Bangladesh, a country with major part of the coastline comprising a marshy jungle, the Sundarbans, the largest mangrove forest in the world and home to diverse flora and fauna, including the Royal Bengal Tiger, is a developing country from economy point of view. Country’s per capita income in 2008 was US$1389 (adjusted by purchasing power parity) lower than the world average of $10,497. According to the gradation by the International Monetary Fund, Bangladesh ranked as the 48th largest economy in the world in 2008, with a gross domestic product of US$224,889 million. The economy has grown at the rate of 6-7% p.a. over the past few years. Bangladesh's textile industry, which includes knitwear and ready-made garments along with specialized textile products, is the nation's number one export earner. The sector, which employs 2.2 million workers, accounted for 75 per cent of Bangladesh's total exports of US$10.53 billion in FY2005-06, in the process logging a record growth rate of 24.44 per cent. Mr Abdul Latif Siddique is the Minister, Ministry of textiles & jute, Bangladesh. He was born in the village Chatihati in 1937, and is a graduate in Bengali language and literature as well as postgraduate from university of Dhaka. Right from his boyhood, Mr Siddique had able qualities and attitude of a successful leader. Since youth he has been proactive in nationalism, anti-autocratic movement and in the struggle for preserving the legal rights of the backward multitude of the society. His spirit of protest against injustice has cost him several time imprisonment and exile. However, his zest for truth, prosperity and upliftment of society had helped him to overcome all impediments in becoming the voice for multitude and in the year 1964-65 he was elected Vice President of Karotia Sadat College Students Union. For his straight forwardness and firm confidence he was always distinctive among the workers of all levels of Bangladesh Chatra League. He was active in the movement in support of the Sixpoint Movement of 1966 and alongside he was a glorious organizer of the mass upsurge of 1969. As an organizer he played an unprecedented role in the liberation movement of 1971. All levels of liberation organizations and leaderships of Tangail were just the output of his direct guidelines. He was elected as Member of Parliament in the general elections of 1970, 1973, 1996, and 2008. After the stunning success of Awami League led grand alliance in the election
Mr Siddique, Fibre2Fashion extends a warm welcome to you. Thanks for joining the talk on Face2Face! Let us start with the GDP figures for 2008; it marked 6.30% real growth rate. What has been the contribution of Textile & Garment industry in this count and what significance it holds in country’s economy?
According to the estimates of Bangladesh Bureau of Statistics (BBS), the GDP growth rate, estimated to be 6.21% in the financial year 2007-08, which is slightly lower compared to 6.43% of the previous fiscal year, due to slow down of the growth in agriculture sector particularly in the crops and horticulture sub - sector. Textiles and Export-oriented Ready Made Garment (RMG) industry play an important role in the economic development of Bangladesh and contributed 80% of national foreign exchange earning in addition of meeting the lion portion of the domestic demand for textile and apparel products in the last financial year 2008-09. The textile and garments industry provides employment to about 4.5 million people, majority of them are women. Textile and garment sub-sectors account for the second highest position in terms of employment only after agriculture sector. This sub-sector has been making a significant contribution towards the growth of the economy during the last two decades in terms of employment generation, manufacturing value addition and foreign exchange earnings.
Well that definitely makes it a vital sector for economy. So, in your opinion, how is Global Textile & Garment performing these days, and Bangladesh making its way into it?
This is highly encouraging to note that the textile and export-oriented garment industry of Bangladesh has achieved a burgeoning growth during the last two and a half decades. Bangladesh being an LDC had been enjoying quota free market access facilities for export of Textile and Garment (T&G) to many countries until phasing out of Multi Fibre Arrangements (MFA) from January 2005. It was apprehended that export of textile and garments might face a set back after phase out of quota free market access under MFA. But the export of T&G, even after phasing out of MFA quota experienced an unprecedented growth during the post- MFA period showing export value of US$ 5.68 billion in 2004 to US $9.80 billion in 2006-07. The share of knit-wear export in 2003-04 was 38%, which increased to 50% in terms of value but in terms of quantity, knit-wear export surpassed the woven garments mainly due to the strong backward linkage developed in the knitting sector of the country in the recent years. This was also possible mainly due to the EU – GSP facilities under EBA and EU safeguard measures against China and duty free market access of Canada, Australia, Japan, New Zealand and Norway. Another phenomenon of post MFA situation that global garment export increased but fabric movement declined and supply sources have been reduced due to end of guaranteed market survival of the competitive suppliers and gains for sources having full value chain facilities.
But the global economic recession started in the recent years created a negative impact on the overall demand of T&G products. This has also affected the export market situation of T&G products of Bangladesh in the following ways:
(i) export order reduced to a considerable level,
(ii) the buyers are offering unusually low price to the manufacturers / exporters and
(iii) the profit margin for T&G export now reached to a minimum or even lower than the break-even level.
Under the above mentioned situation, Bangladesh is now facing severe competition with the textile rich countries like China, Pakistan, India, Indonesia and many other countries in respect of export of T&G products. Bangladesh is now trying to overcome the marketing crisis of T&G by enhancing financial package, rescheduling of loan and repayment of overdue interest at a reasonably reduced rate, strengthening human resource development programme etc.
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