses how Bangladesh apparel industry is positioned at the lower (labor-intensive and manufacturing) part of the global apparel value chain and how industrial and economic upgrading is restrained by low productivity and narrow span of products. Growth of firms and workers is mostly due to volume and not to price and quality improvements. The fact that the export success of the Bangladesh apparel industry has come about on behalf of lesser value added has influence on the social upgrading of workers. The pressure in terms of price concessions has been sent down the chain to contractors and to low level workers. Living wage for seamstresses, and low level employees, has stagnated. What has been conceptualized as social downgrading has not least been felt in terms of workers formal and enabling rights. When workers are not able to negotiate their conditions, progress is unlikely. The analysis discloses that there are local obstacles to upgrading. The political and economic elite are merged to take the form of vested interests, ministerial authoritarianism, and distorting incentive structures for apparel factory owners. This situation is connected to the overall formation of the apparel GVC in Bangladesh and has resulted in what is labeled path dependency. Vertical dynamics in the global apparel chain coexist with horizontal institutions to create a vicious cycle of low value strategies for suppliers and buyers. The case study calls for an adjustment of GVC theory, when applied on weak, undemocratic states. It suggests a bridge-building effort with GPN approaches specifically through the concept of embeddedness. Along with Gary Gereffi and others, it advocates multi-stakeholder initiatives combining the public and the private and equipment of policy-makers with a tool-set to contextualizing upgrading strategies. It also suggests EU and other international organs to incorporate broader development issues in their trade policies.

EducationsMSocSc in Political Communication and Managment, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2015
Number of pages87