Industrialization of the Ready-Made Garment in Bangladesh

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Context:
The readymade garments (RMG) industry of Bangladesh has been growing constantly from 1990s. The country is prominent in exporting high quality apparels at low cost. As a result the foreign exchange earnings, industrialization, GDP improved within a short span of time. The contribution of RMG in the GDP is almost 15%. In 2012-13, almost 80% of the total exports of that year came from exporting apparels of approximately $21515.73 billion. Inspite of the postponement of the MultiFibre Agreement (MFA) quota system in the United States from 2004, the RMG exports of Bangladesh has experienced a high-rise since then. Both small and large firms are expanding their export network and improving production capacities and export apparels to the famous international brands like H&M, Li & Fung, Tom Tailor, Levis, Gap, Texco, OBS, Pierre Cardin, Neck & Neck etc.

However, the garments industry is feared to become infirm because of recent unfortunate events like the factory of ‘Rana Plaza’ collapse on April 24, 2013 and fire in the ‘Tajrin garments’ in late 2012 killed almost 1300 workers in total. These incidents made the importers and the foreign investors rethink the future of their operation at the same time raised the issue of workplace safety and proper remuneration of the garments labors.

Operating Model of RMG Industry:

USA, UK, Germany, France, Spain, Turkey, Japan, Australia etc. Importers
Readymade garments, mainly of two types: Knit products (Sweaters, socks, stockings, undergarments etc.) and Woven products (shirts, T-shirts, trousers) Products
Competitive Pricing Pricing
Cheaper human capital, cheaper cost of energy consumed in Export Processing Zone (EPZ), government incentives regarding tax and loan. Competitive advanta...

... middle of paper ...

...e clothes can replace garments even though their demand is very low compared to others.
Hence overall the readymade garments industry of Bangladesh has great opportunity to boost up due to its favorable government and labor supply, whereas it has been under immense pressure from the international arena regarding workplace safety and lower wage of labor. So the country should emphasize on domestic production of raw materials so that internal raising wage and spending for workplace safety would not harm the competitive advantage of exporting low cost high quality garments. Moreover the sector needs a transformation to improve its productivity as well as to safeguard the employers’ rights and benefits. The government needs to develop infrastructures like electricity, gas, roads connectivity in order to promote the country’s largest foreign currency earning sector.

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