Contribution-of-the-Ready-Made-Garments-RMG-Sector-to-the-Bangladesh-Economy

ABSTRACT
The ready-made garment (RMG) industry of Bangladesh started in the late1970s and became a prominent player in
the economy within a short periodof time. The industry has contributed to export earnings, foreign
exchangeearnings, employment creation, poverty alleviation and the empowermentof women. The export-quota
system and the availability of cheap labourare the two main reasons behind the success of the industry. In the
1980s,the RMG industry of Bangladesh was concentrated mainly inmanufacturing and exporting woven products.
Since the early 1990s, theknit section of the industry has started to expand. Shirts, T-shirts, trousers,sweaters and
jackets are the main products manufactured and exported bythe industry. Bangladesh exports its RMG products
mainly to the UnitedStates of America and the European Union. These two destinations accountfor more than a 90%
share of the countrys total earnings from garmentexports. The country has achieved some product diversification in
both theUnited States and the European Union. Recently, the country has achievedsome level of product upgrading
in the European Union, but not to asignificant extent in the United States. Bangladesh is less competitivecompared
with China or India in the United States and it is somewhatcompetitive in the European Union.The phase-out of the
export-quota system from the beginning of 2005 hasraised the competitiveness issue of the Bangladesh RMG
industry as a toppriority topic. The most important task for the industry is to reduce the leadtime of garment
manufacturing. The improvement of deep-levelcompetitiveness through a reduction in total production and
distributiontime will improve surface-level competitiveness by reducing lead time.Such a strategy is important for
long-term stable development of theindustry, but its implementation will take time. In contrast, theestablishment of a
central or common bonded warehouse will improvesurface-level competitiveness by reducing lead time, but deeplevelcompetitiveness will not be improved and long-term industry developmentwill be delayed. Therefore, granting
permission to establish in the privatesector such warehouses with special incentives, such as the duty-freeimport of
raw materials usable in the export-oriented garment industry forreducing the lead time in garment manufacturing is a
critical issue forBangladesh.Second, Bangladesh needs to improve the factory working environmentand various
social issues related to the RMG industry. International buyersare very particular about compliance with codes of
conduct. Third, issuesrelated to product and market diversification as well as upgrading productsneeds to be
addressed with special care. Moreover, the Government of Bangladesh needs to strengthen its support. The
development of the portand other physical infrastructure, the smooth supply of utilities, acorruption-free business
environment and political stability are somepriority concerns for the Government to consider in its efforts to
attractinternational buyers and investors.
INTRODUCTION
The RMG industry of Bangladesh has expanded dramatically over the lastthree decades. Traditionally, the jute
industry dominated the industrialsector of the country until the 1970s. Since the early 1980s, the RMGindustry has
emerged as an important player in the economy of the countryand has gradually replaced the jute industry. The
export-quota system intrading garment products played a significant role in the success of theindustry. However,
that quota system came to an end in 2004. Therefore,the competitiveness issue needs to be addressed, with special
attentiongiven to the long-term sustainability of the industry.The term competitiveness itself is a broad concept. Its
meaning,implications, adaptation and achievement vary from firm to firm, industryto industry, or country to country.
Michael E. Porter is a pioneer of thecompetitiveness theory (Porter, 1990) at the national or macro level (Choand
Moon, 2000). Firm/industry-level (micro level) competitivenessdepends on various parameters. However, the
literature provides nouniversal agreement on the definition of competitiveness. For example,some researchers
consider the labour cost, unit cost, exchange rate, interestrate, prices of material inputs and other price- or costrelated quantitativefactors for measuring the competitiveness of a manufacturing firm/industry(Edwards and Golub,
2004; Fukunishi, 2004; Cockburn and others, 1998;and Edwards and Schoer, 2002). Some other researchers
consider productquality, innovativeness, design, distribution networks, after-sales service,transaction costs,
institutional factors relating to the bureaucracy of exportprocedures and other non-price factors for measuring the
competitivenessof a manufacturing firm/industry (Abdel-Latif, 1993; Chen and others,1999; and Sachwald, 1994).

The influences of both price and non-pricefactors on the competitiveness of a firm/industry are reflected by
marketshare and profit (Toming, 2006). This study attempts to incorporate price,non-price and result (for example,
market share) factors in order to addressthe international competitiveness of the Bangladesh RMG industry.The
majority of the competitiveness-related research studies focus on thecompetitive performance or on the factors
influencing competitiveperformance. The studies consider product price, market share and otherindicators to
measure competitive performance, while considering wages costs, productivity and other issues as factors
influencing competitiveperformance. However, Fujimoto (2001) puts special emphasis on thecapability factor that
influences the competitive performance of a firm.According to him, improvement in the capability of a firm
enhances itscompetitive performance. This improvement takes time, but it ensuresthe long-term sustainability of a
firm. In contrast, improving onlycompetitive performance and not capability may not be sufficient toensure the
long-term development of the firm.This study addresses the competitiveness issue from two broaderdimensions:
surface-level and deep-level competitiveness. Surface-levelcompetitiveness reflects the competitive performance
of a firm orindustry that is directly observable to consumers.Deep-level competitiveness reflects the capability of
a firm or industrythat is not directly observable to consumers. An improvement in the deep-level performance
enhances the performance at the surface level. Thesevere competition under the quota-free trading environment
pressures theRMG industry of Bangladesh to enhance its surface-level competitivenessat the earliest convenient
time. However, the long-term sustainability of theindustry demands enhancement of deep-level competitiveness.
Therefore,the future development of the industry will depend on how muchimportance will be given to which
factors/dimensions, and how theindividual firms will respond and how government policies will influencethe
industry. Hence, the discussion of the competitiveness of theBangladesh RMG industry requires simultaneous
consideration of both thesurface and deep dimensions. In particular, this study uses (a) export value,product price,
market share and lead time as surface-level indicators, and(b) linkage expansion, factory environment,
product/market composition,and production and distribution time as deep-level indicators formeasuring the
international competitiveness of the Bangladesh RMGindustry.The paper is structured as follows. Section 1 sets the
research agenda.Section 2 provides an overview of the Bangladesh RMG industry. Section3 discusses the surface
level competitiveness of the Bangladesh RMGindustry. Section 4 focuses on the deep-level competitiveness of
theindustry. Section 5 deals with the indirect influences of governmentalpolicies on the competitiveness of the
Bangladesh RMG industry. Finally,section 6 concludes the study.
AN OVERVIEW OF THE BANGLADESH READY-MADEGARMENT INDUSTRY
The RMG industry is the only multi-billion-dollar manufacturing andexport industry in Bangladesh. Whereas the
industry contributed only0.001 per cent to the countrys total export earnings in 1976, its shareincreased to about 75
per cent of those earnings in 2005. Bangladeshexported garments worth the equivalent of $6.9 billion in 2005, which
wasabout 2.5 per cent of the global total value ($276 billion) of garmentexports. The countrys RMG industry grew
by more than 15 per cent perannum on average during the last 15 years. The foreign exchange earningsand
employment generation of the RMG sector have been increasing atdouble-digit rates from year to year. Some
important issues related to theRMG industry of Bangladesh are noted in table 1.
Table 1. Important issues related to the Bangladesh ready-madegarments industry

Currently, there are more than 4,000 RMG firms in Bangladesh. More than95 percent of those firms are locally
owned with the exception of a fewforeign firms located in export processing zones (Gonzales, 2002). TheRMG
firms are located mainly in three main cities: the capital city Dhaka,the port city Chittagong and the industrial city
Narayangonj. BangladeshRMG firms vary in size. Based on Bangladesh Garment Manufacturers andExporters
Association (BGMEA) data, Mainuddin (2000) found that in1997 more than 75 per cent of the firms employed a
maximum of 400employees each. Garment companies in Bangladesh form formal orinformal groups. The grouping
helps to share manufacturing activities, todiversify risks; horizontal as well as vertical coordination can be
easilyfound in such group activities.
Ready-made garments manufactured in Bangladesh are divided mainly intotwo broad categories: woven and knit
products. Shirts, T-shirts and trousersare the main woven products and undergarments, socks, stockings, Tshirts,sweaters and other casual and soft garments are the main knit products.Woven garment products still dominate
the garment export earnings of thecountry. The share of knit garment products has been increasing since theearly
1990s; such products currently account for more than 40 per cent of the countrys total RMG export earnings
(BGMEA website). Although various types of garments are manufactured in the country, only a fewcategories, such
as shirts, T-shirts, trousers, jackets and sweaters, constitute the major production-share (BGMEA website; and Nath,
2001). Economiesof scale for large-scale production and export-quota holdings in
thecorresponding categories are the principal reasons for such a narrow product concentration.
COMPETITIVENESS OF THE BANGLADESH READY-MADEGARMENT INDUSTRY: SURFACE
LEVEL
The United States was the main export destination for Bangladeshi RMG products in the early 1990s followed by
the European Union, but theEuropean Union has surpassed
the United States over time. These two destinations generate more than 90 per cent of the total RMG exportearnings
of Bangladesh (BGMEA and the Export Promotion Bureauwebsites; and Quddus and Rashid, 2000). The shares of
other importers,such as Australia, Canada, China, Japan and the Russian Federation as wellas countries in the
Middle East, in the total RMG export earnings of Bangladesh are minimal. This section of the paper focuses on
surface-levelcompetitive performance of the Bangladesh RMG industry in the UnitedStates and the European Union
markets only. In addition, the performanceof China and India along with Bangladesh as RMG suppliers
tointernational markets is also considered for comparative analysis.
(a)
Export competitiveness in the United States market
Bangladesh has experienced some product diversification in its export of garments to the United States market in
recent years compared with theearly 1990s. However, the countrys performance in upgrading its productsis not
significant with regard to the United States market (Haider, 2006).The country experienced a sharp increase in the
export of garment productsto the United States market in the 1990s, but faced declines in exportearnings from that
country in 2002 and 2003, followed by slow increasessince 2004. The exports of India also increased rapidly in the
1990s,although that country experienced comparatively slow progress in the lastfew years. However, the RMG
exports of China to the United States haveincreased at a startling rate over the years. For example, the textile and
garment export earnings of China, India and Bangladesh from the UnitedStates were $3.6 billion, $0.8 billion and
$0.4 billion respectively in 1990,and increased to $22.4 billion, $4.6 billion and $2.5 billion respectively in2005.
Such rapid expansion in the exports of China represents a majorchallenge to other exporters.Bangladesh exported a
total of 99 types of products in the textile andgarment category to the United States in 2005, but most of the
categoryscontribution was minimal. For India and China, the number of textile andgarment product categories
exported in the same year to the United Stateswas 161 and 167 respectively. The product diversification trend of
thethree countries is illustrated in figures 1 to 3.Category 340 (cotton non-knit shirts, man and boy) was the
highestcontributor to the export earnings of Bangladesh from the United States,amounting to $332 million in 2005.
The export earnings of only eightcategories8 crossed the $100 million export benchmark in the same yearfor the
country. A total of 16 categories of exports crossed the $50 millionbenchmark and 31 categories crossed the $10
million export benchmark (see figure 1).
Figure 1. Textile and garment exports to the United States from Bangladesh (United States dollars)

For India, the highest contributor was category 369 (miscellaneous cottonmanufactures), accounting for $439
million in export earnings from theUnited States in 2005. Also in the same year, a total of 12, 20 and 56categories
crossed the $100 million, $50 million and $10 million exportbenchmarks respectively (see figure 2).
Figure 2. Textile and garment exports to the United States from India
(United States dollars)

However, the scenario differed significantly for China. The highestcontributor for China in the United States market
was category 670 (man-made fibre flat goods/handbags/luggage), which amounted to $2,066million in 2005. In the
same year, 9, 62, 78 and 124 categories crossed the$500 million, $100 million, $50 million and $10 million
exportbenchmarks respectively (see figure 3).
Figure 3. Textile and garment exports to the United States from China
(United States dollars)

The market of India seems to be more diversified compared with that of Bangladesh, and the market of China is
significantly more diversifiedcompared with that of Bangladesh or India. Figures 1 to 3 also indicate thatthe exports
of Bangladesh are concentrated mainly in cotton or man-made fibre-related products. In contrast, the trade of China
and India isdiversified in all the fibre groups.
(b) Export competitiveness in the European Union market
Bangladesh has experienced both quantitative and qualitative changes inexporting garment products to the European
Union market during theperiod 1996-2005. The textile and garment export earnings of Bangladeshfrom the
European Union increased from 1.2 billion euro in 1996 to 3.7billion euro in 2005. For India and China, the
corresponding earningsincreased from 3 billion and 5.3 billion euro in 1996 to 5.3 billion and 21.1billion euro in
2005 respectively. Garment products generate the majorshare of Bangladeshs export earnings from the European
Union. However,both textile and garment products in China and India contribute to theexport earnings from the
European Union
.
For example, garment productson average generated more than a 95 per cent share of the total textile andgarment
exports to the European Union from Bangladesh during the period1996-2005. The corresponding shares for India
and China stand at below75 per cent and 80-90 per cent respectively.The top five product groups contributed 76 per
cent of the total garmentexport earnings of Bangladesh from the European Union in 1996, and thatshare increased to
82 per cent in 2005. The corresponding changes forIndia and China were from shares of 62 per cent and 34 per cent
in 1996 to54 per cent and 45 per cent in 2005 respectively. This trend demonstratesthat product diversification in
Bangladesh is lower than that of India andChina in exporting garments products to the European Union market.Knit
garments from Bangladesh have gained remarkable access to theEuropean Union market during the period 19962005 (see table 2).Duty- and quota-free access of garment products manufactured under two-stage local
transformation (yarn to fabrics and fabrics to garment) haveaccelerated the exports of knit garment products from
Bangladesh to theEuropean Union. As the knit textile subsector is relatively less capitalintensive and requires
relatively simple technologies, it managed toundergo rapid expansion, benefiting from the European Union
GeneralizedSystem of Preferences. The woven part of the category has failed to utilizethat facility owing to a lack of
sufficient backward linkages. In contrast tothe European Union, both knit and non-knit products have entered
theUnited States market simultaneously, as no special tariff or tax reductionincentive was available there for the
import of garment products from Bangaldesh.
Table 2. Exports of knit, non-knit and made-up products to theEuropean Union
(Millions of euro and percentage)

The product-mix of garment products exported from Bangladesh to theEuropean Union has changed significantly
during the period 1996-2005.The share of shirts in total garment exports from Bangladesh to theEuropean Union has
decreased, whereas the shares for overcoats, jackets,sweaters, suits and some other garment products have increased
in recentyears. These changes demonstrate that Bangladesh is achieving some levelof product diversification in
exporting garment products to the EuropeanUnion. In addition, a gender analysis indicates that Bangladesh
hasachieved some upgrading of its products recently in terms of exportinggarment products to the European Union.
Garments for females are treatedas upgraded products compared with garments for males, since they addmore value
on average. The earnings of Bangladesh from the export of garments for females to the European Union have
increased during theperiod 1996-2005 (Haider, 2006).
(c)
Price competitiveness
China and some other competitors of Bangladesh have implemented sharpPrice-cutting policies in exporting
garment products over the last fewyears, but Bangladesh has failed to respond effectively to such policies.China was
able to drop the export price of 29 garment categories by 46 percent on average in the United States within a year,
from $6.23 per sq meterin December 2001 to $3.37 per sq meter in December 2002. However, allother suppliers
were able to drop the price by only 2 per cent, from $3.50per sq meter to $3.41 per sq meter during the same period.
By the end of 2002, China had underpriced all other exporters to the United States in 22out of 29 garment categories
and it had underpriced others in 26 out of 29categories by March 2003 (American Textile Manufacturers
Institute,2003). Moreover, China rapidly managed to be price competitive in theEuropean Union and other major
international markets. For example, the

average unit export price of garment products integrated in the third stageof the Multifibre Arrangement
phase-out decreased from 11,600 euro perton in 2001 to 9,500 euro per ton in 2002 for Bangladesh in the
EuropeanUnion, whereas the corresponding decrease for China in that market wasfrom 13,500 euro to
8,800 euro per ton (European Commission, 2003).Bangladesh needs to respond to such price-cutting
policies of its rivals inorder to remain competitive in the quota-free global market.
(d) Lead time
Lead time refers to the time required for supplying the ordered garmentproducts after the export order has
been received. In the 1980s, the usuallead time in the garment industry was 120-150 days for the main
garmentsupplier countries of the world; it has been reduced to 30-40 days in thecurrent decade. However,
in this regard the Bangladesh RMG industry hasimproved little; for example, the average lead time is 90120 days forwoven garment firms and 60-80 days for knit garment firms. In China, theaverage lead time
is 40-60 days and 50-60 days for woven and knitproducts respectively; in India, it is 50-70 days and 6070 days for thesame products respectively.Shortening the lead time is the most urgent priority task for
Bangladesh.The best way is to develop domestic backward linkages with the aim of reducing production
and distribution time. Such a strategy wouldcontribute to enhancing the deep-level performance of the
industry andwould have a positive impact on surface-level performance. An alternativesolution would be
to establish a central or common bonded warehouse inthe private sector for storing raw materials usable
in the export-orientedgarment industry, with special incentives such as duty-free import. Whilesuch a

solution is the fastest way to improve surface-level competitivenessby reducing lead time, it carries the
risk of delaying deep-level competitiveperformance-enhancing initiatives and the long-term development
of theindustry.
PRESENT PROSPECT OF EXPORT PERFORMANCE BETWEENBANGLADESH & OTHER
COMPETITIVE COUNTRIES
Bangladeshs share in the US apparel market is getting larger as cheapclothing (basic garment items) sales
in that market are increasing in globalrecession, market operators said.Recession-hit retailers in the US
and Europe are purchasing garments fromBangladesh in enhanced volume as the cost of the item is less
here becauseof cheap labour and the better state of economy, reported some Indiandailies recently.
The strong presence of locally made garment items in US market, thelargest importer, has surpassed even India, a
stronger competitor, for thefirst time. Bangladesh has now taken the fifth position, which waspreviously occupied by
India, on the list of largest garment-exportingcountries to the US.While Bangladeshs share increased by 10 percent,
Indias share wentdown by 3 percent in the US market in August 2008, some newspapers inIndia report. The US
imports of knitwear and woven garment fromBangladesh during July-December 2008 were more than $558 million
and$1.21 billion respectively, according to the Export Promotion Bureau(EPB) data. USITC (United States
International Trade Commission) saysthe total import of knitwear from the world in the US was 1.56 percentdown
during June-December in 2008, whereas knitwear imports fromBangladesh marked a 24.87 rise in the same period.
When global wovenimports in the US for this period were 3.72 percent down, the items importfrom Bangladesh
increased by 12.02 percent.The 5.1 percent rise in February 2009 retail sales of Wal-Mart, globallyknown for cheap
clothing, reflects a strong presence of Bangladesh RMGproducts in the US. However, the entire US retail sales of
clothing markeda 2 percent drop during July-November in 2008, compared to the sameperiod a year earlier. The
USITC data show a 5.60 percent decline in theUS imports of knitwear from Cambodia in the July-December period,
4.60percent increase from China, 0.13 percent decline from India, 12.56percent increase from Indonesia, 2.38
percent decline from Pakistan, 0.06percent increase from Sri Lanka, 10.93 percent decline from Thailand and23.56
percent increase from Vietnam. During the same period, the importof woven items by US from Cambodia declined
by 6.30 percent, 5.13percent increased from China, 9.51 percent declined from India, 8.25percent declined from
Indonesia, 4.33 percent increased from Pakistan,3.85 percent declined from Sri Lanka, 6.57 percent declined from
Thailandand 7.79 percent increased from Vietnam. US imports more than US$70billion garment items annually
from all over the world. The worlds exportmarket of readymade garment (RMG) items is $410billion
whereBangladeshs market share is only 2.0 percent. Meanwhile, EPB data showthat Bangladeshs RMG exports
reached US$6.05 billion during the firsthalf of the current fiscal year 2008-09, registering a 24.18 percent growth.Of
the total export target, $12.267 billion has been fixed for the two mainsub-sectors of RMG. Of this amount,
US$6.583 billion is for knitwear, 19percent up from its last years export performance, and $5.684 billion forwoven,
10 percent up from the last years figure. Bangladesh fetched $10.7billion from RMG exports in the same period of
2007-08. BKMEAPresident Fazlul Hoque said, Bangladesh has large factories than manyother countries and they
are more productive and have low labour cost, which is helping them in attracting buyers from the US and
Europe.Bangladesh is the only country that can produce textile items at least 20-30percent cheaper than China,
Hoque said.We are more competitive than others, as we have cheap labour, lessproduction costs and we could
establish strong capacity base of textile andclothing items, said the chief of the Bangladesh Knitwear
Manufacturersand Exporters Association.

Competitiveness through Productivity

Higher productivity brings down the manufacturing cost thus improves costcompetitiveness in the price sensitive
market. Higher productivity alsohelps the factories bring down the need for excessive overtime. This is amajor issue
that international buyers are trying to address worldwide. Infact many leading international apparel retailers/
sourcing companies areactively promoting productivity and quality improvement programs in theirsupplier factories
for above reasons.Bangladesh is a country of relatively low labor cost. The industry did notgrow in a structured way
and still lacks sufficient institutional trainingfacility to create skilled manpower both for the factory floor and
factorymanagement. In a number of factories conventional manufacturing systemis still in practice and the factory
management lacks scientific productionmanagement knowledge and skill compared to our competing
countries.Productivity levels generally achieved in Asian apparel industry andespecially in the Bangladesh apparel
industry have been very lowcompared to the global benchmark performance. This does not mean thatthere aren't

success stories of factories that have substantially higherproductivity performance, but such factories are a small
minority.Therefore, the basic idea of productivity enhancement is to ensure fullutilization of resources to produce
maximum output.

Scope of Productivity and Quality:

Garment manufacturers are now working in an open market scenario. Andthe customer/ market sets product price
reverse to monopoly or closedmarket.Profit = Sales Price - Manufacturing CostAs investor will not prefer to reduce
profit margin, the only factor that canensure business continuation is optimize manufacturing cost. Being one of the
lowest productive countries, Bangladesh has the biggest opportunity toimprove competitiveness through
productivity enhancement and evencontrol the market.Proper motivation and awareness campaign needs to be raised
for thefactory management to realize the benefits of optimum productivity. At thesame time modern technology and
scientific tools must be acquired andpracticed to improve and maintain higher productivity level. Work study/
industrial engineering department can help monitor and improveproductivity related issue.Quality has an important
role to play in the competitiveness of the apparelexporting industry. As per a study by the US Importers of Textile
andApparel (US ITA), Consistent Quality was the top most criterion used todecide where to place import orders.
This was followed by Speed tomarket, low cost, product development capabilities and social compliance.As far as
quality is concerned, our industry is proudly in a satisfactoryposition. However, there is a tremendous scope of
improvement in the areaof Quality in the manufacturing units here as a good percentage of rework takes place to
maintain the high quality which incurs financial loss.Factories sometimes need to consider price discount and
shipmentcancelation. The value of such penalties is very high and that is where theissue of proper quality
management system comes in.Productivity and quality improvement brings better financial results for
theorganizations, which in turn can be shared within the stakeholder. Theworkers can earn higher wages and help
improve the standard of living.The satisfied worker can contribute at a higher level in productivitythrough high
morale, less absenteeism, less turn over and concentratedwork effort. At the same time buyers can have more value
of their moneythrough better quality and lead time.
CONCLUTION
Bangladesh, traditionally known for jute & tea exports, has recentlyattracted attention for readymade garments &
leather exports.Bangladesh is the best placed in the region for textile & garments industrydue to cheap labour &
favorable trade status with the EU.Bangladesh has earned nearly $8 billion by exporting garment products,mainly to
Europe and the United States. This is about 75 percent of totalexport earnings of the country. The RMG industry has
around 4,250 unitsacross the country. It employs more than 2 million workers, most of whomare poor women.
Whenever the country is criticized for its high level of corruption and confrontational politics, its garment industry is
held up as asuccess story. After the end of the Multi-Fiber Agreement at the beginningof 2005 and the changeover to
the new World Trade Organization regime,it was feared that the Bangladeshs booming textile industry would
sufferas it would loose business to countries like China and India. But fortunatelyfor Bangladesh, so far this
prediction has been proved wrong. In fact, theindustry has continued to grow at a healthy rate of 20 percent.
However,this does not indicate that the Bangladesh garment industry has become more competitive. The reality is
that this increase has been largely due torestrictions imposed on China by the Western nations. As the quotas
underMFA had led to an artificial trade structure, the international RMG marketfaces a restructuring process.
Bangladeshs exports are heavilyconcentrated in the RMG sector, which has been a main driver of growthand
poverty reduction. With more than three-quarters of exports RMGrelated, the country is vulnerable to the MFA
shock, in particular since it isconfronted with other problems that affect its competitiveness. Theseproblems are not
limited to the RMG sector, but will be exposed more fullythere in the post-MFA world. The challenge is therefore to
improvecompetitiveness, both in the RMG sector and economy wide, and diversifyexports. Garment industry in
Bangladesh has been facing multidimensionalproblems since its establishment. Acute power crisis followed by non
tariff restriction, chronic labor unrest, lack of infrastructural facilities, inadequatesupply of material and accessories,
inability or lack of efforts to diversifythe products and markets, irregularities relating to customs, bond, andshipping,
financing and the like are the major problems hampering theproduction and increasing the cost of production

significantly. Due topower shortage shipments are sent through air, thereby increasing its cost.Unfortunately the
government has not taken any step to improve thesituation. On the other hand, people have been shot dead for
demandingregular supply of electricity. In this context, it is still right time to devoteall out efforts by the relevant
agencies and authority as to expansion andsolutions of numerous problems that it faces now. In fact a well
designedplan with diversified product manufacture still provides opportunities touse this sector for socio economic
development of Bangladesh. In such acontext, it is suggested that appropriate and relevant government
andnongovernmental authorities/agencies can take some strategic and effectivemeasures which includes liberal bank
loan facilities for reviving sick garment units and BMRE; development of primary textile subsectors forfulfilling the
raw materials needs; arrangement for captive power supplyfor utilization of production and its continuation;
adequate fiscal incentivefor growing the sector; strategic arrangement or mechanism for quick resolution of labor
dispute; creation of separate ministry for garmentindustry, establishment of cost reduction strategy and labor
productivitycell to conduct various study in this field and other supportive policiesrelevant for the growth,
development and survival of garment industry inBangladesh. These may be helpful to overcome the problems and
thecontribution of garment industry towards socio economic development of Bangladesh will be improved and
sustained through value addition.

References
Mohammed Ziaul Haider,
Asia-Pacific Trade and InvestmentReview-2007
Bangladesh Textile today, (Magazine)
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