Could be there one particular reason or multiple reasons for the Pakistani textile sector investing in Bangladesh - a country which has emerged as the second biggest exporter of apparel to the US.
The number-1 reason is the rampant shortage of electricity and industrial gas, due to which units stay shut for long hours each day, unless they have captive generation, which again is expensive.
Secondly, Bangladesh-made clothing has been given duty-free access by 37 countries, which include the member states of the European Union, Australia and Canada.
There is also a distinct possibility that Bangladeshi apparel exports to the US could receive the same treatment from its biggest garment buyer in the near future, as garments cannot avail this facility right now.
However, the current Textile Minister – Mr Makhdoom Shahabuddin has been quoted as saying “Pakistani textile industry has not shifted to Bangladesh because of electricity and gas outages.
“But, because Bangladeshi goods, mainly apparels have been provided duty-free access by a number of developed countries, due to its status as a least developed country (LDC)”.
He went to add, “40 percent of the Pakistani textile industry and over 200,000 powerlooms have shifted to Bangladesh in the last five years, creating unemployment for hundreds of thousands of workers.
To add to the woes of the Pakistani industrial sector, the garment sector too has chosen Cambodia as an alternative destination for relocating their manufacturing units.
This was revealed to fibre2fashion recently by Mr Ijaz Khokhar who is Chief Coordinator of Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA), owing to continued electricity and gas supply problems in the country.
Incidentally, the Bangladeshi garment industry has proved to be crucial growth driver for the industrial sector in that country, thriving on the vast amount of cheap and unskilled labour, available.
Bangladesh has also achieved a GDP growth rate of 6.3 percent in 2011, when many countries experienced negative or sub-four percent growth rates, including the US and EU.
That apart, there are similarities in the culture of both countries as well, as both were once part of undivided India prior to 1947.
All these factors have mainly contributed, to Pakistani investments flowing in to Bangladesh.
Fibre2fashion News Desk - India
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