Nepal saw its first Taylorist garment factory when two Kenyan brothers Raj and Akhil Shah chose Nepal as the site for producing garments they would later sell in the American West Coast including to the film units of Hollywood veterans such as Steven Spielberg. There were 50 or so garment factories in Nepal in the 1980s. Many more manufactured garments but could not be registered formally as firms for lack of ‘afno manchhe’ needed for accessing the Panchayati bureaucracy. When Nepal liberalized following the 1990 Janaandolan, and the state removed unnecessary regulations on business registration, the industry became home to over a 1,000 factories which soared to success until the nation lost out to the international trade negotiation involving Multi-Fibre Arrangement (MFA) in 2004. Mr Khanal sees this rise and fall as a wave of profiteering.
The factory owners of the 1990s ‘made hefty profits’ and shut their factories as soon as the MFA ended, says Khanal. I beg to differ. The middle class factory owners of the 1990s worked as hard and smart as today’s Surya Nepal Garments. In fact, it is this language of dismissal that cloaked the garment tragedy that ended livelihoods of hundreds of thousand men and women in the heart of Kathmandu just when the Maoist insurgency was causing havoc in the countryside.
Throughout much of the 1990s and beyond, state’s denigrating of entrepreneurs and workers kept the garment industry tied to the faceless and nameless game of ‘race to the bottom.’ I agree that market forces are often the healthiest regulators of businessmen’s actions, but the state cannot shy away from its leadership role.
Neoliberal state of the 1990s maintained that the ‘invisible hand’ of market forces would eventually solve all problems it saw in the garment industry. The first problem cited was that it had no domestic value addition even when all tasks of converting fabrics into clothes genuinely happened within the country. Second, that it was not really competitive even when its gate prices compared favourably with those of the neighbors.
And above all, that it was an ‘Indian’ industry within Nepal that employed only ‘Indians’ who would go away as soon as the assumed ‘profiteering’ opportunity presented by MFA came to an end. It is true some legitimate concerns were also raised from time to time – that Nepal is too far from the global transhipment route and that Nepali businessmen are too poor to build the necessary industrial infrastructure. On its part, the state did little to overcome any of the real or perceived limitations of garment industry other than to make few trade delegations to the United States and Europe to discuss the matter. These had little chances of success since the discussions had been sabotaged even before they had begun. Foreign dignitaries and development consultants routinely gave statements either cultivating myths of fake Nepali garment labels or denigrating the productivity of Nepali workers. None of these misstatements were corrected by the state even once.
Nepali state never considered that social protection is a necessary component of economic liberalization. The garment industry is a case in point. Surya Nepal Garments, which played the market game well as Mr Khanal argued, ended up losing out to the shadows of past labor woes.
Came 2004, the much hyped MFA expired, and with it, the Nepali garment factories fell one after the other. The state towed the neoliberal party line that the industry was never a ‘real industry,’ and was ‘doomed from the start’ and ‘destined to fail.’ No op-eds in Nepali newspapers nor policy analyses of Nepali economy spoke what happened of the 100,000 workers who lost their jobs when the industry fell. Policymakers had no idea what it meant to turn up at work as always, and to be told one fine morning that the factory had closed its books the night before and that they must now ‘go home.’
The big padlock on the factory gate confirmed what they had heard, not from any official sources but randomly through security guards or local residents. One looked at the other, in disbelief. And then they saw that hundreds of them saw each looking at the other. Yes, there had been rumors about this thing called MFA. Yes, if they had found something else earlier, they would have switched jobs. But why wasn’t there, in the heart of Kathmandu, an official state representative to warn them earlier of the imminent fall? Why wasn’t there, in the heart of Kathmandu, an official state representative only to tell them to keep the spirits even if there was nothing else to offer? Delay of a short haul flight warrants apologies from the airline representative. And here, thousands had their lives wiped out in front of them and the state simply ignored them. Workers turned to whoever was it that they could turn to. How fair is it to now preach the workers that the rise of labor militancy is bad for them? Even if it is, what other alternatives were they given?
Class uprising is not a distraction but the core of any story that seeks to explain what happened to the garment industry after 2004. It is true that few factories who survived 2004 kept work going and livelihoods rolling for their workers. It is true that these workers may have chosen to stay away from unionism. I do hear Mr Khanal’s questioning: Why would the ‘central’ trade union walas disrupt work of their fellow class men (and women) when they should have celebrated that at least some of their fellow workers still have their jobs? For one, trade union wallas have fancier cell phones than businessmen they face off against, says Mr Khanal. For other, they bully poor village women of Surya Nepal Garments who do not want labor militancy but work, he infers.
Both these statements overlook the entire episode of how the garment working class was pushed so far back to the margins that they had no other option but to call the unions. The garment wing of the trade union went from being smallest to the most powerful one within a short span of 2003-2007. As tempting it may be to dismiss radical trade unionists as bullies, garment industry analysis is not complete without acknowledging the disenfranchisement faced by so many not so long ago.
Unionising is not the solution to job loss. Equally, even a meagre help from the state would have made workers rethink. After all, even the neoliberal bastion of America bailed out both the bankers and borrowers when the financial crisis hit. Closer to home, India’s National Rural Employment Guarantee Act ensured basic livelihood of workers in times of economic turbulence which acted as a wage stabilizer during normalcy. Such human safety net programs are expensive but they have not undermined but reinforced the Indian spirit of industry competitiveness. In contrast, Nepali state never considered that social protection is a necessary component of economic liberalization.
The garment industry is a case in point. Should we even be surprised that labour militancy came home to roost seven years after the fall of the industry? Surya Nepal Garments, which played the market game well as Mr Khanal argued, ended up losing out to the shadows of past labor woes. I am not legitimizing labor militancy nor suggesting that it has always protected the interests of the working class. I am only pledging policymakers to look at it from a laid off worker’s point of view: What guarantee is there that the handful of these survivor factories will turn a new leaf when its entire cohort has chewed them in and spitted them out, and the state remained a passive bystander?
The writer, a PhD, is a Senior Lecturer in University of Pretoria and a Research Fellow at Wolfson College, University of Oxford. Her doctoral research was on the readymade garment industry of Nepal
mallika_ldn@yahoo.com
Related story
5 home remedies to stop hair fall
