UK pledges funding to factories in developing countries, including Bangladesh

The United Kingdom's Department for International Department (Dfid) has launched a new funding to protect workers in developing countries supplying goods to the UK amid the Covid-19 fallout threatening global supply chains.

Under the £6.85 million scheme, Dfid will partner with businesses including Marks & Spencer, Morrisons, Primark, Sainsbury's, Tesco, and Waitrose to improve conditions for workers in countries including Bangladesh, Ghana, and Rwanda, reports The Daily Telegraph.

The UK businesses will contribute £2 million while the remainder will come from the UK government.

"We want to ensure people in Britain can continue to buy affordable, high quality goods from around the world," said international development secretary Anne-Marie Trevelyan, announcing the plans on Thursday.

Peter Alexander, senior lecturer in global food security at the University of Edinburgh, said the production ends of supply chains could still be hit by Covid outbreaks or worker lay-offs in major exporting countries, such as Bangladesh or Kenya.

"So far the impact of Covid has been a demand shock rather than a supply shock but my concern is that this could still easily change," he said. 

This alone is unlikely to create supply shortages. But if food prices rise as a result—or because of inflation—governments may respond by limiting exports.

"These types of policies, which we've seen before, have a cascading effect that has potential to create a substantial supply shock and increases in global food prices," he said.

According toTrevelyan, the new fund will "will strengthen vital supply chains for UK consumers, while supporting some of the most vulnerable workers in developing countries. It will make a real difference to people in the UK and abroad".

Charities like Care UK, the Fairtrade Foundation and Ethical trade initiative (ETI) are partnering with high-street brands to implement the scheme, which will benefit almost one million workers in developing countries, according to Dfid. 

The targeted countries are Bangladesh, Ghana, Ethiopia, Myanmar, Rwanda, Tanzania and Uganda—producers of a large proportion of the food, flowers and clothes sold in the UK.
The new initiative has drawn criticism from some quarters, coming on the back of the government's decision to merge Dfid with the Foreign Office and cut the aid budget by £2.9 billion. The focus on safeguarding UK consumer interests has raised doubts about the plans. 

"This is hopefully just a question of how Dfid has framed it," said Vidya Diwakar, a researcher in the Chronic Poverty Advisory Network, adding that the scheme offers "scope for cautious optimism" but that "the nuts and bolts need clarifying". 

For example, "women and men workers face different vulnerabilities, with women particularly affected", she said. 

"How will the programme be adjusted to reflect this?" Rubana Huq, president of the Bangladesh Garment Manufacturers and Export Association (BGMEA), welcomed the initiative.

"We are hopeful that the benefits being extended to the businesses will trickle down to the manufacturers so that the workers can be the ultimate beneficiary," she said.

Bangladesh is the world's second largest clothing exporter and its garment factories employ some 4.2 million people.

The industry has been hard hit by plummeting demand for clothes in western markets and by cancellations from retailers—to the toll of £1.6 billion. British brands, such as the Edinburgh Woollen Mill company, are among those accused of abandoning Bangladeshi workers by garment suppliers and workers' unions in the country.

Brands need to be "more responsible with their purchasing practices," said Ms Huq, adding that stalled payments from retailers have had a much larger impact on the sector in Bangladesh than Covid-19 itself. 

This would have had a "massive impact on workers, including lay-offs, if our government did not extend a soft loan to us," Ms Huq said.

Some 80,000 Bangladeshi workers in factories manufacturing Marks and Spencer's clothes are due to benefit from the scheme, along with a further 300,000 people in their communities, according to Dfid.

"The East African agricultural workers who supply so much of our food and flowers have been hit hard by Covid-19," said Peter McAllister, executive director at Ethical Trading Initiative, adding that "Dfid's support for this intervention will help protect thousands of jobs, and protect workers from infection as the regional economy begins to recover."

Partnering with Care UK, Marks and Spencer plans to "strengthen healthcare and services" in its factories and "the wider community,' according to Fiona Sadler, head of ethical trading for the retailer.

"Businesses have an important role to play to ensure people within their operations and values chains are safe, treated with dignity and can prosper," said Laura Hawkesford, head of private sector for Care UK. 

"Coronavirus poses a critical threat to Bangladesh garment workers, with hundreds of thousands of people in dense areas at risk," she said.

"It seems a potentially good scheme to me, just rather a small budget," said Andrew Shepherd, the Director of the Chronic Poverty Advisory Network, adding that "the partnerships will help protect the scheme against abuse."

Dfid confirmed that UK aid is not going to the businesses themselves but that the funds will be channelled through Dfid's management agent, Mott MacDonald, and in most cases will then flow through the partner NGOs.