Ideas & Updates

In Bangladesh, key public and private sector actors commit to scaling digital wages across garment sector

© ©Better Than Cash Alliance/M.M. Zahidur Rahman

Dhaka, November 20, 2019 - Media release by Government of Bangladesh: Building on what has been achieved so far, the government and the private sector have committed to working together to solve the challenges in ensuring all garment factories pay their workers digitally. The decision came from the Bangladesh Digital Wages Summit, which convened on 20 November in Dhaka.

The summit was jointly held by the Access to Information (a2i) Programme of the ICT Division, supported by the Cabinet Division, United Nations Development Programme (UNDP) and the United Nations-based Better Than Cash Alliance. The summit was also co-organized by Business for Social Responsibility (BSR) and Bangladesh Garments Manufacturers and Exporters Association (BGMEA).

The summit started with an opening panel discussion named “Scaling digital wages for employees and manufacturers”. Key panelists included Hon’ble Minister for the Ministry of Industries Mr. Nurul Majid Mahmud Humayun, MP; Hon’ble State Minister for ICT Division Mr. Zunaid Ahmed Palak, MP; The Deputy Governor of Bangladesh Bank Mr. Ahmed Jamal; President of BGMEA Dr. Rubana Huq; Managing Director of the United Nations-based Better Than Cash Alliance Dr. Ruth Goodwin-Groen; Resident Representative of UNDP Mr. Sudipto Mukerjee; ILO Country Director and UN Representative Mr. Tuomo Poutiainen; and the Bangladesh Country Manager for Marks & Spencer Ms. Shwapna Bhowmick. The opening panel discussion was moderated by the Policy Advisor of a2i, Mr. Anir Chowdhury.

Industries Minister Mr. Nurul Majid Mahmud Humayun, MP said: “We are committed to supporting the ready-made-garments sector to leverage new technologies that will improve the lives of garment workers. These efforts will, in turn, improve our country’s economic growth.”

ICT State Minister Mr. Zunaid Ahmed Palak, MP said: “We are dedicating our services to coordinate, support and test innovative solutions to digitize payroll in order to empower garment workers, particularly women.”

Deputy Governor of the Bangladesh Bank Mr. Ahmed Jamal said: “We commit to driving down costs and improving access to digital financial services through building an enabling environment.”

Managing Director of the United Nations-based Better Than Cash Alliance, Dr. Ruth Goodwin-Groen said: “We are committing to help bring together the key public and private sector stakeholders who can take wage digitization in Bangladesh to the next level.”

President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Dr. Rubana Huq, said: “Through digitizing wages, we are pledging to further promote financial benefits, such as cashback, reward points and merchant discounts, to increase the value of wages.”

Director of BSR’s HERproject Ms. Christine Svarer, said: “We are committed to continuing to support the garment sector to digitize responsibly through HERproject. By doing this, we will ensure that workers, especially women, have the skills and knowledge to benefit from the transition to digitizing and that factories are supported during the process.”

Regional Sustainability Manager of H&M Mr. Kiran Gokathothi, said: “We will continue to support industry collaboration for scaling digital wages in Bangladesh. The move from cash to digital payments will help to empower the garment workers, especially women, who represent the majority of the workforce.”

Inditex: “Under the framework of our Workers at the Centre strategy, we will continue working along with other industry stakeholders to support wage digitization in the supply chain, including in Bangladesh, to foster workers financial empowerment.”

Senior Program Manager of Bangladesh Gap Inc. Ms. Tamanna Sarwar, said: “We set a goal all of our Tier 1 suppliers globally to transition from a cash-based wage-payment system to a digital wage payment system by 2020 and, to date, 80 percent of our suppliers are now using digital wage payments. Through this effort, workers will gain greater control over their finances and offer a safer way to save, spend and invest their money. Digital wages will also help increase accountability and transparency across the garment sector.”

Bangladesh Country Manager of Marks & Spencer Ms. Shwapna Bhowmick, said: “Along with all constituents of the garment industry, we will continue to contribute to the digital wages working group and will share the experiences of leading suppliers who have already digitized wages.”

The summit discussed issues faced in making cash payments for both the garment employees and manufacturers, and how digital payments are beneficial for both parties, in terms of security, efficiency, empowerment and independence. Shifting to digital payments benefits both employers and employees, while promoting stronger business relationships. When payroll got digitized, garment factories recorded a 53% savings in staff time for their admin and finance teams. Wage digitization also improved the likelihood of women to participate in household decisions related to spending and savings by 15%. However, to realize these positive impacts, it is vital to ensure responsible wage digitization, considering the needs of women, who represent the majority of the garment workers in Bangladesh.

The high-level gathering was held to:

  • Bring together key decision-makers and industry stakeholders, including the government, global buyers, manufacturers, industry associations and financial service providers to support the scale of digital wages in Bangladesh.
  • Share lessons learned, tools and best practices from experts in Bangladesh to support future digitization commitments.
  • Secure commitments from key stakeholders to work collaboratively to scale wage digitization across the garment sector in Bangladesh

Three different panel discussions were organized at the summit. The first discussion, “Benefits of digitizing responsibly: The business case and impact on women workers” was moderated by Bangladesh Representative for HER Project at BSR Ms. Smita Nilimita. Panelists for this session included, ICT Ministry adviser Ms. Tina Jabeen, HR Professional of Standard Group Mr. Ahsanuzzaman, Chief People Officer of SQ Group Mr. Warisul Abid, Finishing Department member of Jamuna Denims Ltd. Mrs. Nargis Akter, Senior Sewing Operator of Jamuna Denims Ltd. Mrs. Sumaiya Akter, and Regional Sustainability Manager of H&M Bangladesh, Mr. Kiran Gokathothi.

The second discussion, “The importance of an inclusive digital ecosystem for scaling up wage digitization” was moderated by Senior Program Officer at Bill & Melinda Gates Foundation Ms. Maria May. Panelists included General Manager of Payment System Department of Bangladesh Bank Mr. Md. Mezbaul Haque, Managing Director of DBBL Mr. Abul Kashem Md.Shirin, Senior Program Manager Bangladesh of Gap Inc. Ms. Tamanna Sarwar, CEO of bKash Mr. Kamal Quadir and Managing Director of Bank Asia Limited Mr. Arfan Ali.

The final discussion, “The road map to scale-up digitization of wages: The role of stakeholders” was moderated by Policy Adviser of a2i Mr. Anir Chowdhury alongside Asia Pacific Lead Ms. Keyzom Ngodup Massally and Ms. Marjolaine Chaintreau, Private Sector Lead, both from the United Nations-based Better Than Cash Alliance.

Participants of the summit included high-level officials from the government, donor agencies, international NGOs, representatives from the Ready-Made Garment (RMG) sector and media personnel.

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