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 Minister for the Ministry of Industries Mr. Nurul Majid Mahmud Humayun, MP; 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.
Minister for Ministry of Industries Mr. Nurul Majid Mahmud Humayun MP, said, “There has already been a huge change in the garment sector in terms of payment of salaries. The Bangladesh Bank, in coordination with related industries, has greatly contributed to this change. At this point, it is necessary to raise the financial literacy of the garment workers to implement the payment system. In the case of digital payment, we at the Ministry of Industries are open to providing any sort of help to both public and private entities and all other stakeholders. We want our Honorable Prime Minister’s ‘Digital Bangladesh’ dream to come true and without a Digital Financial Ecosystem, that will not be possible.”
In this context, the Minister sought the cooperation of all stakeholders in the implementation of digital payment.
State Minister for Information & Communication Technology Division Mr Zunaid Ahmed Palak MP, said, “We are using our various services to test and coordinate innovative solutions for payment digitization aimed at empowering garment workers, especially women. The Government is working on 3 important areas to digitize public and private services – Verifiable Digital ID, Digital Payment Platform and Interoperable Framework.”
Deputy Governor of Bangladesh Bank Ahmed Jamal said, “Bangladesh Bank is already giving full support to build a Digital Financial Ecosystem. We are ready to commit to provide any sort of help to commercial banks and Financial Service Providers to cooperate and help build a digital financial ecosystem.”
President of the Bangladesh Garments Manufacturer’s and Exporter’s Association (BGMEA) Rubana Huq said, “Incorporating all the digital initiatives in one platform will help the workers to take steps for financial and social development. We hope that by 2021, 90% of the workforce will receive their wages through digital payment.”
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.”
Director of BSR’s HERproject 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 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. 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 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 Smita Nilimita. Panelists for this session included, ICT Ministry adviser Tina Jabeen, HR Professional of Standard Group Ahsanuzzaman, Chief People Officer of SQ Group Warisul Abid, Finishing Department member of Jamuna Denims Ltd. Mrs. Nargis Akter, Senior Sewing Operator of Jamuna Denims Ltd. 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 Maria May. Panelists included General Manager of Payment System Department of Bangladesh Bank Md. Mezbaul Haque, Managing Director of DBBL Abul Kashem Md.Shirin, Senior Program Manager Bangladesh of Gap Inc. Ms. Tamanna Sarwar, CEO of bKash Kamal Quadir and Managing Director of Bank Asia Limited 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 Anir Chowdhury alongside Asia Pacific Lead Keyzom Ngodup Massally and 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.