Interviews
'Slide in apparel exports can wreck economy' - Experts
16 Apr '09
2 min read
The economy of Bangladesh is very much dependent on exports from the garment industry which realizes a value to the tune of US $11 billion and provides direct and indirect employment to millions of people in the country, particularly women of Bangladesh.
But the tsunami like economic crisis and the resultant slowdown has brought down the high flying industry which was chalking phenomenal growth rates in the last few years and has the potential to wreck the economy of the country, brought about by falling exports.
The slowdown in growth can have a multiplier and disastrous effect on the allied industries like transportation, services and construction, which in turn will affect the overall economy of the country and also lead to mass unemployment.
The industry which was registering awesome growth rates of nearly 50 percent in the beginning of the new fiscal in July 2008 saw it slithering down to just 4 percent in February 2009. Along the way the garment sector has also lost its key edge it was noted for.
In the prior years, the industry was able to compete with other competitor countries like China, India and Vietnam on the strength of its price competitiveness and is the main reason for the exponential growth in recent years.
But in a meeting held last week with global apparel retailers, the garment industry was advised and warned by the retailers like Nike, Gap etc to quote competitive prices akin to those quoted by China and India if not less, if they wanted the order flow to be maintained.
The depreciation of the Indian and Pakistani rupee has also worsened the situation for these beleaguered apparel exporters. Due to the depreciation, the Indian and Pakistani industry is able to quote even lower prices, to the detriment of the sector in Bangladesh.
In the last fiscal, the economy had grown by 6.2 percent and the government had forecast a growth of 6.5 percent which now looks unachievable under the current circumstances. The World Bank has predicted a 2.5 percent lower growth than the one targeted by the government.
But the tsunami like economic crisis and the resultant slowdown has brought down the high flying industry which was chalking phenomenal growth rates in the last few years and has the potential to wreck the economy of the country, brought about by falling exports.
The slowdown in growth can have a multiplier and disastrous effect on the allied industries like transportation, services and construction, which in turn will affect the overall economy of the country and also lead to mass unemployment.
The industry which was registering awesome growth rates of nearly 50 percent in the beginning of the new fiscal in July 2008 saw it slithering down to just 4 percent in February 2009. Along the way the garment sector has also lost its key edge it was noted for.
In the prior years, the industry was able to compete with other competitor countries like China, India and Vietnam on the strength of its price competitiveness and is the main reason for the exponential growth in recent years.
But in a meeting held last week with global apparel retailers, the garment industry was advised and warned by the retailers like Nike, Gap etc to quote competitive prices akin to those quoted by China and India if not less, if they wanted the order flow to be maintained.
The depreciation of the Indian and Pakistani rupee has also worsened the situation for these beleaguered apparel exporters. Due to the depreciation, the Indian and Pakistani industry is able to quote even lower prices, to the detriment of the sector in Bangladesh.
In the last fiscal, the economy had grown by 6.2 percent and the government had forecast a growth of 6.5 percent which now looks unachievable under the current circumstances. The World Bank has predicted a 2.5 percent lower growth than the one targeted by the government.
Fibre2fashion News Desk - India
Popular News
Leave your Comments
Editor’s Pick
Esteemed Clients
-Ltd..jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Thermore (Far East) Ltd.")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Telangana State Industrial Infrastructure Corporation Limited (TSllC Ltd)")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Taiwan Textile Federation (TTF)")
