A U of A economics researcher in the Sam M. Walton College of Business is bringing his expertise to an emerging economy. He and his team of international colleagues hope to use their research to create sustainable policies that benefit developing countries.

Bangladesh, an Asian country surrounded by India, Myanmar and the Bay of Bengal, has one of the fastest growing economies for developing countries. Its exports are dominated by the textile and leather industries, including garments, footwear, fabric and jute yarn. Some footwear, garments and accessories are made of leather. Those exported leather goods require tanneries which turn raw hides into luxurious leather for shoes, jackets, purses, shoes, wallets, belts and more.

Tanneries utilize heavy metals such as chromium, lead, copper, zinc, nickel and cadmium to process leather. During processing, these toxic metals and chemicals, such as sulfur and manganese, leach into water systems unless collected and treated through a water treatment plant. If not treated, these toxins end up in water used for drinking, bathing and irrigation. It also creates air pollution for nearby residents and workers.

The metro area of Dhaka, the capital of Bangladesh, includes Hazaribagh, which until 2014 was home to a cluster of 250 tanneries providing employment to some 50,000 workers. The air surrounding the tanneries was filled with a chemical stench, caused by untreated waste dumped into nearby rivers, streets and canals, ultimately finding its way to the Buriganga River, a lifeline for residents who use the river to wash clothes, bath, irrigate agriculture and also for transportation. Those toxins resulted in chronic respiratory problems and skin diseases for many residents. The chemicals and heavy metals also turned the river pitch-black and killed off native species. Official estimates attribute 40% of the hazardous waste to the Hazaribagh tanneries.

Also surrounding the tanneries were suppliers, providing raw materials, chemicals, dyes and accessory products. With no treatment plant, thousands of liters of hazardous materials were dumped into the river daily.

To protect its residents, water supply and agriculture, the Bangladesh government decided to relocate the tanneries to the Dhaka suburb of Savar and established a water treatment plant nearby.

Problem solved … but at what cost?

Md. Amzad Hossain, an assistant professor of economics at the Sam M. Walton College of Business, teamed up with fellow economics researchers Nirman Saha, lecturer at the University Surry (England); Abu S. Shonchoy, associate professor at Florida International University; and Atonu Rabbani, professor at the University of Dhaka (Bangladesh) to study the socio-economic and health effects resulting from the move of the tanneries to Savar.

The International Growth Centre, a global research nonprofit based in London which focuses on the inclusive and sustainable growth in developing countries, awarded the researchers a $35,000 grant to study the environmental, socio-economic and health outcomes of the relocation efforts. Specifically, the research team will examine the health, labor markets, housing prices, business survival and environmental conditions of the Hazaribagh and compare it to those of Savar.

The IGC works with policymakers in developing countries to promote inclusive and sustainable growth through pathbreaking research. By studying the economic, environmental and health data, the researchers hope to share scientific insights with stakeholders in Dhaka and urge them to create a more comprehensive policy regarding water and air pollution to protect workers from expensive housing costs, lost jobs, medical maladies and overall sustainability.

“We need to show scientific evidence in order to convince policy makers to redesign industry policies to improve socio-economic and health outcomes,” Hossain said. “We need a systematic approach. People’s lives depend on it.”

Evidence indicates changes in rental rates, declining business opportunities and unemployment among displaced workers due to skill mismatches. The environmental impact to the Buriganga River remains unexplored. Researchers plan to study the flow of the river, timing of tannery closures and pollution estimates to determine the effect of the relocation of the tannery industry. Using control groups, they will analyze health outcomes, labor market conditions, housing process and pollution.

They will also examine changes in health and environment before the relocation began in 2014, during the move, and finally after the process was completed in 2022.

Evaluating the relative effectiveness of such relocation policy will yield crucial insights for crafting future regulations, ensuring a balanced approach toward economic growth and environmental well-being.  The researchers will present their findings to the Bangladesh government and share insights on policies within developing countries with similar industrial and environmental challenges.