Contribution of the Ready-Made Garments (RMG) Sector to the Bangladesh Economy(2)
Contribution of RMG sector in National Economy Of Bangladesh
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Transcript of Contribution of RMG sector in National Economy Of Bangladesh
Contribution of RMG sector in
National Economy Of
Bangladesh
ContentIntroductionFindings & analysis Strength, Weakness, Opportunity & Threat of Garments sector of Bangladesh
Assistance of Bangladesh Government to RMG
Women’s in Garments IndustryLimitations of Garments IndustryConclusion
Introduction
The economy of Bangladeshis largely dependent on agriculture
RMG sector has emerged as the biggest earner of foreign currency
The overall impact of the readymade garment exports is certainly one of the most significant social and economic developments in contemporary Bangladesh
Over one and a half million women workers employed in semi-skilled and skilled jobs producing clothing for exports
Bangladesh is clearly ahead from other South Asian suppliers in terms of capacity of the readymade garments industry
Findings & Analysis
The role RMG sector in Bangladesh economy is remarkable. . It’s seen that, from the last decade . RMG sector contributes to the national economy in considerable rate. About 76% of total export earnings come from RMG sector.
Figure shows the total export of RMG products in different year
Total Number of garments Factory in Bangladesh according to BGMEA
Year Number of Garments
2010-11 51502011-12 54002012-13 58762013-14 42222014-15 4296
2010-11 2011-12 2012-13 2013-14 2014-15
5150 54005876
4222 4296
Number of Garments
Number of Employees
Year
Empl
oyee
s Num
ber
Investment in RMG
Year Total Invested Amount in Million US$
2010-11 25216.34
2011-12 26032.35
2012-13 30125.56
2013-14 28563.32
2014-15 27685.28
Source: CPD (Center for Policy Dialog Bangladesh)
2010-11 2011-12 2012-13 2013-14 2014-15
25216.3426032.35
30125.5628563.33
27685.28
Investment in RMG
Series 1 Column1
Total Export versus RMG Export of Bangladesh
Year Total Export Amount
RMG Export Amount
2010-11 22924.38
17914.46
2011-12 24287.66
19089.69
2012-13 27027.36
21515.73
2013-14 30186.62
24491.85
2014-15 31198.45
25491.42
Data Source: Export Promotion Bureau Compiled by BGMEA
2010-11 2011-12 2012-13 2013-14 2014-15
22924 2428727027
30186 31198
Total Export of RMG products
Total Export
Year
Amou
nt
Total Export versus RMG Export of Bangladesh Comparison by year
Data Source: Export Promotion Bureau Compiled by BGMEA
year 2010-11 2011-12 2012-13 2013-14 2014-150
5000
10000
15000
20000
25000
30000
35000
Comparison RMG Export vs Total Export
total expo. Amount RMG Expo. Amount
Amou
nt in
US$
Strength, Weakness, Opportunity & Threat of Garments sector of Bangladesh
Strength
Considerable Qualified/keen to learn workforce available at low labor charges.
Energy at low price.Easily accessible infrastructure like sea road, railroad, river and air
communication.Accessibility of fundamental infrastructure, which is about 3 decade old,
mainly established by the Korean, Taiwanese and Hong Kong Chinese industrialists.
FDI is legally permitted.Moderately open Economy, particularly in the Export Promotion Zones.GSP under EBA (Everything but Arms) for Least Developed Country
applicable (Duty free to EU). Improved GSP advantages under Regional Cumulative.Looking forward to Duty Free Excess to US, talks are on, and appear to
be on hopeful track.
WeaknessLack of marketing tactics.Absence of easily on-hand middle management.A small number of manufacturing methods.Lack of training organizations for industrial workers, supervisors and
managers.Autocratic approach of nearly all the investors.Fewer process units for textiles and garments.Time-consuming custom clearance.Unreliable dependability regarding Delivery/QA/Product knowledge.Subject to natural calamities.
OpportunityEU is willing to establish industry in a big way as an option to china
particularly for knits, including sweaters.Bangladesh is included in the Least Developed Countries with which
US is committed to enhance export trade.Sweaters are very economical even with china and is the prospect for
Bangladesh. If skilled technicians are available to instruct, prearranged garment is
an option because labor and energy cost are inexpensive.
Threat
The exporters have to prepare themselves to harvest the advantages offered by the opportunities.
Unless new strong market is explored in home or abroad, any non-cooperation from USA & EU may jeopardize the whole Bangladesh RMG export business and consequently the textile manufacturing.
Sudden price hike of cotton and yarn in the global market may push Bangladesh to a very awkward situation to devastate the business.
The type of labor and political anarchies of the recent days if prevails in the future, Bangladesh may lose the business in the way Sri Lanka has lost.
The RMG industry is the backbone and motor of Bangladesh's
economy low labor costs have always been one of the competitive advantages
for Bangladesh garments in the global sourcing market , Bangladesh is the seventh largest RMG exporter in the world4,200 apparel factories export garments worth nearly US$ 10 billion,
contributing more than 75% to Bangladesh's total export earningsThe industry provides direct employment to over 2.3 million workers -
mainly women - and indirectly supports the livelihood of about 20 million people
, increasing production costs are putting the industry in a very precarious economic situation
pressure from buyers has been increasing, demanding from suppliers' full compliance with internationally recognized social and environmental standards
Assistance of Bangladesh Government to RMG
Women in the Garments Industry
The garment sector has provided employment opportunities to women from the rural areas that previously did not have any opportunity to be part of the formal workforce
This has given women the chance to be financially independent and have a voice in the family because now they contribute financially
Most women come from low income familiesLow wage of women workers and their compliance have
enabled the industry to compete with the world marketWomen are paid far less than men mainly due to their lack of
educationParticulars Figure
Total Worker 3.60 million
Total Women Worker 2.88 million (78%)
Political Problem : The first victim of confrontational politics is the garment sector as the exporters face challenges in production, marketing, distribution of raw materials, destruction of factories by the enraged political party supporters. The activities of the sector stop for the confrontational politics. Workers cannot move up to the factories during political chaos like shutdown and political impasses.
Land Crisis : Many local and foreign investors are not getting adequate land for establishing industries for scarcity of land even at higher prices. It will be very difficult to get a suitable industrial plot in the Dhaka, Mymensingh, Savar, Ashulia, Narayanganj and Narsingdi industrial belts for setting up new industrial units.
Marketing and Price Negotiation Limitation : Majority of the first generation garment entrepreneurs did not start their business with formal education. They started their business normally and got bigger later, although the second generation is very organized. S0 price negotiation, which is very vital for sustenance of business, remained unattended to many. The prices for per dozen garment items remained stuck at $26.50 over the last three years although the cost of production increased nearly 15 percent year-on-year. Price negotiation is still a major problem.
Limitation of Garment Industry
It’s a prime duty for us to provide a perfect working place for the readymade garments sector of Bangladesh which has given our economy a strong footing, created jobs for millions of people, especially for women, lifted them for the abyss of chronic poverty and given them a magnificent life. Now what we have needed to do is dealing with all the challenges facing our readymade garments industry, paving the way for its further development.
Conclusion
ANY QUESTION??