A very good trade relation is prevailing between Bangladesh and the Netherlands. The trade relation between the two countries ranges from agricultural products and services to industrial products and services. However, almost 85% of the exports to the Netherlands are apparel products. According to recent data, total apparel export from Bangladesh to the Netherlands was 986.93 million in 2018. The Netherlands has been supporting Bangladesh through providing financial and technical aid to water resources and coastal management projects in Bangladesh. It is also assisting Bangladesh in enhancing its business enabling environment.
On 12 March, H. E. Harry Verweij, The Netherlands Ambassador to Bangladesh shared several issues with Team Textile Today.
Textile Today: How do you see the growth of Bangladesh? How do you evaluate the contribution of the textile and apparel industry in Bangladesh’s economic growth?
H. E. Harry Verweij: Bangladesh has progressed tremendously in the last 10 years. I would say that the economic growth of this country has been remarkable and impressive. And if you compare this with many other nations in the world, Bangladesh really stands out.
The country is progressing to become a middle-income country and with the current pace, upper-middle-income is also possible. I guess that Bangladesh will achieve upper middle-income status by 2030.
In terms of development, the Bangladesh economy is becoming more mature. Economic growth has been very impressive. This is not to say that all the problems are solved. Of course, many people have been taken out of poverty, but still, there is still over 30 million people who continue to live in extreme poverty.
I feel that the Bangladesh government is working towards developing into a sustainable growing economy.
Textile Today: Every year Netherland imports a large number of apparel products from Bangladesh. But overall apparel exports to the Netherlands is not satisfactory. How Bangladesh can boost its apparel export to the Netherlands more?
H. E. Harry Verweij: Dutch brands under the textile covenant do business with 238 producers in Bangladesh. Almost all brands have participated in the Bangladesh Accord. I think in terms of our relationship in the garments industry, the Netherlands plays a very limited role with 1% of the world market, but in terms of sustainability, the Dutch textile sector plays a pioneering role internationally. This is reinforced by the close cooperation with the German textile partnership.
The Netherlands is also a major player in the Bangladesh textile industry from a development perspective, mainly due to the financing (together with the UK and Canada) of our flagship project – the ILO RMG program. This program trains the labor inspectorate and inspects the factories outside Accord (and Alliance). The ILO plays a coordinating role.
I think there are some further opportunities to explore. Be it governance, engineering, or sustainable solutions. We think we can expand our relationship with Bangladesh on those levels. We have been working very hard on waste management issues and inspection units. We are onboard with many aspects of the garment industry which go well beyond just being a trading partner.
For the other part of the question, I think there is room for further economic expansion in terms of trade between the Netherlands and Bangladesh in other sectors than RMG. There are opportunities for joint ventures between Netherlands companies and Bangladeshi companies in the more general sense. And I consider it my personal aim and goal to expand our trade relations. We will focus on the maritime and agricultural sectors.
In terms of Dutch foreign investments, we are still in the top 10 list of foreign investments in Bangladesh. There is scope for change in the export trade disparity. I think we could even improve on that. That is another goal for which I’m working for.
Textile Today: G Star Raw is a major Dutch buyer of Bangladeshi apparel products. How important is sustainable apparel manufacturing in Bangladesh for Dutch brands?
H. E. Harry Verweij: We have a few important Dutch brands that as I said before, work with about 238 factories in Bangladesh from which Dutch companies source.
We aim to work for improvement in working conditions and/or wages in textile-producing businesses as well as in animal welfare and environmental protection. More and more garments and textiles will be produced under better and safer conditions, and a growing number of factories will be able to meet the consumer demand for fair and sustainable products. In this context, we have a few very important partners, and the most important partner is actually the Government of Bangladesh itself. We really believe in the fact that the Bangladesh government is working with all stakeholders towards harmonizing sustainability requirements.
I think Bangladesh has made tremendous progress since the Rana Plaza incident which created a worldwide negative image of Bangladesh. And ever since setting up of Accord and Alliance as major inspection organizations, Bangladesh and major manufacturers have achieved tremendous progress. And that element of progress, safety, and security for the workers are yet to be better marketed worldwide.
I think Bangladeshi manufacturers should be willing to open up more proactively to the world and should endeavor to actually bring themselves to the frontlines of the world market – in particular Bangladesh’s important markets, the US, the EU – and also start working in their common interests on other issues like working conditions of the workers in general. And in so doing become pioneers in terms of upgrading the production and processing of products.
I would say the major manufacturers in Bangladesh have achieved already remarkable progress in the innovation of production processes. I have seen some of these factories and I am absolutely positively surprised with the innovations they have achieved which are of world-class standards. I give credit to Bangladeshi manufacturers for reaching higher in the market chains with value-added products rather than just the lowest price garments.
Textile Today: How is PaCT contributing in saving cost and resource of Bangladesh textile industry?
H. E. Harry Verweij: PaCT is all about clean textiles and ensuring a sustainable industry with the least possible impact on the environment.
We and our partners, IFC and the manufacturers, have achieved impressive results, especially on water saving, reducing effluent flows as well as on introducing new resource-efficient technologies.
The impressive figures show what PaCT has really achieved for the manufacturers. Of course, it’s a fast investment program so you need to spend money before achieving these results. But eventually, it saves the investors a lot of money through reduced operational cost. For the larger companies, it’s a feasible approach to ensure that you have adequate sustainable waste bottom management and electricity.
The PaCT has united the key stakeholders in the RMG sector with a common cause: to make the industry more sustainable. I am proud that the Netherlands is part of this partnership. Not only as a donor, but also as a partner in providing the necessary water technology. I consider it essential that we use the coming years to further develop this partnership, to introduce new technologies and to stimulate and facilitate investments in cleaner production.
Textile Today: How is the Textile Technology Business Center (TTBC) ensuring sustainable development of Bangladesh textile industry?
H. E. Harry Verweij: As with any new set up this will take time. But we are hopeful on the plan that BGMEA and IFC have worked out to make it operational and sustainable.
Textile Today: Bangladeshi textile and apparel manufacturers are struggling on profitability mainly due to less price from brands. Do you think manufacturing could be sustainable with the current prices they are offering to Bangladesh companies?
H. E. Harry Verweij: Well, this is a matter of demand and supply. It is a matter for the industry in Bangladesh to position themselves. The pricing issue is a very important element of our exchanges with the government and the textile and garment industry. Politically, it is extremely sensitive both here in Dhaka as in my Headquarter, The Hague. We want to approach it sensibly and delicately. But we need to make progress to the next level. It is in the interest of the brands, manufacturers, unions and of the workers.
My embassy will certainly pick this up again as a follow-up of our efforts in 2016, when we organized a conference on Sustainable Sourcing. Also in 2017, we organized a roundtable on a living wage. Both these events were organized to discuss pricing, sustainability, and wages. Our message in both these events was that performance indicators used by buyers should focus less on price and more on other aspects, like sustainability. We also urge producers and buyers to form long-term partnerships for sustainability.
I think we will be able to build on the achievements we have so far in the industry and see how we can step up our efforts.
Textile Today: Recently the Bangladesh government has increased apparel workers salary, will this initiative help to shine the sector’s image in the global arena?
H. E. Harry Verweij: I recognize the political will to ensure an increase in salaries. The recent increase in the minimum wage in Bangladesh is modest and barely keeps up with inflation. For a living wage the current minimum wage would have to be doubled. I note that this raise has been agreed upon by the manufacturers and the government. But there is still a lot more work to be done.
I want to say that the issue of wage needs to be seen in the context of pricing, working conditions etc. We feel as more and more sustainability requirements are being set, prices continue to fall that brands pay to producers. We continue to appeal and advocate for responsible purchasing and paying fair prices. The Netherlands takes its responsibility as a partner in the strife for responsible purchasing very seriously and we will remain at the forefront.
Textile Today: Bangladesh textile and apparel industry is the second largest in the world. What are the opportunities do you see for the Netherlands in investing in Bangladesh textile and apparel industry?
H. E. Harry Verweij: The international market does not know much about Bangladesh. There are 500 million citizens in the EU. And I think more than 499 million of them don’t know anything about Bangladesh.
I think Bangladesh has actually not done enough to promote the country for its full potential. I think this is a branding and marketing issue that the industries, the government and maybe we should invest a lot of time and energy in.
For me, as a Dutch Ambassador, I want to expand the trade relationship between Bangladesh and the Netherlands, as both our countries have enjoyed an extremely good relationship since independence.
I think Bangladesh should brand its economic potential. Looking at the growth figures, the expanding middle class, the huge market place, and the above average productive workforce; these things need to be brought up in a professional manner to show that Bangladesh has achieved a lot and the opportunities it offers for the future. I think slowly but surely this country will get more positively in the minds of partners in your important markets.
I always say, ensure that you have an open economy, an inclusive economy – meaning include the poor – and an innovative economy.
Textile Today: Bangladesh is one of the lowest performers on ease of doing business, how can Bangladesh improve the ease of doing business?
H. E. Harry Verweij: Well, that is another branding issue. If I were a Bangladeshi, I would never accept Bangladesh to be so low on this list.
This country should work hard to conform to the indicators of the World Bank. It is up to the Bangladesh government to ensure that Bangladesh quickly moves up the ladder of the WB list. This is my wish, as it is absolutely necessary to improve the ease of doing business in Bangladesh in the interest of all your partners including the Netherlands.
If I talk to Dutch companies that do business here, they say that business is feasible in Bangladesh and profitable. That is my personal indicator!
My major message to all is: show that Bangladesh is expanding, prove that it can be a preferred destination to do business. Step up efforts to brand the nation, its economy and its high-value products. This will eventually, I’m sure, create a somewhat more positive image of Bangladesh and its economy.
I believe Bangladesh has become more self-confident. It’s an energetic country where we, the Dutch, feel at home. And rest assured that the Netherlands will remain your partner, as we have been since your independence.