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Abstract The phase-out of the quota is likely to have particular significance f or the export of Bangladesh apparels to the

US market. MFA’s impacts are not much related to a question of our $2 billion exports to the USA; or the $5 billion worth of exports made by Bangladesh globally. Rather, it is a question of how Bangladesh’s entire economy will be affected by the issue of quota phase out. RMG exports constitute about 75% of Bangladesh’s annual export and provide direct employment to 1.5 million females and indire ctly an additional 8 to 10 million people. The global clothing trade is evolvin g on a continuous basis and that the phase out of quota restrictions and forming of trade blocs has become a reality. Moreover Bangladesh is convulsed by fierce class struggles, centered on the country’s garment industry. Many tens of tho usands of workers have gone on strike, blocked roads, attacked factorie s and other buildings, demonstrated, fought the police and rioted in t he streets. Every day comes news of fresh strikes in a variety of in dustries —mainly the ready-made garment (RMG) sector, but also mill workers, riv er transport workers, rail workers, journalists, lecturers and teachers. The revolt began on 20 May2006 with garment workers’ strikes in the Ba ngladeshi capital Dhaka — beginning in a small number of factories over iss ues including the arrest of worker activists and non-payment of wages. By 2 3 May2006 this struggle had been generalized, with action at a much la rger number of factories and demonstrations across the city. A massive a rmy and police presence around garment factories, in some cases complet ely blockading and creating check points for entry to Export Processing Zones, temporarily calmed things; but strikes continued to take place at nume rous factories, leading to solidarity strikes from nearby workplaces and semi-spontaneous demonstrations.

Introduction The tremendous success of readymade garment exports from Bangladesh over the las t two decades has surpassed the most optimistic expectations. Today the apparel export sector is a multi-billion-dollar manufacturing and export industry in th e country. The overall impact of the readymade garment exports is certainly one of the most significant social and economic developments in contemporary Banglad esh. With over one and a half million women workers employed in semi-skilled an d skilled jobs producing clothing for exports, the development of the apparel ex

Literature Review Several authors have analyzed aspects of the garment industry in Bangladesh. The Bangladesh Planning Commissi on under the Trade and Industrial Policy (TIP) project also commissioned several studies on the industry. Islam and Quddus (2006) present an overall analysis of the industry to evalua te its potential as a catalyst for the development of the rest of the Bangladesh economy. Of the various aspects of the industry. One of the few studies on the Bangladesh apparel industry to be publish ed in a reputed journal in the U. TOKIO MODEL LIMITED. because of convenie nce of the field work and easy communication. Hossain and Brar (2004) consider some labor-related is sues in the garment industry. There are several studies including the Bangladesh Institute of Development Studies (BIDS) study by Salma Chowdhury and Protima Mazumdar (1991) and the Bangladesh Unnayan Parisad (1990) study on this topic.port industry has had far-reaching implications for the society and economy of B angladesh. Sampling plan Garments Company of Dhaka are constitutes as the study area. Both of these studies use accepted survey and research met hodology to analyze a wealth of data on the social and economic background. I tried to get rid of any kind of personal biasness and taking true information. Wiigton (2000) pro vides a good overview of this industry. For the crisis condition of Bangla desh it was difficult for us to collect data form more samples. prob lems and prospects of female workers in the RMG sector. we go for different garments company and the company who intended to talk with us is t aken as a sample. Data Collection For the assessment. Quddus (2006) presents a profile of the apparel se ctor in Bangladesh and discusses some other aspects of the industry. Most of the analys is and discussions of this study have been made on the basis of the information . Professor Muzaffar Ahma d looks at the industrial organization of the sector and discusses robustness an d long-term viability of apparel manufacturing in Bangladesh. Personal interview technique was applied while fill up the questionnaire on respondents.S. especially the developments in the early years. both primary and secondary data was collected. Above it. Quddus (200 6) presents results from a survey of apparel entrepreneurs and evaluates the per formance of entrepreneurs and their contribution to the success of this industry . The sample garments companies who are interviewed are given in a chart: Name of the Garments Company Millenium Garments Limited RAHAN GARMENTS (PVT) LTD ALAM FIBER IMPEX Ltd. For this we i nterviewed 5 garments company through using a structured questionnaire. is that of Yung Whee Rhee (2003) who present s what he calls a “catalyst model” of development. Data analysis We analyzed the data by averaging the response of the sample. FABRICS AND COMMODITIES EXCHANGE LTD. the problems and the working conditions of female workers have received the greatest attention.

there is a possibil ity of getting fake information. We have taken 5 garments company to g ather data on the present situation of the garments industries as well as proble m regarding and the future of the industries. This risk was unavoidable. the readymade garment export industry has been the proverbial go ose that lays the golden eggs for over fifteen years now. we went to different garments company and collect information from the personnel. • Another limitation of this study is the person’s private information were not disc losing some. might dama ge the company’s image. data and information for obvious reasons. Given the d ominance of the sector in the overall modern economy of Bangladesh. Alt hough in gross terms the sector’s contributions to the country’s export earnings is . If the surveyed personnel provide us with any f abricated information about their opinion of their organization. the respondents might provide s ocially acceptable answers. • The questionnaire contains some questions that. if answered properly. The events in 1998 serve to highlight the vulnerability of this industry to both internal and external shocks on the demand and supply side. this vulnera bility should be a matter of some concern to the policymakers in Bangladesh. • Lack of proper authority to conduct the interview program. • Lack of experience in this field. then the report findings may be erroneous. Limitations of the Report Since our study is based on both primary and secondary data. • This survey made on crisis situation of Bangladesh. Analysis Technique & Report Writing At first. Above all. so it was difficult to colle ct more samples. observation of the interviewers has also been an important component of analysis and discussion. Besides. The sector now domina tes the modern economy in export earnings. we approached according to the following p rocedure: The Bangladesh Garment Industry For Bangladesh. In preparing this report.obtained from the interview with the questionnaires. Scope of the Study This study has focused upon the various problems regarding with the garments com pany and the prospect of these industries. which could be very much useful. The no table ones are as under: • The survey was conducted in a very short time so we were not able to collect mor e information. secondary impact and employment gener ated. this study is weak in some points. In this type of questions. • Only the big and the reputed Garments Company consider here as sample.

where the raw material and the finished products are shipped in an d out. Preliminary data and informal evidence indicate that this sector seems to have w eathered the devastating floods relatively well. transportation and other forward and backward linkage sectors of the economy. Despite increased dependence on air transportation. In FY 06. The dependence on a single sector. It is heartening to observe t hat the knit products are rapidly gaining share in overall garment exports as th ese products are sold in quota-free markets and reflect the strength of Banglade shi producers in the fully competitive global apparel markets. The industry responded by calling upon the Bangladesh navy to help with trawle rs and renting a plane from Thai Air that was used to directly fly garment consi gnments from the Dhaka airport to the Chittagong airport several times a day. The floods disrupted the normal flow of traffic on this road. The Dhaka-Chittagong road remains the main transportation link con necting the production units. is a matter of policy concern. this road link was completely severed for several days when large se ctions of the road went under water for a few weeks during the latter phase of t he floods. it remains vulnerable to domestic supply shocks and the smooth functioning o f the banking. Excepting FY02. In fact.around 74 percent. Over the past one and half decade. RMG’s contribution is highly remarkable. This delinking of the road connection between Dhaka and the port in Chittagong was as serious a threat as one can imagine for the garment exporters.5 percent per annum. no matter how resilient or sturdy that sector is. mostly situated in and around Dhaka and the port i n Chittagong. howev er. it reaches 13 percent of GDP which was only about 3 percent in FY91. We believe the policymakers in Bangladesh should work to reduce this dependence by moving quickly to develop the other export industries using the lessons learned from the success of apparel exports. Eventually. The industry is one hundred pe rcent export-oriented and therefore insulated from domestic demand shocks. earnings reached about 8 billion USD. trucks remain the ma in vehicles for transporting raw materials and finished products for Bangladesh garment exports. This is a clear indication of the i . Picture: Garments products of Bangladesh Contribution of the RMG Industry RMG business started in the late 70s as a negligible non-traditional sector with a narrow export base and by the year 1983 it emerged as a promising export earn ing sector. the industry registered significant positive growth th roughout this period In terms of GDP. which was only less than a billion USD in FY91. another way to reduce the vulnerabilit y is to diversify the product and the market mix. RMG export earnings have increased by mo re than 8 times with an exceptional growth rate of 16. in net terms the share would be much less partially because t he backward linkages in textile have been slow to develop. presently it contributes around 75 percent of the total export earni ngs. Support for the appare l sector should not be reduced.

The export made by Garments Industries of Bangladesh is improving year after yea r except some of the year. The sector opened up employment opportunities for many more individuals through direct and indirect economic activities.88 1993 – 94 1182. The objective of this paper is to identify the prospects of RMG industry after the MFA phase out by analyzing the current scenario along with different policy measures and the available options in order to be more competitive in the new regime.02 22. But above it. Readymade Garments Industries is the leadin g sector in export sector. shutdown of company. Year Export (in US $ million) Percentage change 1991 – 92 624. which pr ovides a competitive edge over its competitors. It is the largest exporting industry in Bangladesh. inflation etc. industrializati on and contribution to GDP within a short span of time. One of the key advantages of the RMG industry is its cheap labor force. The sector has created jobs for about two million people of which 70 percent are women who mostly come from rura l areas.19 1995 – 96 1555. A 1999 study found the industry supporting approximately USD 2.57 36.ndustry’s contribution to the overall economy. road transportation. The sector has also played a significant role in the socio-economic development of the country. and subsidies will become less feas ible and less relevant. The industry plays a key role in employment generation and in the provision of income to the poor. woman empowerment and poverty alleviation. quotas. Liberalization of trade following the Uruguay Round agreem ent presents opportunities as well as challenges for a developing country like B angladesh in RMG sector. which eventually helps the cou ntry’s social development.43 1994 – 95 1445. Over the past twenty years. aimed at bringi ng textiles and clothing within the domain of WTO rules by abolishing all quot as by the end of 2004.0 billion. it attaine d a high profile in terms of foreign exchange earnings. so that cou ntries affected by the MFA could take the necessary steps to adjust to the new t rading environment. Exporting Condition of Garments Industry The Ready-Made Garments (RMG) industry occupies a unique position in the Banglad esh economy.16 32.49 1992 – 93 866. political proble m. In the Post-Uruguay Round period. insurance . In a liberalized trade regime. It provides an adjustment period of 10 years.82 38. exports. traditional instrume nts of trade policy such as tariffs. economic problem. By taking advantage of an insulat ed market under the provision of Multi Fibre Agreement (MFA) of GATT. railway container services.79 . hotel. It also plays a pivotal role to pro mote the development of other key sectors of the economy like banking. which experienc ed phenomenal growth during the last 20 years. layout. the number of manufacturing units has grown from 180 to over 3600. when the value of exports stoo d at a little over USD 4. etc . tourism. are the prime cause of decreasing export in this important sector. shipping. The Agreement on Textile and Clothing (ATC) introduced in 1994. Nearl y two million workers are directly and more than ten million inhabitants are ind irectly associated with the industry. competition among textile s and clothing exporting countries is likely to become intense. Strike.0 billion worth o f economic activities (Bhattacharya and Rahman).

But if o ur Government take some essential law and break out the wall of biasness then th e position of Bangladesh in Garments sector would be hope to better.29 02 8.25 2547.98 4349. 2006 Table: Quota Prices of Selected Garments Items Exported Position of Bangladesh is exporting product in USA is not very satisfactory but this situation is better than any other condition of the previous time.68 05 7.74 04 5.83 1999 – 00 26.41 4859.83 4019. Table: Exports of Knit and Woven Garments to the United States (Source: Export Promotion Bureau of Bangladesh) Findings .12 5686.21 06 15.35 Figure: Year Export by the garments industries (in US $ million) Average Quota Prices of Selected Garments Items Exported by Bangladesh.01 2000 – 01 2001 2002 – 2003 – 2004 – 2005 – 6.13 2228.83 4583.09 3781.47 1997 – 98 14.11 1998 – 99 17.19 03 11.7.94 3001.75 4912.67 1996 – 97 43.

From the survey we have found some tremendous information that help to build our practical knowledge about the garments industry of our country. Different types of modern equipment in here to run the production smoothly.000 Doz/ Month Approx. USA. Rahan started manufacturing and exporting from 1995. problems and the prospects of the se industries. Such as. It is one of the leading exports Garment Company of our country. Etam. S. More than 750 employees participate here i n the manufacturing activities. Their plant and office is located in the central part of the city. Short profile of the Company are given below- Millenium Garments Limited It is a manufacturing company. s portswear and knit & woven garments.S. This give security and convenience for the transportation of goods and all kinds of supports needed for daily production and financial facility. sewing and finishing machines supplied by mostly Singer and Brother. Oven & Knitwear Items. In these aspects we divided our finding into three main parts. U. Germany.7 Million. specialized in under garments. TOKIO MODEL LIMITED. France. .A. Man ufacturer and exporter of all type of apparels. U. Its production capacity is 29. More than 1200 employees fou nd their working place in this organization. Vesage. Its main market for exporting is European Countries. It is another leading Garment Company of our cou ntry. established in 1990. Spain. Through our sur vey we try to bring out the present situation. These topics are discussed below- Company profile We take information from five leading garments company to identify the problem o f this sector. UK. Fi rst part contains the general information about the garments industries of our c ountry and the other second and third part contains the problems and the prospec ts of these industries sequentially. Miles.000 square feet in one floor. Singapore. RAHAN GARMENTS (PVT) LTD It was founded in 1993. And the other customer gr oups are Ekinsa. Vetura.A. The total working area comprises of 29. Star Wear. Amcobus.450 pcs of different type of c utting. The company aut horized capital was in US $ 12. The company was established in 1990 as a Public Limited Company.

Some time bonus and the overtime sa lary are the important cause of crisis. Low working salary is another vital fact which makes the labor conflict. Timely s hipment is our business ethics. Reliability and cost effectiveness are on the utmost priority while we provide value added services to our vast growing client list. But without the proper laws the worker are demanding their variou s wants and as a result conflict is began with the industry. Garment factories in Bangladesh provide employment to 40 percent of indus trial workers. fewer process units for textiles and garments. Worker made strike. They demand they offer reasonable pric e for their products. Insufficient government policy about thi s sector is a great problem in Garments Company. There stay some motto with which Alam Fiber Impex willing to run. they would like to brief with their business process and how this could be of any int erest to their organization. layout to capture their demand. autocratic approach of nearly all the investor s. It was established in 1988. A highly qualified team o f QA foresees the manufacturing process. a small number of manufacturing methods. we never compromise with quality. Bangladesh they manufacture over 20 0. There are some other problems which are associated with this sector. incompetent ports.000 units a month including Knit. Woven and Sweater. National labor laws do not appl y in the EPZs. absence of easily on-hand middle management. Accordingly as a first step of their customer familiarization process. sluggish backward or forward b lending procedure. and Customer’s satisfaction is our motto.Fabrics & Commodities Exchange Ltd’s a well reputed Garments Exporters in Banglade sh. time-consuming custom clearance etc. Those arelack of marketing tactics. leaving BEPZA in full control over work conditions. supervisors and managers. entry/exit complicated and loading/unloadi ng takes much time. Picture: Labor. It basically works with the product of-RAWJ UTE (JUTE FIBER) JUTE YARN / JUTE TWINE JUTE CLOTH (HESSIAN / CBC) JUTE BAG / JU TE SACKS HANDICRAFTS READY-MADE GARMENTS.We maintain quality properly. wages and ben efits. Based in Dhaka. ALAM FIBER IMPEX LIMITED Alam Fiber Impex is one of the leading Exporter and Manufacturer s agents in Ban gladesh. lack of training organizations for industrial w orkers.Management conflict in Garments Industry According to our survey in five leading Company we found some problem which are given in a chart with their percentagePrimary Problems   . Problems Regarding With RMG The garment industry of Bangladesh has been the key export division and a main s ource of foreign exchange for the last 25 years.

Inefficient workforce 60% 40% 05. Licensing problem 20% 20% 06.Problems high medium low 3 2 100% 3 100% 0 100% 3 100% 1 100% 1 100% 3 100% 0 100% total 0 1 0 2 3 0 2 0 5 5 5 0 5 5 0 5 5 5 01. Unloading(RM) takes time 40% 40% 20% 04. Quota problem 80% 20% 1 60% 4 - 07. Credit problem 40% 60% 2 60% 2 3 100% 3 100% . Dependency on foreign market 100% 100% 07.Middle man affect 20% 60% 1 20% 3 100% 0 100% 2 100% 2 100% 2 100% 1 2 2 3 2 5 5 0 5 5 3 1 0 5 0 0 5 5 5 5 02. Trade block 0 40% 08.Raw-materials 60% 40% 02. Poor government policy 60% 40% 08. Communication gap 20% 40% 1 40% 06. Sluggish business linkage 40% 60% 03. Time consuming schedule 40% 60% 05. Marketing problems 1 20% 60% 20% 03. Machinery problem 100% 5 - 04. Labor unrest/strike 5 100% - Chart: Primary problems of Garments Industries Graph: Primary problems of Garments Industries Secondary problems Problems high medium low total 01.

Chart: Secondary problems of Garments Industries Graph: Secondary problems of Garments Industries Safety Problems Safety need for the worker is mandatory to maintain in all the organization. Even fire drill is held once in a month. all the surveyed garments a re fulfilling the requirement of emergency exit. Some important cause of the accident are given belowRoutes are blocked by storage materials Machine layout is often staggered Lack of signage for escape route No provision for emergency lighting Doors. But without the facility of this necessary product a lot of accident is occur incur red every year in most of the company. opening along escape routes. Bangladesh Faces the Challenge of Globalization . signage is present and fire fighting equipments are up to date. Doors are not self-closing and often do not open along the direction of escape. a departure fr om the past. are not fire resistant. It is provided in all the cases . goods and rubbish on the outside of the building obstruct exits to the open air Fire in a Bangladesh factory is likely to spread quickly because the principle o f compartmentalization is practiced Lack of awareness among the workers and the owners But now the situation is much improved and we found. 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. Fire safety in garments industry: Necessary Design matters Picture: Training are now providing to the workers about what they do when the f ire drill is held in garments industry.

A strong domestic sector and an improved overall investment environment will provide a more stable source of income . which has been the largest supplier of textiles and apparel to USA. Bangladesh was the 7th and 5th largest apparel exporter to the USA and European Union respectively. Prospects of the RMG Industry Despite many difficulties faced by the RMG industry over the past years. The industry was successful in exploring the opportunities i n markets away from EU and US.Bangladesh faces the challenge of achieving accelerated economic growth and alle viating the massive poverty that afflicts nearly two-fifths of its 135 million p eople. Some of these el ements are reviewed below. characterized by extreme land scarcity and a very high population density. In the wake of the 2001 global recession. This transition has been dictated by the count ry s resource endowment. Other fa ctors like price competitiveness. it cont inued to show its robust performance and competitive strength. progress in the human development indicators was even mo re impressive. During the 1990s. notable progress was made in economic performance. market and product dive rsification. Bangladesh is surpassed only by China and Cape Verde. The resilience an d bold trend in this MFA phase-out period partly reflects the imposition of ‘safeg uard quotas’ by US and similar restrictions by EU administration on China up to 20 08. In terms of the incr ease in the value of HDI between 1990 and 2001. This improved performance owed itself both to a slowdown in population growth and a sustained increase in the rate of GDP growth. During this time. i t will need to strengthen its domestic economy. While most low-income countries depend largely on the export of primary commodit ies. 6 percent by the latter half of the 1990s.6 per cent per annum in the first half of the 1980s to 3. increased backward integration.and will rekindle and sustain Bangladesh s economic growth. when measured by its improvement in the Human Development Index (HDI) as estimated by the United Nations Development Project (UNDP). Bangladesh s reliance on foreign count ries as a market for exports and as a source of remittances has become obvious.like what the garment industry has prov ided so far . T hese reforms were particularly aimed at moving towards an open economic regime a nd integrating with the global economy. If Bangladesh is to become less vulnerable to the economic fortunes of others. To meet this challenge. which averaged 5. making economic growth dependent on the export of labor-inte nsive manufactures. Bangladesh was in fact among the top performing countries in the 1990s. Bangladesh has made the transition from being primarily a jute-exporting co untry to a garment-exporting one. Back in 1996-97. Along with maintaining economic stabilization with a significantly reduced and declining de pendence on foreign aid. In FY07. creating jobs and markets at hom e. and government support are among the key factors that helped the country to continue the momentum in export earnings in the apparel sector. high level of investme nt. the economy appeared to begin a transition from stabili zation to growth. cheap labor. Market Diversification Bangladeshi RMG products are mainly destined to the US and EU.2 percent annually during the second half of the 1 990s. enhanced GSP facility. a successful turnaround was observed in       . The average annual growth in per capita income had steadily ac celerated from about 1. market-oriented liberalizing policy reforms were initiated in the mid-1980s and were pursued much more vigorously in the 1990s.

pajamas. Policy Regime of Government Government of Bangladesh has played an active role in designing policy support t o the RMG sector that includes back-to-back L/C. sweaters. Figure: Trend to back-to-back linkage If Bangladesh wants to enjoy increased 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 backward linkage with the RMG industry. 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. However. Hong Kong. Product Diversification The growth pattern of RMG exports can be categorized into two distinct phases. After the liberaliza tion of the quota regime some of the major textile suppliers Thailand. To some extent the industry has foreseen the need and has embarked on its own capac ity building. bonded warehouse. thi s vital industry still depends heavily on imported fabrics. product diversification is the key to continuous busi ness success. This is evident in the pace of lending to the RMG sector and in the rising import share of RMG related machinery. a nd the sooner local entrepreneurs can catch on to this trend the brighter be the RMG future. At the same time a recent WTO review points out that Bangladesh has not been able to ex ploit fully the duty free access to EU that it enjoys. It is anticipated that the trend of market diversification will continu e and this will help to maintain the growth momentum of export earnings. In part the momentum in th e post-MFA phase-out period is indicative of the efforts underway towards capaci ty building through backward integration. Howe ver further progress would be necessary to improve and sustain competitiveness o n a global scale.exports to third countries. It is clear that value addition accrues mostly in the designer items. Flow of Investment It is plausible that domestic entrepreneurs alone may not be able to develop the textile industry by establishing modern mills with adequate capacity to meet th e growing RMG demand. S econd phase is the emergence of knitwear products that powered the recent double digit (year-on-year) growth starting in FY04. which helped to record 23. In the globalized economy and ev er-changing fashion world. which having a negative growth in FY06 rose three-fo ld in FY07. Figure 3 indicates that the investment out look in this sector is encouraging. branded jeans. It is important to have significant flow of investment bot h in terms of finance and technology. embroidered w ear etc. shorts. jackets. Indonesia and Taiwan increased their own RMG exports. although the uncertainties before the MFA ph ase-out period caused a sluggish investment scenario. cash incentiv . India. trousers. which contributed the most. the entrepreneurs of the RMG sector hav e also been able to diversify the product base ranging from ordinary shirts. While this is pointed out to be due to stringent rules of origin (ROO) criteria.1 percent overall export growth in the RMG sector. T-s hirts. ladies and children’s wear to sophisticated high value items like quality suits. D uring the initial phase it was the woven category. Ch ina. Starting with a few items. the relative stagnation in exports to EU requires further analysis.

Also. while o thers like the Export Performance License (XPL) Scheme 37 were already in operation and were improved upon. Research and Training The country has no dedicated research institute related to the apparel sector. rebates were given on import duties and indirect taxes. tax holiday and related facilities. However. In Bangladesh. A facilitating public sector role can be very relevant here. These and related initiatives need encourageme nt possibly intermediated by donor-assisted technology and knowledge transfer. the industrializatio n philosophy of the government changed rather dramatically from the late 1970s w hen the emphasis was on export-oriented growth to be spearheaded by the private sector. The reduced tax rates and other facilities are likel y to have a positive impact on the RMG sector. Towards this end. During the 1980s. income tax rate for textile manufacturers were reduced to 15 percent from its earlier level for the period up to June 30. Some of them were new like the Bonded Warehouse Facility (BWF). The employment of an uneven number of unskilled labors by the garment factories results in low productivity and comparatively more expensive apparels. BGMEA has already established an institute which o ffers bachelor’s degree in fashion designing and BKMEA is planning on setting up a research and training institute. continuing growth of the RMG sector is dependent on the development of a strong backward linkage in order to reduce the lead time. Some of these reformed policies contributed considerably to the growth of the RMG industry in Bangladesh. export credit guarantee scheme. other factors constraining competitiveness of Bangladesh’s RMG exports i ncluded the absence of adequate physical infrastructure and utilities. Labor Productivity The productive efficiency of labor is more important determinant for gaining com parative advantage than the physical abundance of labor. exporters of non-tradit ional products received import licenses for specific products over and above the ir normal percentage allotment based on the f. there were tax reductions on export income. In Bangladesh. At prese nt government operates a cash compensation scheme through which domestic supplie rs to export-oriented RMG units receive a cash payment equivalent to 5 percent o f the net FOB value of exported garments. Under the XPL scheme. R MG is highly fashion oriented and constant market research is necessary to becom e successful in the business.es. an . then we think the future of this sector is highly optimistic. Bangladesh must look for ways to improve the productivity of its labor force if it wants to compete regionally if not globally. Infrastructural Impediments The existence of sound infrastructural facilities is a prerequisite for economic development. exporters of manufactured goods were entitled to get refund of duties and taxes paid on imported inputs used in export production. the garm ent workers are mostly women with little education and training. a number of incentives were introduced to encourage export act ivities. 2008.o. Because of cheap labor if our country makes the labor productivity in the apex position. various policy reforms were implemented in the 1980s a nd 1990s. South Korea and H ong Kong. At the same time. Bangladesh labor product ivity is known to be lower when it compared with of Sri Lanka. Under the Duty Drawback System.b. Supportive Government Policy In contrast to the public sector-led import-substituting industrialization stra tegy pursued during the first few years after independence. a nd export financing was arranged. value of their exports.

Government also have some responsibility to improve the situation by providingproper policy to protect the garments industries. proper strategic plan etc. The phase out was expected to have negative imp act on the economy of Bangladesh. exporters were exempted from paying duties and taxes on impor ts used in export production at the time of importation. reflected in the leakage of dutyfree imported fabrics in the domestic market. qui ckly loading facility in the port. The duties and taxes pay able on the imports were kept in a suspense account. Recommendation Bangladesh economy at present is more globally integrated than at any time in th e past. For certain fast-movin g items such as RMG. solve the license problem. a notional system of duty payments was adopted in 1982-83. Due to a number of steps taken by the industry. Recent data reveals that Bangladesh absorbed t he shock successfully and indeed RMG exports grew significantly both in FY06 and (especially) in FY07. could be used to overcome difficulties arising from weak governance. We hope by maintaining proper management an d policy strategies our country will take the apex position in future. when necessary. Our Garments Industries can improve their position in the world map by reducing the overall problems. maintainable time schedule for the product. Furthermore. Under this system. ke ep the industry free from all kind of political problem and the biasness. proper management polic y. Banglades h still remains competitive in RMG exports even in this post phase-out period. efficiency of the manager. The MFA phase-out will lead to more efficient global realignments of the Garments and Clothing industry. In particul ar. Credit must be provided when the industry fall in need. Such as management labor conflict. providing proper environment for the work. paradoxically enough also helped t he garment manufacturers to earn extra ‘profit’ and thereby enabled them to absorb t he ‘high cost of doing businesses – a fall out of bad governance. two policies– the SBW facility and the back-to-back L/C system. . poor governance. The discussion in this section clearly points to the positive contribution mad e by policy reforms to the growth of the RMG industry in Bangladesh. It also allowed garment manufacturers to earn more pr ofit which.d also all excise duties paid on exported finished goods. but were required to ke ep records of raw and 21packaging materials imported.led to signif icant reduction in cost of producing garments and enhanced competitiveness of Ba ngladesh’s garments exports. To be an upper position holder in the world Garments Sector there is no way exce pt follow the above recommendations. Liabilities to pay the amou nts in suspense were removed on proof of exports.

Bangladesh can lo ok forward to advancing its share of the global RMG market. exports. utility services and in the law and orde r situation. It is the largest exporting industry in Bangladesh.Suggestions Regarding Fire Safety We need to remember that when there is a fire. telecommunication network. The government and the RMG sector would have to jointly work togeth er to maintain competitiveness in the global RMG market. management of seaport. . installed and maintained Escape routes should be lighted at all times. Precautionary should need to be adopted are given below: Building should be constructed with fire resisting materials Adequate exits and proper escape routes should be designed Protection against fire and smoke should be ensured Electrical wiring must be properly designed. industrializati on and contribution to GDP within a short span of time. The industry plays a key role in employment generation and in the provision of income to the poor. To re main competitive in the post-MFA phase. By taking advantage of an insulat ed market under the provision of Multi Fibre Agreement (MFA) of GATT. Given the remarkable en trepreneurial initiatives and the dedication of its workforce. Bangladesh needs to remove all the struc tural impediments in the transportation facilities. the first thing one should do is to run away from it. a nd power supply. Smoke/Fire alarm systems must be installed adequate number of extinguishers should be provided Prior relationship with local Fire services should be established Conclusion The Ready-Made Garments (RMG) industry occupies a unique position in the Banglad esh economy. kept clear. which experienc ed phenomenal growth during the last 25 years. And this is what everyone does in such a situation. be indicated by signs Regular fire drills should be held Doors should be protected and should open along the direction of escape Doors should not open on the steps and sufficient space should be provided. But the situation become dangerous and tragic when the escape doorways and gates are fo und locked. it attaine d a high profile in terms of foreign exchange earnings.

“Coping with Post-MFA Challenges: Strategic Responses for Bangladesh RMG Sector”. Mannur. 2005. No. 1999. Rahman. Vol. J. Page 102-120. Azim. 55. “Contribution of the RMG S ector to the Bangladesh Economy”. Katti. DEPARTMENT OF MAMAGEMETN Faculty of Business Administration and Management. The Asia Foundation. 2006. Sarwat. “International Trade Implications and Futu re of Ready-Made Garments Sector of Bangladesh” Journal of Business Administration . Page 41-69. 2003. Montfort and Yongzheng Yang. 2000. and Nasir Uddin. Dhaka. Vol. D and M. Patuakhali Science and Technology University. “The End of Textiles Quotas: A Case Study of the Impact on Bangladesh”. World Trade Organization. “The End of Multi-Fiber Arrangement: Challenges and O pportunities for Bangladesh”. M. Vi kas Publishing House Pvt Ltd. Tahlil. No. D and M. Rahman. “Challenges for Garments Sector in Bangladesh After 2004: Avenues for Survival and Growth” Bangladesh Institute of I nternational and Strategic Studies Journal. J. 2002. 06. India. H. Paper 50. Rahman and A. 13. CPD Occasional Paper Series. Geneva. Mlachula. 3 & 4. 1997. 04. 05. Md. Bhattacharya. Banglades h. “Trade Policy Review”. 11. 12. Raihan. 24.. CPD Occasional Paper Series. Bow. IMF Working Paper WP/04/08. The Textile and Clothing Industry of Bangladesh in a Changing World Economy. Islam. Dhaka. Paper 7. 08.. CPD and The University Press Ltd. “The Textile and Clothing Industry of Ba ngladesh: In a Changing World Economy”. 23. 2004. 02. WBI Policy Note. Bhattacharya. 07. International Economics. Vijaya and Subir Sen. QUESTIONNAIRE ON   . “Experience with Implementation of WT O-ATC and Implications for Bangladesh”. “MFA Phasing Out and Indian Textiles In dustry: Selected Issues for Negotiation”. . Jahan. “Bangladesh’s Export Apparel Industry into the 21stCentury – the Next Challenge”.G. CPD Dialog Report No. 1999. Page 49-82. Abu Yousuf. CPD Dialog Report No. D. 2003. 1. Centre for Policy Dialogue. UNRISD Occasional Paper. M. Foreign Trade Review. 2000. “Female Employment Under Export-Prope lled Industrialization: Prospects for Internalizing Global Opportunities in Bang ladesh s Apparel Sector”. 09. 2001. 03. XXXIV No. Bangladesh. Bhattacharya. 10. 3 & 4. Vol.References 01. 2000 (second revised edition). 2000. 18. Sadequl. Abdullah.

Which are the exporting markets of our country? ……………………………………………..... ……………………………………………………………………………………. What is the present export market condition in garments industry? Very competitive Competitive Average Low 5.……………………………………… 3.……………………………………………………..……………………. Do you have any recent plan to enhance the exporting market? ………………………………………………………………………….…… ……………………………………………………………………………...“Problems and prospect of Garments Industry in Bangladesh and the Supportive Polic y Regime/ Current Stake of Affairs” 1..…. 2.…………………... From where you collect the raw-material of the Garment Industry? External source rnal source 7. No Do you face any problems in collecting raw-materials? Yes Inte ..………………………………. ry? What’s their desire and demand regarding the garments product of our count ………………………………………………….……………………………………… ……………………………………………...……………………………………………………….……… 6.......……………………………………… …………………………………………….. What type of products are produce in your industry? …………………………………………..…… …………………………………………………………………………..………………………………………… …………………………………….….…………………………..………… 4..

………………………………………………………………. If yes what are those? Search for new exporting market Try to increase the area of export establish new infrastructure and conducting training and development programs utilize the cheap labor force of our country Increase investment in this sector Others .... What are the remedial measures you have taken to solve these problems? ………………………………………………………….…….…. ? Do you have any recent plan/strategies to develop the current situation Yes No 15.……............8..……………………… ………………………………………………………….……………………… ……………………………………………………………….....……………………........... If faced what are those? ………………………………………………………...… 14..............………….. What are those? ……………………………………………………………………….. 12.…………………… 9. ries? What are the basic problems on the way of development in Garments Indust Recent political unrest situation Red alert situation of Caretaker Garment Labor unrest Unskilled labor Poor training and development problem Lack of investment Dependency on foreign market Trade blocks/EU/WB Poor Government policy Others How can manager mitigate these problems? 13...... Are there any government steps regarding these problems? Yes No 11......………… ………………………………………………………...... 10.. ……………………………………………………………...……………………… ………………………………………………………………... …………………………………………………………...……………………… ………………………………………………………….....………………………...……… ……………………………………………………………………...

……………………………………………… ...…………………………………………………………… …………………………………. As a manager of this origination what is your opinion on the prospects of the RGM Industry? ………………………..16.………………………………………………… …………………………………….