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6 million workers in the industry have created a large demand for consumer goods.A regular source of earning increases the basic consumption needs such as improved diet, better healthcare, improvements in family utensils and housing conditions etc. The sector has created an increasing demand for consumption of low cost commodities, cosmeticsitems, dresses, footwear, fast food and other products. A whole industry has been createdto service this growing demand and created employment opportunities for hundreds of thousands of people. 2.7 SOCIAL IMPACTS OF THE RMG SECTOR Women Empowerment It is well recognized that womens participation in income generation activities lendsthem a better status within the family and provides them with considerable freedom. A job ensures equitable access to household resources (nutrition) and larger investment onfemale human capital (health and education). .At present, this sector has created highestemployment opportunity in the country where nearly 2 million women are working.As a result the distress, poor, divorced and suppressed women of thecountry now dont think themselves as helpless. Savings Regular earning enables a large number of the garment workers to go for some savings.Workers also get family pension schemes etc. Thus they create savings. Child Labor Bangladesh responded positively to the international requirement of elimination of childlabor from the garments sector. Under the Memorandum of Understanding jointly signed by BGMEA, ILO, UNICEF and US Embassy, Dhaka on 4 July 1994, Bangladesh pledged to eliminate child labor by November 1996. Accordingly, it took necessarymeasures to do so. The laid-off children were provided financial support so that theycould attend schools until they attain the age of 15. BGMEA and some NGOs jointlyoperate a number of schools for these children Population Control Employment opportunities especially for women created positive impact on family planning and population control in the country. Independent working-women are gettingmore conscious about the advantage of a small family, and they are adopting modernfamily planning methods. Adolescent girls are working to avoid early marriage as theyhave their own source of income and are self-dependent. 2.8 Problems Regarding With RMG: The garment industry of Bangladesh has been the key export division and a main sourceof foreign exchange for the last 25 years. National labor laws do not apply in the EPZs,leaving BEPZA in full control over work conditions, wages and benefits.

Garmentfactories in Bangladesh provide employment to 40 percent of industrial workers. Butwithout the proper laws the worker are demanding their various wants and as a resultconflict is began with the industry, such as, Low working salary is another vital fact which makes the labor conflict. Worker made strike, layout to capture their demand. Some time bonus And theovertime salary is the important cause of crisis Insufficient government policy about this sector is a great problem in GarmentsCompany. lack of marketing tactics absence of easily on-hand middle management a small number of manufacturing lack of training organizations for industrial workers, managers and supervisors,managers, autocratic approach of nearly all the investors fewer process units for textiles and garments sluggish backward or forward blending procedure , incompetent ports entry/exitcomplicated and loading/unloading takes much time time-consuming custom 2.9 Safety Needs Safety need for the worker is mandatory to maintain in all the organization. But withoutthe facility of this necessary product a lot of accident is occur incurred every year inmost of the company. Some important cause of the accident are given below- Routes are blocked by storage materials Machine layout is often staggered Lack of signage for escape route No provision for emergency lighting Doors, opening along escape routes, are not fire resistant. Doors are not self-closing and often do not open along the direction of escape. Adequate doors as well as adequate staircases are not provided to aid quick exit Fire exit or emergency staircase lacks proper maintenance Lack of proper exit route to reach the place of safety Parked vehicles, goods and rubbish on the outside of the building obstruct exits to theopen air Fire in a Bangladesh factory is likely to spread quickly because the principle of compartmentalization is practiced Lack of awareness among the workers and the ownersBut now the situation is much improved and we found, all the surveyed garments arefulfilling the requirement of emergency exit. It is provided in all the cases, signage is present and fire fighting equipments are up to date, a departure from the past. Even firedrill is held once in a month. 2.10 Prospects of the RMG Industry Despite many difficulties faced by the RMG industry over the past years, it continued toshow its robust performance and competitive strength. Factors like price competitiveness,enhanced GSP facility, market and product diversification, cheap labor,

increased backward integration, high level of investment, and government support are among thekey factors that helped the country to continue the momentum in export earnings in theapparel sector. Some of these elements are reviewed below: Market Diversification Bangladeshi RMG products are mainly destined to the US and EU. Back in 199697,Bangladesh was the 7th and 5th largest apparel exporter to the USA and European Unionrespectively. The industry was successful in exploring the opportunities in markets awayfrom EU and US. In FY07, a successful turnaround was observed in exports to thirdcountries, which having a negative growth in FY06 rose three-fold in FY07, whichhelped to record 23.1 percent overall export growth in the RMG sector. It is anticipatedthat the trend of market diversification will continue and this will help to maintain thegrowth momentum of export earnings. Product Diversification In the globalize economy and ever-changing fashion world, product diversification is thekey to continuous business success. It is clear that value addition accrues mostly in thedesigner items, and the sooner local entrepreneurs can catch on to this trend the brighter be the RMG future. Backward Integration RMG industry in Bangladesh has already proved itself to be a resilient industry and can be a catalyst for further industrialization in the country. If Bangladesh wants to enjoyincreased market access created by the global open market economy it has no alternative but to produce textile items competitively at home through the establishment of backwardlinkage with the RMG industry. Flow of Investment It is important to have significant flow of investment both in terms of finance andtechnology. However further progress would be necessary to improve and sustaincompetitiveness on a global scale. Policy Regime of Government Government of Bangladesh has played an active role in designing policy support to theRMG sector that includes back-to-back L/C, bonded warehouse, cash incentives, exportcredit guarantee scheme, tax holiday and related facilities. The reduced tax rates andother facilities are likely to have a positive impact on the RMG sector. Labor Productivity In Bangladesh, the garment workers are mostly women with little education and training.Bangladesh must look for ways to improve the productivity of its labor force if it wants tocompete regionally if not globally. ]Research and Training The country has no dedicated research institute related to the apparel sector. RMG ishighly fashion oriented and constant market research is necessary to become successful inthe business. A facilitating public sector role can be very relevant here. 2.11 Challenges of RMG Industry: Both external and internal factors contributed to the phenomenal growth of RMG sector.One external factor was the application of the GATT-approved Multifibre Arrangement(MFA) which accelerated international relocation of garment production.

Under MFA,large importers of RMG like USA and Canada imposed quota restrictions, which limitedexport of apparels from countries like Hong Kong, South Korea, Singapore, Taiwan,Thailand, Malaysia, Indonesia, Sri Lanka and India to USA and Canada. On the other hand, application of MFA worked as a blessing for Bangladesh. As a least developedcountry, Bangladesh received preferential treatment from the USA and European Union Ready made garments (RMG) Indystry and its contribution in Bangladesh economy Ready Made Garments Sector And its Contribution to the Bangladesh Economy

Letter of Transmittal Date: 05 April 2011 To Imrana Sharmin Lecturer Department of Economics Faculty... (More) Add To Collection 2.4K Reads 8 Readcasts 6 Embed Views

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