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RMG sector crown jewel of country's export
09
Aug '08
Bangladesh takes pride in its Readymade Garment industry which is the country's highest foreign exchange earner accounting for 75 percent of the total exports made from the country.

The sector has carved a niche in the international market and has earned a reputation for itself and which has come after years of struggling and hard work. However, China also needs to be given indirect credit for the flourishing trade of garments in Bangladesh because, had it not been for its appreciation of Yuan against dollar and rising labor cost, Bangladesh would have still been a average performer in the global apparel markets.

International markets which were being monopolized by a few countries suddenly saw Bangladesh coming into prominence. This was mainly because increased cost of doing business in China and other countries like Vietnam, coupled with unsound working conditions drove most of the investors out of those countries.

On the other hand Bangladesh, with its vast and cheap human resource and attractive investment policies, stood out as a more lucrative alternative to other countries. So much so that countries like Russia and Uzbekistan have thrown open their doors for apparel exports from Bangladesh. In fact, the former has even gone to the extent of hiring skilled Bangladeshi labors for its domestic industry.

In contrast to the strong currencies of India and China, Bangladesh taka is still weak giving the country an edge over its competitors in gaining export orders. This has motivated the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) to nearly double its target to fetch US $25 billion by 2010.

In the meanwhile, the country is also striving hard to win favors from US for acquiring duty free access to its markets through the passage of the New Partnership Development Act (NPDA). Experts strongly believe that if Bangladesh gets the approval, it was likely to do a lot better than it is at present.

The fiscal year 2007-08 saw Bangladesh earning US $14.110 billion in export revenues, registering a growth of 15.87 percent compared to the previous year. The largest contribution, as always, came from the readymade garment (RMG) sector.

Although the target set by the Government was $14.500 billion for fiscal 2007-08, the growth realized was still close and very substantial. Of the total revenues fetched, woven and knitwear, the two key sub sectors of RMG, alone brought in some $10.699 billion.

While the knitwear sub sector earned $5.532 billion in July- June period, up by 21.50 percent over the corresponding period last year, woven garments fetched $5.167 billion registering a growth of 10.94 percent compared to the same period of 2006-07.

However, the garment sector of Bangladesh have been facing serious problems in recent times which require immediate solutions if it is to secure its dominance in the international market.


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