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The Garment Industry Of Bangladesh

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THE GARMENT INDUSTRY OF BANGLADESH

Introduction:

The garment industry has played a pioneering role in the development of industrial sector of Bangladesh. Though it took a rather late start i.e., in 1976 but it soon established its reputation in the world market within a short span of time. Resultantly garment is now one of the main export items of the country. Besides, enriching the country's economy it has played a very important role in alleviating unemployment. At present there are more than two thousand one hundred garment factories in the country employing more than 12 lack labors. 85 percent of the labor force is women.

Once Sri-Lanka was leader in this field in South Asia and India was its competitor. After a bloody civil war resulting in the quick demise of the garments industry of Sri-Lanka and India, the international buyers and investors diverted their attention towards Bangladesh. As a result the garments industry of Bangladesh expanded with unprecedented success. During the financial year 1993-94 Bangladesh earned 6199.8 cores Taka.

Contribution in the national economy

The role of the RMG sector in our national economy can hardly be over-emphasized. There has been a steady development in our RMG export field during at least the last decade and a half but in the last few years it has been unique. The export of RMG recorded an average growth of 21.53% since 1994-95, which grew to 76.05% by the year 1999.The table, is given bellow elaborates the growth.

Development of the Export of RMG Sector

YEAR Export of RMG (in Mln. US$) Total Export (in Mln. US$) Share of RMG's to Total Export

1993-94 1555.79 2533.90 61.40

1994-95 2228.35 3472.56 64.17

1995-96 2547.13 3882.42 65.61

1996-97 3001.25 4418.28 67.93

1997-98 3781.94 5161.20 73.28

1998-99 4019.98 5312.86 75.67

1999 2810.38 3695.46 76.05

Source: Bangladesh Export Statistics, Export Promotion Bureau (EPB) (Compiled).

The table below helps to understand the situation more clearly.

Development of the Export (in Million Taka) of different Sectors from 1993 to 1999

Commodities 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99

Amount % Amount % Amount % Amount % Amount % Amount %

Woven 51 47.21 50.97 7360.53 52.85 7970.65 50.20 9529.18 50.65 12900.18 55.09 14320.80 56.18

Knit 1052.58 10.42 1577.37 11.32 2447.12 15.41 3250.11 17.28 4266.17 18.22 4967.67 19.49

Total RMG 6199.79 61.40 8937.9 64.17 10417.77 65.61 12779.29 67.93 17166.35 73.31 19288.47 75.67

Frozen Food 638.91 8.31 1225.93 8.80 1283.01 8.08 365.65 7.26 1333.13 5.69 1316.17 5.16

Tea 152.14 1.51 131.54 0.94 135.51 0.85 162.39 0.86 21 5.36 0.92 184.99 0.73

Raw Jute 227.23 2.25 318.74 2.29 371.12 2.34 495.29 2.63 488.94 2.09 344.14 1.35

Chemical Product 21 6.73 2.15 431.65 3.10 402.68 2.54 461.89 2.46 363.21 1.44 380.19 1.49

Leather 670.16 6.64 810.52 5.82 865.86 5.45 832.35 4.42 863.21 3.69 807.20 3.17

Jute 1130.89 11.20 1278.62 9.18 1345.29 8.47 1353.45 7.19 1276.82 5.45 1457.78 5.72

Grand Total 10097.59 100.00 13928.46 100.00 15879.09 100.00 18813.04 100.00 23416.37 100.00 25491.10 100.00

Source: Bangladesh Export Statistics, Export Promotion Bureau (EPB) (Compiled).

Back in the 80s, a large number of private sector initiatives were taken in manufacturing sectors like the RMG industry. The RMG industry has enjoyed a meteoric rise from less than 50 factories in 1983 to over 3000 in 1999. In between this period, the level of employment has increased from some 10,000 to approximately 1.5 million today (see Table: 3); with its share of employment in the manufacturing industry increasing from a mere 2% to over 15%.A table is given bellow,

The number of the factories

Year 1983 1987 1991 1995 1999

No. of Factories 50 629 934 2268 3000

Source: Bangladesh Statistics, EPB

The reasons behind the huge success

The success story of the Readymade Garments sector of Bangladesh is based on employment generation and increasingly high value addition, thus smoothening the path for growth and development of the country. The apparel and garment industry propels sectors such as banking, finance and insurance, cargo, shipping and transport, entertainment and hospitality, research and education and a lot more. The mentioned performance of the industry has been possible due to:

* The Government of Bangladesh has always been concerned about the sector's growth and has played an active role as a catalyst to solve various complexities, whenever intervention was necessary.

* The cheap but disciplined and regimented workforce has been key for the success of this industry.

* The entrepreneur class has been dedicated and motivated to the country's economic prosperity.

* The quality of the manufactured apparel, which has been increasingly recognized by our international buyers and end users all over the world.

* Buyers' response has been encouraging through repeat orders. The industry has been producing all sort of apparels for all seasons and has managed to get repeat orders for every season.

* The import policy of Bangladesh has been flexible and friendly for import of accessories.

* Although there are accountable anomalies, the financial institutions, both nationalized and private, have been serving to assist this sector.

* Readymade garment industries have managed to maintain the confidence of the buying class and others in the business.

* Although the backward linkage textile industry is not adequate for the needs of the RMG industry,

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