By
with contributions from Kelly Wetherille
 on July 4, 2016
Garment factory in Dhaka, Bangladesh


Nine of the 20 hostages who lost their lives in a Dhaka restaurant Friday were Italians, most of whom worked in the garment business. The attack, which took place at the Holey Artisan Bakery around 9:20 p.m. in the Gulshan area, an upscale neighborhood frequented by foreigners that had been considered safe even during the previous years of election-ridden violence, has caused shock and trepidation among retailers and executives with global brands.

The international scope of the deceased included seven Japanese citizens, one U.S. citizen, one from India and two who were believed to have been from Bangladesh. The 12-hour siege ended when commandos broke into the restaurant early Saturday morning, killing five gunmen and arresting one more. Two policemen were killed in the exchange as well.

“The terrorists used sharp weapons to kill the hostages brutally,” Brig. Gen. Nayeem Ashfaq Chowdhury said on Saturday.

This is the first time foreigners have been targeted on this scale in Bangladesh, and business leaders are concerned about the effect this will have on the $24.5 billion garment export industry in Bangladesh. Bangladesh is the second largest garment exporter in the world, after China, and employs more than four million workers.

“The hostage attack heightens security concerns while presenting a serious threat to the economy,” said Sarah Labowitz, cofounder and codirector at the NYU Stern Center for Business and Human Rights. “The fashion industry has been a boon to Bangladesh’s economic growth, but this kind of attack will surely keep buyers away in the months leading up to the holiday shopping season. Five million workers depend on jobs in the ready-made garment sector. This attack has the potential to jeopardize Bangladesh’s developing economy and the prosperity of its people, which only exacerbates an economic environment in which homegrown extremism can take root.”

Describing it as a “horrific incident,” Siddiqur Rahman, president of the Bangladesh Garment Manufacturers and Exporters Association, said the killings would “put pressure on our business,” adding that it was hard to estimate the extent at this time as buyers were still stunned by the development.

Responding immediately to the situation, Fast Retailing has suspended all unnecessary business travel to Bangladesh for the month of July. “Unnecessary means if the purpose for travel is not critical or urgent, it is suspended,” a spokesman for the company said.

In addition, Fast Retailing’s 10-person Japanese staff in Bangladesh, four of whom are with Grameen Uniqlo and six of whom work in a Fast Retailing production office, have been asked to stay home until further notice.

There are nine Grameen Uniqlo stores in the Dhaka area, all of which are open for business as usual. The stores will close for the upcoming Eid ul-Fitr holiday, as was planned before the attack. Eid-ul-Fitr is expected to be celebrated in Dhaka on Wednesday.

The garment industry has been caught up in the anguish of the incident in other ways. Tarishi Jain, a 19-year-old student from University of California, Berkeley, who was killed in the incident, is the daughter of Sanjeev Jain, who runs a garment business in Dhaka. Two of her friends, Faraaz Hossain and Abinta Kabir, who were also killed, were students at Oxford College in Atlanta.

The Islamic State group has claimed responsibility for the attack, saying it targeted the citizens of “Crusader countries.”

Speaking of the horrific event, Chowdhury said there was a huge cache of AK-22 assault rifles and IED explosives, as well as intense shooting at the location.

Bangladesh Prime Minister Sheikh Hasina announced two days of mourning and vowed to fight future terrorist attacks. “Anyone who believes in religion cannot do such [an] act. They do not have any religion, their only religion is terrorism,” she said in a televised address.

Although there have been more than 20 killings of prominent bloggers, priests and social activists over the last two years, the government has been slow to act in bringing down random violence.

Industry analysts on Monday said Bangladesh was just beginning to recover from the tragic incident of Rana Plaza where more than 1,130 garment workers were killed when a nine-story building collapsed in April 2013 could go through a period of severe crisis once again in the coming months.

Economist Omar Rahman, contended that the garment industry had proved resilient over numerous situations over the last decade, and  while the situation was grave, it was no reason for panic. He cited the 30 people killed earlier in the week at Istanbul’s airport, and the car bombings in Baghdad that killed more than 200 people on Sunday, for which ISIS had claimed responsibility, and said that clear thinking and solidarity might still win the day. “We have large-scale factories that have been considerably modernized over the last two years, as well as the low-cost labor — among the lowest in the world — the industry will be able to weather this crisis,” he said.

Meanwhile, government officials said security would be ramped up as the holiday period for Eid-ul-Fitr begins.

The impact of the incident has been felt around the world, and grief and solidarity is being expressed. Japan’s tallest building, Tokyo Skytree, was illuminated in white on Sunday, in memory of the seven Japanese nationals who lost their lives. All of them worked for Japan International Cooperation Agency. The Japanese government asked that the names of the dead be withheld out of respect to the families.

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