Present Status of Garments Industry in Bangladesh

Present Status of Garments Industry in Bangladesh (Positive Perspectives):

The contribution of readymade garment (RMG) to the national export increases with the rebound of orders from international buyers following a recovery in the global economy, according to trade data of the Export Promotion Bureau.

    The share of RMG products reached 77.17 percent in the July-November period from 77.15 percent in July-October of the current fiscal year.

    During the July-November period, the country exported woven garments worth $2.13 billion and knitwear items of $2.59 billion totaling $4.72 billion.

    The share of woven garments in the total exports of the country was 34.84 percent and that of knitwear (including sweater) was 42.34 percent, the data said. During the five-month period, the total national export was worth $6.10 billion.

    In fiscal 2008-09 the RMG contribution was 79.33 percent, while woven segment added 38.02 percent and knitwear items 41.30 percent. 

    Bangladesh exported woven garments worth $5.92 billion and knitwear worth $6.43 billion in 2008-09, registering growths of 14.54 percent and 16.48 percent respectively compared to the previous year.

Table-3: National Income Aggregates:

Items	2008-2009*	2007-2008	Changes over previous year
			absolute	Percentage
GDP at current prices (in million Taka)	6149432	5458224	691208	12.66%
GNI at current prices(in million Taka)	6832305	5942119	890186	14.98%
NNI at current prices(in million Taka)	6358229	5518610	839619	15.21%
GDP at constant prices ( base 1995-96 ), (in million Taka)	3406524	3217260	189264	5.88%
GNI at constant prices ( base 1995-96 ), (in million Taka)	3784806	3502483	282323	8.06%
Per Capita GDP at current prices,    (in Taka)	42638	38330	4308	11.24%
Per Capita GDP at constant prices (base 1995-96), (in Taka)	23620	22593	1027	4.55%
Per Capita GNI at current prices (in Taka)	47373	41728	5645	13.53%
Per Capita GNI at constant prices (base 1995-96), (in Taka)	26242	24596	1646	6.69%

 Source: BBS (Bangladesh Bureau of Statistics) *:= Provisional, R: =Repeated.  

    Most Asian LICs are expected to record positive growth in 2009 and should see a further strengthening of activity in 2010 as global conditions continue to improve.                                                                                                                                                       IMF forecasts suggest Asia will grow by 5.75 per cent in 2010–far higher than the 1.25 per cent predicted for the G-7 economies but well short of the 6.67 per cent average recorded for the region over the past decade.                                                                        “A strong rebound in exports is unlikely, given that some of the Asian LICs’ export products including agricultural goods and garments have low responsiveness to global demand changes.”
    At present there are about 3500 garment industries in the country and 75 percent of them are in Dhaka. The rest are in Chittagong and Khulna. These Industries have employed fifty lacks of people and 85 percent of them are illiterate rural women. About 76 percent of our export earning comes from this sector.                                                                    The prime reason why garment industries have come out to be the champion in the field of export is obviously the cheap labor. Labor is not as cheap anywhere in the world as it is in Bangladesh.

    Bangladesh exports its RMG products mainly to the United States of America and the European Union. These two destinations account for more than a 90 percent share of the country’s total earnings from garment exports. The country has achieved some product diversification in both the United States and the European Union.

    Recently, the country has achieved some level of product upgrading in the European Union, but not to a significant extent in the United States. Bangladesh is less competitive compared with China or India in the United States and it is somewhat competitive in the European Union.

Table-4: Category-wise exports of different products in 2008 & 2009:

Present Status of Garments Industry in Bangladesh (Negative Perspectives):

                  
    In a recent survey, it is realized that a large portion of population are working in the RMG sector. A worker (male or female) earns at best (1000-1600) taka per month as basic. But it is a matter of close observation that a significant percentage of workers are marrying within RMG. So, both husband and wife are working in garments and earning at best 3500 taka as basic.
    Now the question, is 3500 taka enough to lead life in a costly city like Dhaka? The answer is no. Then what is happening around us. Can you even imagine? Since freedom is the birth right of a man, mother’s milk, fathers affection and love are the birth right of a child. Mother and father are working in garments all the day round and earn money not enough to live together. So, they are bound keep their child in the village with their mother, mother in law or sister in law. The child must not be growing like any other child who lives with their father and mother. As a result, this child is becoming irrigative. Its mental growth is downward. He or she is not getting a good environment of education. He is always dejected. The child is growing up in an unwelcome world. In the long run, this child will not honor the parents since relationship is not as such. What will happen after 50 years if the children are not grown properly?
     From the law of business, we have seen that if the owner is unable to provide good working environment for the worker, it is the violation of law. Side by side the workers must get a good compensation package from the owner. This compensation package must include salary, medical service, home allowances, transportation, trainings and education

     => On the other side, UD consumption improved in January 2010 by 4.0-5.0 percent compared to the same month last year, according to Bangladesh Garment Manufacturers and Exporters Association (BGMEA) data.                                                                                                 “But the concerns for Bangladesh are the sudden price hike of cotton by 25 percent on international market and yarn price rise on the local market by 30 percent as the Free on Board (FoB) value remained static,” said BGMEA President Abdus Salam Murshedy. If a commodity is quoted on a FoB basis it means the cost of the goods and their loading on to a ship are included but not the insurance or freight charges. He said the exporters’ cost increased as they have to send the goods by air to maintain the lead-time. Recently the exporters are continuously failing to maintain the lead-time due to failure in on-time production caused by low gas pressure in the plants, he said in an interview recently.