(Reuters) - The owners of 300 Bangladesh garments factories shut their operations indefinitely on Saturday after days of violent pay protests by workers, threatening the country's biggest export already impacted by the global downturn.
The decision to close all factories at Ashulia, one of the country's biggest industrial zones on the outskirts Dhaka, came as talks between workers and owners had failed to break the deadlock.
"We have been compelled to close down all our factories at Ashulia," said Mohammad Shafiul Islam, president of the Bangladesh Garment Manufacturers and Exporters Association.
"We tried to resolve the issue (of wage increases and other benefits) amicably through discussion but the efforts did not produce any results," he told a news conference.
Witnesses said police had fired teargas and rubber bullets and used water cannons to disperse rampaging workers during five days of clashes. About 250 people including police have been injured and activists have vandalized dozens of vehicles and barricaded a vital highway.
"We had to take harsh actions to restore order as the defiant workers would not stop the violence," an Ashulia police officer said.
Workers are demanding higher pay following a rise in food and utility prices. After violent protests in 2010, Bangladesh nearly doubled the minimum wage for millions of garment workers to 3,000 taka ($37) a month.
Authorities on Saturday deployed extra police at Ashulia fearing the shut factories could be attacked and vandalized by restive workers.
Garments, which made up $18 billion of Bangladesh's record $23 billion exports in the year to June 2011, offer a crucial lifeline to the poor South Asian country, along with remittances from expatriate workers.
Business leaders and analysts said the recent unrest would have a negative impact on exports, which fell for the third month in a row in May as the euro zone debt crisis continued to subdue the country's economy.
Bangladesh's low labor costs have helped it join the global supply chain for low-end textiles and clothing, manufacturing garments for international brands such as JC Penney, Wal-Mart, H&M, Kohl's, Marks & Spencer and Carrefour.