Orthodox trade unions may discourage investments in RMG sector

18 May '11

2 min read

The export-oriented readymade garments (RMG) industry is a key achievement of Bangladesh over the last 30 years.

Not only has a top-notch export-oriented apparel sector evolved in the country during the period, but the sector even holds the potential to further grow into an extremely dynamic one, to prove greatly advantageous for the economy.

Today, the country houses over 5,000 garment units employing around 3.5 million workers.

However, the industry seems to be far from having attained a saturation point, as just like last year, the country's garments exports this year too are growing vigorously.

The country exports in bulk to traditional export markets like the US and Canada, and is also penetrating in new considerably bigger markets like the CIS nations, Japan, New Zealand, South Africa and Australia.

Looking at the present scenario, it seems that Bangladeshi RMG industry may soon grow its production capacity almost two-fold, so as to earn substantial foreign exchange earnings and to ease poverty situations in the country through employment generation.

However, when on one hand such positive developments are coming up, on the other hand the industry is facing fresh issues of workers discontent.

However, the garment sector entrepreneurs opine that, with a steady rise in workers' wages in adherence to a tripartite deal between them and the workers, there is no scope for such distress on part of workers.

Low-cost labour is the strength of Bangladesh and even after a rise in wages; the country's RMG industry still remains to be more economical in terms of wages as compared to China, and this has greatly helped the country to gain considerably in the current competitive regime.

However, a proposed upcoming amendment in the Labour Law, 2006, which proposes to permit 100 percent trade unionism in the sector, is likely to kill this economical labour advantage.

Orthodox trade union practices have the capacity to stem the flow of new investments in the fledgling RMG sector, said an expert.

Fibre2fashion News Desk - India

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