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Easing of Myanmar sanctions; threat to B'desh RMG sector

30
Apr '12
Mr. Md. Hatem
The European Union has lifted sanctions imposed on Myanmar for one year, which could be further extended after reviewing the political situation. This could pose threat to the Bangladesh readymade garment (RMG) industry.

At their meeting in Luxembourg last week, foreign ministers of the EU countries decided to lift the embargo on Myanmar due to a string of political reforms undertaken by the Southeast Asian nation.

This announcement by the EU has opened doors for Myanmarese garment sector to export to the EU nations, an opportunity that it did not have earlier.

Myanmar has plenty of natural resources and once the infrastructure is in place, it can give tough competition to Bangladeshi apparel industry, according to industry analysts.

The availability of land and skilled labour at lower cost compared to Bangladesh further points towards Myanmar grabbing a share of Bangladesh apparel export market in near future.

Speaking to fibre2fashion, Mr. Mohammad Hatem, Vice President of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said, “The withdrawal of restrictions on Myanmar by the EU would open the EU market for Myanmarese apparel export. On the other hand, there are gas and electricity problems in Bangladesh. So, unless the Government acts swiftly to set up additional infrastructure, Myanmar can be a threat for Bangladeshi apparel sector.”

Myanmar has good mineral resources and hence it does not have any gas and electricity problems. The availability of resources coupled with political reforms would lead to setting up of new industries in Myanmar.

“At this point in time, Myanmar is not ready to capture the RMG market as it lacks necessary infrastructural facilities and other establishments. But, those will be established in due course of time,” says Mr. Hatem.

“On the other hand, it is difficult to set up a new industry in Bangladesh as there is shortage of electricity and gas. Besides, the interest rates are also very high,” he adds.

He suggests, “The Government can help the RMG sector by providing special gas and electricity supply to manufacturing units and by improving infrastructure facilities.”

During July-March period of the current fiscal, Bangladesh's export earnings from woven and knit wear slowed down to 19.24 percent and 5.92 percent respectively, mainly owing to the ongoing financial crisis in its major EU and the US markets.

Fibre2fashion News Desk - India


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