Bangladesh to form wage board after garment protests shut factories

DHAKA, Nov 1 (Reuters) - Bangladesh will set up a wage board on Sunday to review garment workers' pay after protests shut dozens of factories and triggered clashes with police, putting fresh strain on the country's key export industry.

Workers in the South Asian nation are demanding a minimum monthly wage of 30,000 taka ($245), more than double the current 12,500 taka, saying rising costs of food, housing, transport and healthcare have sharply eroded their purchasing power.

The dispute has raised concerns about disruption to an industry that employs about 4 million workers, generates more than 80% of Bangladesh's export earnings and supplies clothing to many leading Western brands.

Labour and Employment Minister Ariful Haque Chowdhury said the government would formally constitute the wage board after discussions with labour leaders and industry representatives aimed at defusing the unrest.

Saturday's protests prompted about 30 garment factories in Ashulia, a key manufacturing hub on the outskirts of Dhaka, to declare holidays, said Mohammad Mominul Islam Bhuiyan, superintendent of the Ashulia Industrial Police.

Hundreds of workers blocked a major intersection in the capital, while demonstrations in other industrial zones disrupted traffic and factory operations. Clashes between workers and police in Ashulia injured several people, including police officers, police said. Officers used tear gas and sound grenades to disperse protesters.

Chowdhury urged workers to return to work, saying the government's decision to review the wage structure addressed their key demand.

He warned that prolonged factory closures and production disruptions could delay export shipments and payments from international buyers, creating further difficulties for manufacturers and workers.

Bangladesh's ready-made garment industry, the world's largest after China, contributes about 10% of gross domestic product and is the backbone of the economy.

Manufacturers, however, said the sector is facing mounting challenges, including rising production costs, periodic gas and electricity shortages, and uncertainty in energy markets linked to tensions in the Middle East.