Interviews
Textile sector faces drop in investment
27 Aug '08
2 min read
Textile and Ready made garment industry is considered as one of the highest foreign exchange earner for Bangladesh. But in the recent past, the condition has deteriorated, making it difficult for the sector the work smoothly.
This is quite evident from the statistics provided by Board of Investment of Bangladesh, which shows that in the last fiscal that ran from July 2007 to June 2008, there has been a drop of 26 percent in investment.
According to experts, investments which had been around US $184 million in 2006-07 fiscal have plunged to $146 million during the last year. The most concerning factor is that the textile sector contributes almost 75 percent of the total earning from export.
Industry insiders are of the opinion, such a steep fall in the investment is a matter of concern, as this might have its impacts on the coming year.
In this regard, Mr Fazlul Hoque, President, Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) told Fibre2fashion, “There may be various reasons for this fall in investment. Investors are not happy with the business situation prevailing in the country. Electricity and natural gas shortage, lack of adequate financial resources and political uncertainty, all are responsible for entrepreneurs shying out to invest in the region."
Presently, the country is going through a shortfall of around 250 million cubic feet of gas and about 2,000 megawatts of electricity, every day. This situation is impelling many manufacturers to close down their facilities. This has created a fear factor among investors that they will not be able to gain any profit if they invest.
Mr Fazlul fears that this fall in investment in textile and garment sector will hamper the export growth.
Discussing about the labour problem in the country, Mr Hoque stressed, “Due to persisting inflation, labourers are suffering the most. Worker problems prevail through out the world, be it, a developed or poor country. But the latter faces it more severely. Inflation is taking its toll on the Bangladeshi labourers. In the past years the prices of food products have gone up to 30-40 percent.
What ever the problem may be it is always the labourers who would be at the receiving end. However, the Government is trying hard to improve the scenario by offering support for workers. They are planning to for a monthly allowance for workers to overcome inflation.
This is quite evident from the statistics provided by Board of Investment of Bangladesh, which shows that in the last fiscal that ran from July 2007 to June 2008, there has been a drop of 26 percent in investment.
According to experts, investments which had been around US $184 million in 2006-07 fiscal have plunged to $146 million during the last year. The most concerning factor is that the textile sector contributes almost 75 percent of the total earning from export.
Industry insiders are of the opinion, such a steep fall in the investment is a matter of concern, as this might have its impacts on the coming year.
In this regard, Mr Fazlul Hoque, President, Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) told Fibre2fashion, “There may be various reasons for this fall in investment. Investors are not happy with the business situation prevailing in the country. Electricity and natural gas shortage, lack of adequate financial resources and political uncertainty, all are responsible for entrepreneurs shying out to invest in the region."
Presently, the country is going through a shortfall of around 250 million cubic feet of gas and about 2,000 megawatts of electricity, every day. This situation is impelling many manufacturers to close down their facilities. This has created a fear factor among investors that they will not be able to gain any profit if they invest.
Mr Fazlul fears that this fall in investment in textile and garment sector will hamper the export growth.
Discussing about the labour problem in the country, Mr Hoque stressed, “Due to persisting inflation, labourers are suffering the most. Worker problems prevail through out the world, be it, a developed or poor country. But the latter faces it more severely. Inflation is taking its toll on the Bangladeshi labourers. In the past years the prices of food products have gone up to 30-40 percent.
What ever the problem may be it is always the labourers who would be at the receiving end. However, the Government is trying hard to improve the scenario by offering support for workers. They are planning to for a monthly allowance for workers to overcome inflation.
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Charath Narasimhan
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