* Any views expressed in this article are those of the author and not of Thomson Reuters Foundation.
Saif Rashid believes that, given the right market opportunities, millions of Bangladeshis can lift themselves up financially. With an innovative new model called APON, he is empowering the workers of Bangladesh’s ready-made garment manufacturing industry to increase their disposable income and build better, healthier lives.
According to Clean Clothes Campaign, only China is ahead of Bangladesh in supplying garments to the world market; Bangladesh exported about $20 billion worth of garments in 2013, representing 80% of its exports. As industry observers have pointed out, the country’s economy has come to rely on exporting low-price apparel to a world full of consumers hooked on “fast fashion.”
Eighty percent of the country’s 4.2 million ready-made garment (RMG) sector workers are women, and many struggle to support their families even with full-time work, due to chronically low factory wages.
With APON, Saif offers these workers a way to both grow their disposable income and receive subsidized health care for their families, without forcing factory owners to increase worker pay. He does this by selling them discounted consumer staples at a workers-only shop, where their purchases earn them points toward a workplace benefits scheme.
APON sets up and manages these shops inside the RMG factories, selling packaged food, hygienic products and other disposables to the factory workers at a slight discount—about 8% to 10% less than at retail outside the factory. Each purchase from the shop earns a worker points that accumulate on her APON account. For every 100 Bangladeshi taka (about $1.25) spent, the worker earns 1 APON point. With 200 points, the worker gains access to APON’s zero-cash health coverage, allowing her to get free medical diagnoses and prescriptions from a doctor.
As a veteran of corporate engagement at CARE Bangladesh and a serial social entrepreneur, Saif sought a scalable approach to support the RMG sector without relying on donations or grants. Purchases through APON shops allow workers to increase their disposable income and gain access to reliable health care services and other wellbeing benefits, perhaps for the first time in their lives.
“We don’t need funding from the factory for the health of the workers, [or] funding from the buyer to finance the health, which was always a struggle to get,” Saif says. “Now, workers can generate their own health finance.”
Saif was elected an Ashoka Fellow in 2015 and is part of Fabric of Change, a partnership between Ashoka and C&A Foundation, that recognizes APON for its potential to shape a more equitable global apparel value chain.
APON aims to overcome a persistent apparel industry barrier: that a job is not enough for low-income workers to secure long-term wellbeing.
Financial Sustainability Along The Value Chain
Almost four years after the devastating Rana Plaza garment factory collapse near the capital of Dhaka, Bangladeshi RMG workers still don’t see the industry prioritizing their safety and livelihoods. In December, workers went on strike to protest the $68 minimum monthly wage, which has not increased since 2013, among other alleged violations of their labor rights by factories and the government.
Saif says many RMG workers labor for 12 or 13 hours daily just to earn enough to survive in Dhaka, where the cost of living is increasing rapidly.
Before he launched APON, Saif led JITA, a door-to-door sales program through which rural women are trained to sell fast-moving consumer goods (FMCG) in their villages.
JITA has been successful in large part because it provides FMCG companies a last-mile distribution network for their products in rural Bangladesh. Saif now is using the leverage gained with the FMCG companies to negotiate lower wholesale prices for products sold in APON shops. Saif hopes the resulting higher margin will make APON financially sustainable.
“With a high margin, we can have a wellbeing scheme for the workers, we can give a discount directly, which will increase their disposable income. And factories can get benefits because this scheme might help them in terms of reducing the turnover of the workers,” Saif says.
The sole cost to a factory to participate in APON is the space needed for the shop. Still, convincing factory owners that APON reduces worker turnover will be key, Saif says. The current pilot in one factory is slated to produce preliminary data on the program’s benefits in early 2017.
Achieving Irreversible System Change
Long term, Saif says APON will need to reach about 20% of Bangladesh’s RMG labor force, or nearly one thousand factories, to be financially sustainable.
Beyond medical coverage, he hopes to add other benefits to the APON wellbeing scheme, such as subsidized education for children and even family entertainment options. Another Bangladeshi Ashoka Fellow, Suraiya Haque of Phulki, has worked for years to effect irreversible change in the country’s garment factories, by ensuring that they offer childcare facilities to their workers as a standard of practice. A decade from now, Saif hopes that the APON model will have achieved a similar level of system change and become the norm in Bangladesh’s garment factories—a standard benefit through which workers realize a better life for themselves and their families.
Our Standards: The Thomson Reuters Trust Principles.