Most of the people send money to Bangladesh as remittance is received from European countries. Bangladesh advantages from the most beneficial regime possible under the EU’s Generalized Scheme of Preferences (GSP), namely the Everything But Arms (EBA) arrangement, as a Least Developed Country (LDC). The EBA provides duty-free quotas and free access to the EU for all products except armaments and ammunition to the 48 LDCs, including Bangladesh.
The EU launched a Sustainability Compact for Bangladesh in July 2013, in reaction to the collapse of the Rana Plaza factory complex, which killed scores of workers. The Compact aims to improve labour rights and factory safety in the ready-made garment industry. The project brings together the European Union, Bangladesh’s government, the United States, and Canada – the primary export markets for Bangladeshi garments and the International Labour Organization (ILO) responsible for money transfers to Bangladesh from abroad. The Compact is founded on short- and long-term commitments to three interconnected pillars:
- Respect for workers’ rights;
- building proper functioning;
- workplace health and wellbeing;
- and ethical business practises.
Although the Compact has helped improve the mechanism of online money transfer to Bangladesh, workplace safety, respect for workers’ rights remains a significant concern in Bangladesh. In October 2017, the EU released its fourth technical report on the Bangladesh Sustainability Compact.
What Is European Union Everything But Arms Initiative And How Is It Beneficial For Developing Countries?
The EU’s “Everything But Arms” (EBA) initiative, launched in 2001 as part of the EU’s GSP plan, gives LDCs duty- and quota-free access to nearly all products (except arms and ammunition, as the name implies). It is governed by Regulation (EU) No 978/2012 of the European Parliament and the Council until December 31, 2023.
LDCs get automatic access to the programme. To put it another way, countries do not need to apply to benefit from EBA; instead, a delegated rule adds or removes them from the relevant list. However, in certain extreme circumstances, such as egregious and systematic violations of human rights and labour rights accords, EBA privileges may be revoked.
In some products, the EU has more favourable origin criteria for LDCs since 2011. The rule enhanced the permission for the use of non-originating materials in numerous produced products and permitted for garments that had only undergone “single transformation” (e.g., garment manufacturing using imported fabric) rather than “double transformation” (e.g., garment manufacturing using imported fabric) (applicable to other developing countries). The laws of origin for agricultural products are the same for developing countries and LDCs.
The Bottom Line:
By the ease in imports by European countries for least developed countries, export and foreign revenue have increased. Increment in remittance is due to the digitalization of the finance system; workers can send money to Bangladesh online. These two factors are significant in the sustainability of the economy of a country like Bangladesh.