Problems and Prospects of Readymade Garments Export

in Bangladesh
Organization Overview
ALA !"#$ A%&#O" L$'(( is a prominent developing knit garments company in
Bangladesh. It started its journey from 2007 to complete knit garments industry with knit
sewing machines, knit circular machines & 2 nos. of computeried em!roidery machine at
"hafipur, #aipur, Bangladesh with 2$000 sft. %loor area. Its management is a strong and
highly &ualified 'ersonnel. (he target of the company is to develop as a most prestigious
garments company in Bangladesh. It is trying to carry on all or any of the )*port of
manufacturing any fa!rics readymade garments of all sies, grades, kinds and descriptions for
the !uyers a!road and inland.
(o !uy, sell, import, e*port, prepare and deal in merchandise, commodities and articles of all
kinds and generally to carry on )*port as merchants, importers and e*porters of all goods
including te*tiles, garments and allied materials of all sorts. (o carry on )*port of all sorts of
garments and te*tile and sell locally and e*port to foreign countries and create local as well
as foreign markets and appoint agents, commission agents and esta!lish sales office,
showrooms !oth at home and a!road for the e*pansion of markets of the products of the
company.
)ORE E*POR$ O $&E )O+PA",

+. +00, )-'./( ./I)0()1 20I( #3/4)0(" 520I((I0#, 16)I0#,
78((I0#, ")9I0#, %I0I":I0#;
4)0"<B.6"<#I/=>"?(":I/(
4)0"<B.6"?'.=.":I/(
4)0"<B.6"?%=))7)@372)("
4)0"<B.6"?20I(":./("
301 3== 2I01" .% 20I( #3/4)0("
2. +00, )-'./( ./I)0()1 7.4'8()/IA)1 #3/4)0(" )4B/.I1)/6
'/.187(I.0 73'37I(6 ')/ 4.0(:
20,000 1.A)0 (. ":I/(
B,000 1.A)0" '.=. ":I/(
2,000 1.A)0 %=))7) @372)("
'/.187(I.0 =)31 (I4)
=)31 (I4) .% B$ 136" %/.4 (:) 13() .% /)7)IC0# .% 7=)30 =<7.
'/I0( ")7(I.0
"=.0.1escription Dnty 4odel 'roduction
7apacity
0+. E0 feet>s printing ta!le 02 %6?0F20 $000 pcs
02. 1esign 1evelopment 0+
0G. :it setting machine 9ith 7ompressor 02
0B. Belt 7uring 0+
Board of 'irectors-
(he names of the !oard of the directors of the company are given followsH
#ntrod.ction to the Report
Bac/gro.nd of the Pro0ect-
"tudents of 3mericanInternational8niversity I Bangladesh 53I8B; have to e*perience an
Internship session which is an essential part of 4B3 program. "tudents are assigned and<or
employed themselves in an Intern program while they are in the closing stages of their
graduation. 3fter successfully finish the internship period students su!mit a report revealing
their findings, knowledge as well as e*perience. 7ourse coordinator and assigned
organiational personnel will guide or assist every individual who are taking part in the
internship period.
3s part of the internship 4B3 'rogram of )*port faculty of the 3merican International
8niversity?Bangladesh 53I8B; (he o!jective of the program is to e*pose the student in the
organiation work situation.
)ach student is re&uired to undergo the program and prepare a report according to a format
specified !y the supervision teacher. (his report is an end result of an internship attachment
with /4# sector in Bangladesh, as per the advice and recommendations of the honora!le
"upervisors +r( R( $are1.e +o.d.d the main concentration of this report is #arment
Industry of Bangladesh particular reference. I was assigned to do my internship in 2
A%#O" L$' for the period. I was assigned in the #arments 1ivision. 4y 'roject was on
the topic of Problems 3 Prospects of Readymade Garments 4R+G5 Export in
Bangladesh.
#ntrod.ction of the $opic-
(he topic of this report is JProblems 3 Prospects of Readymade Garments 4R+G5
Export in Bangladesh.6 In this report I am trying to find out the pro!lem and prospect
situation of /4# sector in Bangladesh, means how !etter the /4# sector doing in our
country or not and its future. (he prospects of /4# sector in our country, means the future of
/4# sector in our country and also the pro!lems of /4# sector that the owner of the /4#
sector have to face when they start or after the starting what kinds of pro!lems the /4#
sector has to face to survive the competitive international market. )*ternal factors such as
e*port, import, remittances and foreign aid have always played important roles to
Bangladesh>s economy, though the relative importance of various e*ternal factors has
changed over time. (his study has analyed the trend, structure and changing features of the
e*ternal sector of Bangladesh. Based on the past performance and changes in the glo!al
economy.
9e know that Bangladesh #arments Buying house 3ssociation 5B#B3; is one of the
association that mainly work for the garments /4# sectors in our country. B#B3 has
!ecome one of the reputed 3ssociations in Bangladesh. B#B3 e*pectations to work under
one platform with its all mem!er and gradually increase of strength of economic status in the
country. It is universal true, /4# sector contri!uted 7$, of total garments earning in
Bangladesh and B#B3 are continue to engage to increase its> economic growth.
B#B3 firmly !elieve its mem!er are the principal sponsors of B#B3 accomplishments and
our valued mem!er>s can rely on B#B3 distinguished services and professional e*pertise
from all levels of personnel. (he organiational mission of B#B3 is to ensure 4em!er>s and
(rade Body>s satisfaction through committed endeavors of its 3ssociation =eaders. B#B3
has planned to conduct individual International %air for its mem!er and to focus latest fashion
clothing with the contri!utions of International 7ham!er of 7ommerce and International
(rade Body. (he associations are committed to !oost professional activities ena!le to !ring
highest growth of economic as well as to act its identities into the #lo!al market.
Rationale of the %t.dy
/4# sector is one of the most progressing sectors in Bangladesh. 0ow?a?days the )*port of
/4# sector grows rapidly in our country. 4ost of the )*port people of our country are very
much interested in this new )*port sector. 9e know that our garments products are very good
in &uality and for this reason the international market demand our products. (he other reason
that>s why our products are very much appreciated in the world market that is its low cost.
9e know that the la!ors cost of our country is very cheaper than the other neigh!ors
countries, so the )*port people of our country can delivery a product at a lower price than the
competitors other countries. 3lso this is a very profita!le )*port for the )*port people and all
of these reasons the future of the /4# sector in our country is very !right.
But there are some pro!lems also stand in this profita!le sector. If our country want do !etter
in this sector its might has to solve those pro!lems immediately. It is necessary that if our
government and also the people who are involve in /4# sector make together and protect
the pro!lems as soon as possi!le if we want to alive this profita!le sectors. Because today>s
market is very competitive market. If we are late then you are sure that the other can take
your position very &uickly.
%cope of the %t.dy-
(he field of study has !een for the first portion the #arments division activities. %or the /4#
sector analysis and make sure the #arments sector development with achieve )*port from
a!road.
Limitations of the st.dy-
"ince our study is !ased on !oth primary and secondary data, there is a possi!ility of getting
fake information. If the surveyed personnel provide me with any fa!ricated information a!out
their opinion of their organiation, then the report findings may !e erroneous. 3!ove all, this
study is weak in some points. (he nota!le ones are as underH
3ll the department of corporate office was not physically visited.
/elevant papers and documents were not availa!le sufficiently.
(he time of this study was very inade&uate to o!tain depth knowledge in every
department.
"ome of the officials of can>t help me to provide sufficient information.
(he !ooks and journal of garments sector )*port are not availa!le in the market.
=ack of e*perience in this field.
Ob0ective of the Report-
Broad Ob0ectives-
(he study was conducted to make an analysis of the /4# sector of Bangladesh. (his report
shows the today>s /4# situation in our country. :ow much it doing in present day and in the
recent future and also the pro!lems it faces in regular !asis.
%pecific Ob0ectives-
(he specific o!jective of the report is to know in details a!out the delin&uent pro!lems and
prospects of the Bangladesh /4# sector. (he 'roject has !een directed !y the following
specific .!jectiveH
1evelop the relation with ultimate Buyer. (he focus will !e long term relation.
3ssessment the competitive the #lo!al 4arket.
3dministrative and 'roduction 'rocedure how to develop.
'ositive and negative atmosphere in /4# sector and what is the real solution.
Duality assurance as per Buyer re&uirement. 3 good &uality makes a good )*port.
=astly, Influence the Buyer to our /4# )*port.
+ethodology
Area of #nvestigation-
I would use !oth primary and secondary data. In case of primary data I will refer to direct
interviewing of the managements of the %K %3"I.0 =(1 =td. But in generally I use mostly
the secondary data.
%o.rce of #nformation-
Primary-
(he primary data are collected from the e*perts who are involving with the /4# sector in a
long period help me a lot.
%econdary-
(he secondary data of the study are !ased on some of the important we!sites which are
related with /4# sector. I am also using some journals and some !ooks which are related
mostly the /4# sector.
%ignificance of the Pro0ect-
(he significance of the study is to gain in sight knowledge a!out the overall /4# )*port of
Bangladesh. (his study will also give me a vague idea a!out the economical condition and
the pro!lems that they face in different situations, their international competitors, the main
products of our /4# companies etc. I also !elieve that, these things will help me a lot if I
want to start a /4# )*port in future. (his report contains a descriptive study on J'ro!lems
& 'rospects of /4# )*port in BangladeshL. In this report I have tried my !est to gather all
the necessary and relevant information for preparing a complete paper on this topic.
Analysis and #nterpretation of the 'ata
In Bangladesh, agriculture has !een the !ack!one of economy and chief source of income for
the people. #overnment wants to decrease poverty !y getting highest productivity from
agriculture and achieve self?reliance in food production. 3part from agriculture, the country
is much concerned a!out the growth of e*port division. Bangladesh have accelerated and
changed her e*ports su!stantially from time to time. 3fter Bangladesh came into !eing, jute
and tea were the most e*port?oriented industries. But with the continual perils of flood,
failing jute fi!er prices and a considera!le decline in world demand, the role of the jute sector
to the country>s economy has deteriorated. 3fter that, focus has !een shifted to the function of
production sector, especially in garment industry.
(he shift from a rural, agrarian economy to an ur!an, industrial economy is integral to the
process of economic development. 3lthough policymakers in the least developed countries
5=17s; have, at various times, attempted to make agriculture the primary engine of economic
growth and employment generation, this approach has not worked, not least !ecause of the
contri!utions of the #reen /evolution, which has had the dual effect of increasing
agricultural productivity in the =17s and displacing the rural la!or force at the same time.
=ed !y the e*ample of the )ast 3sian economies, most =17s now accept the need for greater
industrialiation as the fastest path to economic growth. In particular, countries such as @apan,
(aiwan and "outh 2orea have demonstrated that an e*port?oriented industrial strategy can
not only raise per capita income and living standards in a relatively short timeM it can also
play a vital role in moderniing the economy and integrating it with the glo!al
economic system.
Bangladesh, one of the archetypal =17s, has also !een following the same route for the last
G0 years. .nce derided as a J!asket?caseL !y :enry 2issinger 5(he )conomist, +FFE;, the
country stum!led across an economic opportunity in the late +F70s. 0ew rules had come to
govern the international trade in te*tiles and apparel, allowing low?cost suppliers to gain a
foothold in 3merican and )uropean markets. 3ssisted !y foreign partners, and largely
unaided !y the government, entrepreneurs seied the opportunity and e*ploited it to the
fullest. .ver a period of G0 years, the garments e*port sector has grown into a NE !illion
industry that employs over a million people. In the process, it has !oosted the overall
economic growth of the country and raised the via!ility of other e*port?oriented sectors.
(his essay analyes the processes !y which glo!al trading rules came to help out a poor
country like Bangladesh. It demonstrates the impact of the rule changes on the garments
sector, and the response of the sector to multiple challenges and o!stacles. It also discusses
what steps Bangladesh should take in order to deal with the full li!eraliation of the
international garments trade, which occurred in @anuary 200$ and which could potentially
threaten the country>s growth prospects. %inally, it details some of the recent developments
that have occurred since li!eraliation took effect.
(he tremendous success of readymade garment e*ports from Bangladesh over the last two
decades has surpassed the most optimistic e*pectations. (oday the apparel e*port sector is a
multi?!illion?dollar manufacturing and e*port industry in the country. (he overall impact of
the readymade garment e*ports is certainly one of the most significant social and economic
developments in contemporary Bangladesh. 9ith over one and a half million women
workers employed in semi?skilled and skilled jo!s producing clothing for e*ports, the
development of the apparel e*port industry has had far?reaching implications for the society
and economy of Bangladesh.
Garment #nd.stry of Bangladesh
(he /4# industry of Bangladesh has e*panded dramatically over the last three decades.
(raditionally, the jute industry dominated the industrial sector of the country until the +F70s.
"ince the early +FK0s, the /4# industry has emerged as an important player in the economy
of the country and has gradually replaced the jute industry. In Bangladesh the /4# sector is
one of the most profita!le sectors in recent years.
%or this reason most of the people of our country are very much interested a!out this sector.
3s a result in now days in our country there are some successful /4# are introduce which
can compute the foreign !uying house in international market. (hey already !it some of the
successful /4# in another country. It is a good sign for Bangladesh that (he %ashion
1esigning profession has recently emerged as one of the most demanda!le careers among the
youth. (hese young folks have their own creative style of dressing and !elief in setting a
trend rather than following a trend set !y others. 3 career in fashion design not only involves
meeting glamorous people and interacting with rich and famous !ut also gives an impetus to
the creative flair of the people who possess a sense of style. But still Bangladesh is struggling
to esta!lish a standard in fashion design for international market.
(he future of the Bangladeshi te*tile production lies in the development of high?value?added
products, suita!le for long?term e*port markets and for the local market in short?term. In
order to develop such products, Bangladesh needs strengthening of its design potential. (his
should mainly !e done through training Bangladeshi designers with the help of the foreign
designers. (his way, product development and training in the workplace will !e com!ined,
giving !oth short term and longer?term effects. (his is a large sector supporting the newly
esta!lished schools through training the designers for this industry should !e considered as
important investment for market sustaina!ility.
%or Bangladesh, the readymade garment e*port industry has !een the prover!ial goose that
lays the golden eggs for over fifteen years now. (he sector now dominates the modern
economy in e*port earnings, secondary impact and employment generated. (he events in
+FFK serve to highlight the vulnera!ility of this industry to !oth internal and e*ternal shocks
on the demand and supply side. #iven the dominance of the sector in the overall modern
economy of Bangladesh, this vulnera!ility should !e a matter of some concern to the
policymakers in Bangladesh. 3lthough in gross terms the sector>s contri!utions to the
country>s e*port earnings is around 7B percent, in net terms the share would !e much less
partially !ecause the !ackward linkages in te*tile have !een slow to develop. (he
dependence on a single sector, no matter how resilient or sturdy that sector is, is a matter of
policy concern. 9e !elieve the policymakers in Bangladesh should work to reduce this
dependence !y moving &uickly to develop the other e*port industries using the lessons
learned from the success of apparel e*ports. "upport for the apparel sector should not !e
reduced. In fact, another way to reduce the vulnera!ility is to diversify the product and the
market mi*. It is heartening to o!serve that the knit products are rapidly gaining share in
overall garment e*ports as these products are sold in &uota?free markets and reflect the
strength of Bangladeshi producers in the fully competitive glo!al apparel markets.
'reliminary data and informal evidence indicate that this sector seems to have weathered the
devastating floods relatively well. (he industry is one hundred percent e*port?oriented and
therefore insulated from domestic demand shocksM however, it remains vulnera!le to
domestic supply shocks and the smooth functioning of the !anking, transportation and other
forward and !ackward linkage sectors of the economy. (he 1haka?7hittagong road remains
the main transportation link connecting the production units, mostly situated in and around
1haka and the port in 7hittagong, where the raw material and the finished products are
shipped in and out. 1espite increased dependence on air transportation, trucks remain the
main vehicles for transporting raw materials and finished products for Bangladesh garment
e*ports. (he floods disrupted the normal flow of traffic on this road.
)ventually, this road link was completely severed for several days when large sections of the
road went under water for a few weeks during the latter phase of the floods. (his delinking
of the road connection !etween 1haka and the port in 7hittagong was as serious a threat as
one can imagine for the garment e*porters. (he industry responded !y calling upon the
Bangladesh navy to help with trawlers and renting a plane from (hai 3ir that was used to
directly fly garment consignments from the 1haka airport to the 7hittagong airport several
times a day.
#mportant iss.es related to the Bangladesh ready7made
garment ind.stry

Year(s) Issue

+F77?+FK0 )arly period of growth
+FK2?+FK$ Boom days
+FK$ Imposition of &uota restrictions
+FF0s 2nitwear sector developed significantly
+FFG?+FF$
7hild la!or issue and its
solution
200G 9ithdrawal of 7anadian &uota restriction
200$
'hase?out of e*port?&uota
system

"ourceH 7ompiled !y the author from Duddus and /ashid 52000;, 4ainuddin 52000; and
data!ases of the Bangladesh #arment 4anufacturers and )*porters 3ssociation, and the
)*port 'romotion Bureau, Bangladesh.
(a!le?+H #rowth of #arments factories in Bangladesh
,ear "o( of actory )ompo.nd Growth Rate in 8
+F7+ $ I
+F77 7 $.77
+FK+ 7K K2.70
+FKG +B+ GB.B$
+FKB?K$ GKB E$.0G
+FKF?F0 7$F +B.E0
+FFB?F$ 2+K2 2G.$2
+FFF?00 G200 7.FE
200B?0$ B+07 $.+2
200$?0E B2$0 G.BK
"ourceH Carious articles and 3nnual /eport of B#4)3
(he (a!le?0+ shows that the growth was very slow till +F77 and got momentum from +F77 to
200$?0E in terms of num!er of industry. But the compound growth rate was highest till +FK+
and the rate was very good during +FKF?F0 to +FFB?F$ and thereafter i.e. +FFB?F$ to 200B?0$,
the industrial growth has !een declined though the num!ers of industries have !een
increased. (he capacity as well as num!er of e&uipments is very good indicator to e*amine
the actual position of the garment industry as well as sie of the industry. In such a conte*t,
the following (a!le deals in this regard.
(a!le?2H #arments Industries with num!er of 4achine
,ear Garment #nd.stry having "o( of +achine $otal
8p to +00 +0+ I 200 20+ and over
200B 22$G 5EB; 72E 52+; $G+ 5+$; G$+0 5+00;
200$ 227$ 5E2; 77G 52+; E20 5+7; GEEK 5+00;
"ourceH 3nnual /eport of B#4)3. %igures in parentheses indicate percentage
%rom the (a!le 02 it is found that more than half of the total garment industries in
Bangladesh have the num!er of machines upto +00 or less than +00 and very few industries
have the machine more than 200. It indicates that the small scale industries have !een
dominated in the garment sector.
7urrently, there are more than B,000 /4# firms in Bangladesh. 4ore than F$ per cent of
those firms are locally owned with the e*ception of a few foreign firms located in e*port
processing ones 5#onales, 2002;. (he /4# firms are located mainly in three main citiesH
the capital city 1haka, the port city 7hittagong and the industrial city 0arayangonj.
Bangladesh /4# firms vary in sie. Based on Bangladesh #arment 4anufacturers and
)*porters 3ssociation 5B#4)3; data, 4ainuddin 52000; found that in +FF7 more than 7$
per cent of the firms employed a ma*imum of B00 employees each. #arment companies in
Bangladesh form formal or informal groups. (he grouping helps to share manufacturing
activities, to diversify risksM horiontal as well as vertical coordination can !e easily found in
such group activities.
/eady?made garments manufactured in Bangladesh are divided mainly into two !road
categoriesH woven and knit products. "hirts, (?shirts and trousers are the main woven
products and undergarments, socks, stockings, (?shirts, sweaters and other casual and soft
garments are the main knit products. 9oven garment products still dominate the garment
e*port earnings of the country. (he share of knit garment products has !een increasing since
the early +FF0sM such products currently account for more than B0 per cent of the country>s
total /4# e*port earnings. 3lthough various types of garments are manufactured in the
country, only a few categories, such as shirts, (?shirts, trousers, jackets and sweaters,
constitute the major production?share 5B#4)3 we!siteM and 0ath, 200+;. )conomies of
scale for large?scale production and e*port?&uota holdings in the corresponding categories are
the principal reasons for such a narrow product concentration.
Administration str.ct.re of garments- %rom my own view I draw a structure of
management and try to descri!e the work of all designation in respect of Bangladeshi
#arments industry.
(op =evel<
3dministration
:ead level
4iddle?=evel <
/elation with (op &=ower
=ower =evel < 9ork =evel .fficer
$op7Level- In top?level position first designation is 4anaging 1irector than 1irector for each
section as for e*ampleH %inance director, 4arketing director, 'roduction director. But in most
of the garments of Bangladesh there is no finance director. In the top level we also consider
the post of general manager who is called #4.
+iddle Level- (he 4anagers are in this level. 7ommercial officer and &uality controller also
in this level.
Lower Level- (he officers of this level are related with the production directly. (he
management of worker and work also depend this level. %or this reason these level called is
worker relation level also.
)ontrib.tion of the R+G #nd.stry
#arments Industry occupies a uni&ue position in the Bangladesh economy. It is the largest
e*porting industry in Bangladesh, which e*perienced phenomenal growth during last two
decades. By taking advantage of an insulated market under the provision of 4ulti %i!re
3greement 54%3; of #3((, it attained a high profile in terms of foreign e*change earnings,
e*ports, industrialiation and contri!ution to #1' within a short span of time. (he industry
plays a key role in employment generation and in the provision of income to the poor. 0early
two million workers one directly and more than ten million inha!itants are indirectly
associated with the industry. (he sector has also played a significant role in the socio?
economic development of the country. In such a conte*t, the trend and growth of garments
e*port and its contri!ution to total e*ports and #1' has !een e*amined the following ta!le
shows the position.
(a!le?GH #rowth and (rend of #arments )*ports, and contri!ution to #1' 53mounts in
4illion 8"1;
,ear Garment Export $otal Export %hare to $otal Export %hare to
G'P in 8 in 8
+FKB?K$ ++E FGB +2.B2 O
+FKF?F0 E2B 5B0; +F2B 5+E; G2.BG 52+; O
+FFB?F$ 222K 52F; GB7G 5+G; EB.+$ 5+$; $.K7
+FFF?00 BGBF 5+B; $7$2 5++; 7$.E+ 5G; F.2G 5F;
200B?0$ EB+K 5K; KE$$ 5F; 7B.+$ 5?+; +0.EG 5G;
200$?0E 7F0+ 52G; +0$2E 522; 7$.0E 5+; +2.EB 52;
%o.rce- )conomic /eview of Bangladesh, B#4)3 and 7omputation made !y author.
%igures in parentheses indicate compound growth rates 57#/; for the respective periods.
It is revealed from the (a!le 0G that the value of garment e*ports, share of garments e*port to
total e*ports and contri!ution to #1' have !een increased significantly during the period
from +FKB?K$ to 200$?0E. (he total garments e*port in 200$?0E is more than EK times
compared to garments e*ports in +FKB?K$ whereas total country>s e*port for the same period
has increased !y ++ times. In terms of #1', contri!ution of garments e*port is significantM it
reaches +2.EB percent of #1' in 200$?0E which was only $.K7 percent in +FKF?F0. It is a
clear indication of the contri!ution to the overall economy. It also plays a pivotal role to
promote the development of linkage small scale industries. %or instance, manufacturing of
intermediate product such as dyeing, printing, ippers, la!els has !egan to take a foothold on
limited scale and is e*pected to grow significantly. 4oreover it has helped the )*port of
!asling, insurance, shipping, hotel, tourism and transportation. (he sector also has created
jo!s for a!out two million people of which 70 percent are women who mostly come from
rural areas. (he sector opened up employment opportunities for many more individuals
through direct and indirect economic activities, which eventually helps the country>s social
development, woman empowerment and poverty alleviation. In such a way the economy of
Bangladesh is getting favora!ly contri!ution from this industry.
.ne of the key advantages of the /4# industry is its cheap la!or force, which provides a
competitive edge over its competitors. (he sector has created jo!s for a!out two million
people of which 70 percent are women who mostly come from rural areas. (he sector opened
up employment opportunities for many more individuals through direct and indirect
economic activities, which eventually helps the country>s social development, woman
empowerment and poverty alleviation.
Garments Prod.ct Portfolio and its 'iversification
(he specific character of products and level of industrial development indeed determines its
variance of product diversification. In such a conte*t, the product mi*, product line as well as
product diversification are very important strategies for any industry to develop its market !y
meeting the present market re&uirements. %or the garments industry it is also very important
!ecause product diversification will call for developing capa!ility for product development
and product design especially in response to fast changes in fashion. (he growth pattern of
garments e*port can !e categoried into two distinct phases. 1uring the initial phase it was
the woven category. "econd phase is the emergence of knitwear products. .n the other hand,
an analysis of the product mi* of the garments industry revealed that so far Bangladesh has
!een a!le to e*port very limited categories of products. In such a conte*t, an attempt has !een
made to e*amine the growth and trend of product portfolio or categories of products e*ported
from Bangladesh. (he following (a!le deal with the value and &uantity of different garment
products e*port including their growth pattern from +FF2?FG to 200$?0E
(a!le?BH 'attern of 9oven and 2nitwear #arments )*port 5%igures in 4illion;
,ear Export in +illion 9%' Export in +illion 'ozen
9oven 2nit (otal 9oven 2nit (otal
+FF2?FG +2B0 5KE; 20$ 5+B; +BB$ GE 577; ++ 52G; B7
+FFB?F$ +KG$ 5K2; GFG 5+K; 222K B7 57$; +E 52$; EG
+FFF?00 G0K+ 57+; +2EK 52F; BGBF E7 5E0; B$ 5B0; ++2
200B?0$ G$FK 5$E; 2K20 5BB; EB+K F2 5BG; +20 5$7; 2+2
200$?0E B0KB 5$2; GK+7 5BK; 7F0+ +0F 5B0; +E$ 5E0; 27B
7#/ 5,; F.E0 2$.22 +G.FE K.F0 2G.+E +B.$2
%o.rce- #arments )*port 1ata, B#4)3 and )*port 'romotion Bureau?)'B.
%igures in parentheses indicate the share in percentage. 7#/ stands for 7ompound #rowth
/ate.
%rom the (a!le 0B it is evident that the compound growth rate of knit garment e*port is more
than woven garment e*port !oth in terms of value and &uantity for the period of +FF2?FG to
200$?0E. (he share of knit garments in total e*port has !een increased significantly !oth in
terms of value and &uantity. (he share of woven garment in total garments e*port has !een
decreased from KE percent in +FF2?FG to $2 percent in 200$?0E. It is o!served that the
demand for knit garment is increasing in the e*port market. It is also o!served that the e*port
&uantity of knit garments has !een e*ceeded the e*port &uantity of woven garments in 200$?
0E. (he position can !e !etter e*plained if we look into the more details of the product mi* in
the a!ove categories of garments. (he garment sector has !een a!le to diversify the product
!ase ranging from ordinary shirts, (?shirts, trousers, shorts, pajama, ladies and children>s
wear to sophisticated high value items like &uality shirts, !randed jeans, jackets, sweater,
em!roidered wear etc. In such a conte*t, an attempt has !een made to classify the garments
e*port into different products in order to understand product diversification strategy and its
relative importance and performance as well. (he following (a!le shows the picture in this
regard.
(a!le?$H 'attern of )*port 'erformance of 1ifferent #arments 'roducts 53mount in 4illion
8"1;
,ear %hirts $ro.sers :ac/ets $7%hirts %weaters Others
+FFB?F$ 7F+ 5GE; +0+ 5$; +B7 57; 2G2 5+0; 0<3 0<3
+FFF?00 +02+ 52G; BKB 5++; BB0 5+0; $EB 5+G; G2$ 5K; +$+$ 5G$;
200B?0$ +0$G 5+E; +EEK 52E; BG0 57; +G$0 52+; KFG 5+B; +02B 5+E;
200$?0E +0$7 5+G; 2+E$ 527; GF0 5$; +7K2 52G; +0BB 5+G; +BEG 5+F;
7#/ 5,; 2.E7 G2.+G F.2K 20.GE 2+.B7 O
%o.rce- #arments )*port 1ata, B#4)3 and )*port 'romotion Bureau?)'B. %igures in
parentheses indicate the share in percentage.7#/ stands for 7ompound #rowth /ate.
%rom the (a!le 0$, it is evident that the highest compound growth rate has !een found in
(rousers G2.+G percent, followed !y (?shirts 20.GE percent, @ackets F.2K percent, and (?"hirt
2.E7 percent respectively during the period of +FFB?F$ to 200$?0E. (he rate of "weater is also
significant during the period of +FFF?2000 to 200$?0E. It is o!served that the share of
(rousers and (?"hirt in the total garment e*port is increasing. .n the other hand, the share of
shirts and @ackets is declining trend. (he %igures indicate that Bangladesh has concentrated in
the production and e*port of (rousers, (?"hirts and "weater. (his mean>s that there is a scope
and actually need for structural change in product mi*.
Exporting )ondition of Garments #nd.stry
(he /eady?4ade #arments 5/4#; industry occupies a uni&ue position in the Bangladesh
economy. It is the largest e*porting industry in Bangladesh, which e*perienced phenomenal
growth during the last 20 years. By taking advantage of an insulated market under the
provision of 4ulti %i!re 3greement 54%3; of #3((, it attained a high profile in terms of
foreign e*change earnings, e*ports, industrialiation and contri!ution to #1' within a short
span of time. (he industry plays a key role in employment generation and in the provision of
income to the poor. 0early two million workers are directly and more than ten million
inha!itants are indirectly associated with the industry. .ver the past twenty years, the num!er
of manufacturing units has grown from +K0 to over GE00. (he sector has also played a
significant role in the socio?economic development of the country.
(he 3greement on (e*tile and 7lothing 53(7; introduced in +FFB, aimed at !ringing
te*tiles and clothing within the domain of 9(. rules !y a!olishing all &uotas !y the end of
200B. It provides an adjustment period of +0 years, so that countries affected !y the 4%3
could take the necessary steps to adjust to the new trading environment. =i!eraliation of
trade following the 8ruguay /ound agreement presents opportunities as well as challenges
for a developing country like Bangladesh in /4# sector. In the 'ost?8ruguay /ound period,
traditional instruments of trade policy such as tariffs, &uotas, and su!sidies will !ecome less
feasi!le and less relevant. In a li!eralied trade regime, competition among te*tiles and
clothing e*porting countries is likely to !ecome intense. (he o!jective of this paper is to
identify the prospects of /4# industry after the 4%3 phase out !y analying the current
scenario along with different policy measures and the availa!le options in order to !e
more competitive in the new regime.
(he e*port made !y #arments Industries of Bangladesh is improving year after year e*cept
some of the year. "trike, layout, shutdown of company, political pro!lem, economic pro!lem,
inflation etc. are the prime cause of decreasing e*port in this important sector. But a!ove it,
/eadymade #arments Industries is the leading sector in e*port sector.
6ear )*port 5in 8" N million; 'ercentage change
+FF+ I F2 E2B.+E G2.BF
+FF2 I FG KEE.K2 GK.KK
+FFG I FB ++K2.$7 GE.BG
+FFB I F$ +BB$.02 22.+F
+FF$ I FE +$$$.7F 7.E7
+FFE I F7 222K.G$ BG.B7
+FF7 I FK 2$B7.+G +B.++
+FFK I FF G00+.2$ +7.KG
+FFF I 00 G7K+.FB 2E.0+
2000 I 0+ B0+F.FK E.2F
200+ I 02 BGBF.B+ K.+F
2002 I 0G BK$F.KG ++.7B
200G I 0B B$KG.7$ $.EK
200B I 0$ BF+2.+2 7.2+
200$ I 0E $EKE.0F +$.KG
%igureH 6ear )*port !y the garments industries 5in 8" N million;
'osition of Bangladesh is e*porting product in 8"3 is not very satisfactory !ut this situation
is !etter than any other condition of the previous time. But if our #overnment take some
essential law and !reak out the wall of !iasness then the position of Bangladesh in #arments
sector would !e hope to !etter.
indings of %t.dy
(he international trade of te*tiles is highly competitive. "kill, design and &uality are
essential. But, e&ually important is the need to assess national and international demands and
integrate them into the production process. (here is no dou!t that very few of the
Bangladeshi designers know the international markets. (here is a unison cry in Bangladesh
saying that they need help from foreign designers to make their products marketa!le
internationally. (his is even more the case if the products are going to !e developed into high?
value niche products.
(here are very few designers in the garment industry or in crafts with a degree in design. (he
ones that do have a design education are educated a!road I many in India and some in the
9est. "ome of the designers working in the craft )*portes have an education from Institute of
%ine 3rts, 8niversity of 1haka. 3lthough this educational !ackground in com!ination with
e*perience from the craft )*portes, in many cases seem to work well, some say that a lot of
people in the trade do not understand the difference !etween an artist and a designer, J1esign
is planning step !y step and the artists do not know how to do that.L .thers say that the
creativity e*ists, !ut the understanding of the market is lacking. 1esigners, of whatever level
of training, who can work for a domestic market, are undou!tedly in advantageous position.
(he practice of trial and error is certainly of value and a lot less costly. (he e*posure to
shifting trends allows a designer to develop a sense of the market and, in time, the a!ility to
predict market trends and design with confidence to meet the demands. If a designer is
re&uired to design for a foreign rather than local market, then certain skills are not a!le to
develop in a full and relevant way.
(he pro!lem is the same for designers either in industry or crafts. In many respects, they are
!eing asked to design for Pvirtual> situations only. 3fter all, very few of the designers in these
)*portes will ever get the chance to visit the markets they design for, let alone !e a!le to
spend time enough in them to really develop an understanding of the nuances of a situation.
3ccordingly, western designers can !est help with the designs for the e*port markets of
Bangladesh. :owever, as the local market is changing rapidly due to increased !uying power
of internationally?oriented middle class, the products designed for the e*port market may
very well have a future in the local market.
(he garment industry of Bangladesh has !een the key e*port division and a main source of
foreign e*change for the last 2$ years. 0ational la!or laws do not apply in the )'As, leaving
B)'A3 in full control over work conditions, wages and !enefits. #arment factories in
Bangladesh provide employment to B0 percent of industrial workers. But without the proper
laws the worker are demanding their various wants and as a result conflict is !egan with the
industry.
=ow working salary is another vital fact which makes the la!or conflict. 9orker made strike,
layout to capture their demand. "ome time !onus and the overtime salary are the important
cause of crisis. Insufficient government policy a!out this sector is a great pro!lem in
#arments 7ompany.
(here are some other pro!lems which are associated with this sector. (hose are? lack of
marketing tactics, a!sence of easily on?hand middle management, a small num!er of
manufacturing methods, lack of training organiations for industrial workers, supervisors and
managers, autocratic approach of nearly all the investors, fewer process units for te*tiles and
garments, sluggish !ackward or forward !lending procedure, incompetent ports, entry<e*it
complicated and loading<unloading takes much time, time?consuming custom clearance etc.
(here are several findings, which will e*plain the reasons why Bangladesh is struggling
in international marketHOOOOOOOOOOOOOOOOO
%carcity of Raw +aterials-
(here is no alternative of ample supply of raw materials in order to !ecome self ?
sufficient in any industry. (he raw materials of the garment industry of Bangladesh is foreign
dependent. Bangladesh has to import raw materials of garments from a!road in order to
process it in Bangladesh. 3!out 70, of garment e*port income has to !e spent for the raw
materials. 4oreover, the e*port and import policy of Bangladesh is very weak. "o, the
scarcity of raw materials for the garment industry> in Bangladesh is a great threat.
ail to delivery the prod.ct on the date-
(his is one of the most common pro!lems for almost all the /4# in the world to delivery the
products on the date and in our country its percent is high. 1elivery the products on the date
is very important for the /4# )*port the !uyer who give the order have their own )*port
strategy and when miss the delivery on the specific date their work schedule will hamper and
it makes very !ad impression for /4# company and also the country. In our country it is
happen mostly !ecause of many unusual factors like ?hortal, la!or strike, vehicle strike etc.
and in our country we see those factors a lot. "o these are very !ig pro!lems for the /4#
)*port.
Restriction of tariff and cotta system-
"ometimes tariff and cotta system create some pro!lems for our country. Because our country
is a developing country and the /4# sector is a new sector. In the cotta system we can
delivery just a certain &uantity of garment products. "o if we wish to produce more or we
have the capa!ility to produce more garments products it is not possi!le !ecause we can>t sell
our product in the international market !ecause of the cotta system.
#ncrease the price of raw material-
9e know that the prices of raw materials are increasing day !y day in inside the country and
also the international market. Because of the increasing of the price of raw materials the cost
of production of the garments products are also increases. "o if the production cost increases
the price of the finish goods also increase and !ecause of that we can>t offer the !uyer at a
lower price in any garments products and for this reason there is a chance for our #arments
companies to loose their position in the international market and in this situation any !ody
can take the chance to hold their place.
%ec.rity of foreign b.yer-
(his is very important for the #arments )*port to ensure the security for the foreign !uyers
!ecause they come here to !uy the garments products with a lot of money. "o if they feel
unsecured to come in this country we can>t sell our product in a!road and if fail to sell them
we can not survive the market. %or this reason the seller of our country should ensure any
kinds of security they needs and also provide them other facilities what they needs. But in our
country sometime the seller doesn>t careful a!out this site. If they find any lack in their
security they can move to other country. "o we have to alert in this particular area.
Lac/ of training programs-
(he service providers do not have any relevant training and education in this particular sector.
(hey are generally with +0?+2 years of general education and learn designing while in jo!.
But in this area train persons are very much needed who have a lot of knowledge in this area.
But it is a matter of sorrow that in our country there is a lack of those types of institutions
where they can train themselves as a skill and knowledgea!le persons. But if we look in the
others countries in the world we can see that they have a lot of institutions where they can
train the persons who are interested in this sector. %or this reasons they doing !etter in this
sector.
Lac/ of creativity-
9e already discuss that there is a lack of institutions in our country who can train the
employees to grow their creativity in this sector. 7reativity is so important !ecause in every
time the competitor tries to introduce new designs products in the market to use their
creativity. "o if we fail to show our creativity in our designs we can>t touch the market. (here
is little creativity as the customer normally comes with his<her own idea a!out the design !ut
this is not enough for the /4# sector.
+aintain the 1.ality of prod.ct-
4aintain the &uality is very important in this sector. 9e already know that the international
market is very much competitive and in this market if any !ody wants to survive he might
have to maintain the good &uality. If any!ody fails to maintain the &uality as much as high it
is very tuff for them to stay in the market. If any company fails to prove its continuous
&uality it if sure that it might through from the market !ecause any !uyer can>t !elieve the
company and as a result they cannot take any order from them. "ometimes our /4# sectors
fail to maintain the &uality and it is not a good symptom for our #arments )*port.
Political #nstability-
Bangladesh is not a sta!le country politically. 'olitical insta!ility is a great threat for any
industry of our country. %re&uent strikes and hartals are great o!stacles for the growth of any
industry. (he production cost increases and productivity decreases !ecause of fre&uent hartals
and strikes. #arment producers cannot keep their contract with !uyers !ecause of hartals and
strikes. :artals and strikes have !ecome a common phenomenon of Bangladesh.
%econdary Problems are 7
0+.4iddle man affect
02. "luggish )*port linkage
0G. 8nloading5/4; takes time
0B. (ime consuming schedule
0$. 7ommunication gap
0E. 1ependency on foreign market
07. (rade !lock
0K. 7redit pro!lem
real threat of the foreign mar/ets-
(here is the real threat of the foreign markets entering in full swing with their capital as well
as commodities and render millions of our people jo!less. 3t the same time, it would throw
unlimited opportunities for our !etter?organied )*port houses. In other words, for those who
are a!le to withstand the demands of open competition already. (he &uota regime will end
and countries can freely import or e*port with reduced custom duties. (he poor and the weak
will certainly face the music. #overnments have given their nod to #3(( agreements,
without sufficient analysis of the implications, mainly !ecause it was a law for the future.
3nd our politicians, who always fight for the present, can conveniently give away anything of
the future. 3ll the more if it is an issue of the weaker section.
(here is yet another sentiment, which leads the country into the trap of the affluent. It is the
inner deception and the !old announcements that we too are rich and advanced. J"econd to
none in the world.L 9hile the judgment is often made !ased on the premier institutions of the
#overnment, and the star trading houses of the upper society, the challenges of the lower
middle classes are easily forgotten. )ven the new te*tile policy threatens to go along the line
of deregulation and deservation. If the #overnment is a!le to provide every handloom weaver
with a power?loom unit with necessary training and infra?structure, well and good. 9e do not
deny that the power looms have an economic edge over the traditional ones.
But the real &uestion is, J3re our people prepared to take on the new technologyQL (hat they
can>t compete with the traditional loom is amply clear. 0or have they made sufficient
fortunes to move to the ne*t level on their own. In this conte*t deregulation without ade&uate
support to switch over the technology will only ruin the lives of 20 lakes weavers in the
country. (he technology up gradation fund could !e used only if the entire machinery is
modernied and if machines with a!ove +E000 revolutions per minute 5rpm; are installed in
the place of the old.
(he small spinners have come up vehemently against such tough conditions. (hey have
argued that all the te*tile units are not meant for the e*port materials and that a vast
population of India still needs clothes of ordinary material and not a highly mechanied and
costly fi!er. (hey demand for reasona!le moderniation within their e*isting units and the
(8% funds should not close the door for them, in the madness after glo!aliation and instant
moderniation.
)ompetitiveness of the Bangladesh R+G #nd.stry
(he 8nited "tates was the main e*port destination for Bangladeshi /4# products in the
early +FF0s followed !y the )uropean 8nion, !ut the )uropean 8nion has surpassed the
8nited "tates over time. (hese two destinations generate more than F0 per cent of the total
/4# e*port earnings of Bangladesh. (he shares of other importers, such as 3ustralia,
7anada, 7hina, @apan and the /ussian %ederation as well as countries in the 4iddle )ast, in
the total /4# e*port earnings of Bangladesh are minimal. (his section of the paper focuses
on surface?level competitive performance of the Bangladesh /4# industry in the 8nited
"tates and the )uropean 8nion markets only. In addition, the performance of 7hina and India
along with Bangladesh as /4# suppliers to international markets is also considered for
comparative analysis.
4a5 Export competitiveness in the 9nited %tates mar/et
Bangladesh has e*perienced some product diversification in its e*port of garments to the
8nited "tates market in recent years compared with the early +FF0s. :owever, the country>s
performance in upgrading its products is not significant with regard to the 8nited "tates
market. (he country e*perienced a sharp increase in the e*port of garment products to the
8nited "tates market in the +FF0s, !ut faced declines in e*port earnings from that country in
2002 and 200G, followed !y slow increases since 200B. (he e*ports of India also increased
rapidly in the +FF0s, although that country e*perienced comparatively slow progress in the
last few years. :owever, the /4# e*ports of 7hina to the 8nited "tates have increased at a
startling rate over the years. %or e*ample, the te*tile and garment e*port earnings of 7hina,
India and Bangladesh from the 8nited "tates were NG.E !illion, N0.K !illion and N0.B !illion
respectively in +FF0, and increased to N22.B !illion, NB.E !illion and N2.$ !illion respectively
in 200$. "uch rapid e*pansion in the e*ports of 7hina represents a major challenge to other
e*porters.
4b5 Export competitiveness in the E.ropean 9nion mar/et
Bangladesh has e*perienced !oth &uantitative and &ualitative changes in e*porting garment
products to the )uropean 8nion market during the period +FFE?200$. (he te*tile and garment
e*port earnings of Bangladesh from the )uropean 8nion increased from +.2 !illion euros in
+FFE to G.7 !illion euros in 200$. %or India and 7hina, the corresponding earnings increased
from G !illion and $.G !illion euros in +FFE to $.G !illion and 2+.+ !illion euros in 200$
respectively. #arment products generate the major share of Bangladesh>s e*port earnings
from the )uropean 8nion. :owever, !oth te*tile and garment products in 7hina and India
contri!ute to the e*port earnings from the )uropean 8nion. %or e*ample, garment products
on average generated more than a F$ per cent share of the total te*tile and garment e*ports to
the )uropean 8nion from Bangladesh during the period +FFE?200$. (he corresponding
shares for India and 7hina stand at !elow 7$ per cent and K0?F0 per cent respectively.(he top
five product groups contri!uted 7E per cent of the total garment e*port earnings of
Bangladesh from the )uropean 8nion in +FFE, and that share increased to K2 per cent in
200$. (he corresponding changes for India and 7hina were from shares of E2 per cent and GB
per cent in +FFE to $B per cent and B$ per cent in 200$ respectively. (his trend demonstrates
that product diversification in Bangladesh is lower than that of India and 7hina in e*porting
garments products to the )uropean 8nion market. 2nit garments from Bangladesh have
gained remarka!le access to the )uropean 8nion market during the period +FFE?200$
1uty? and &uota?free access of garment products manufactured under Jtwo?stage local
transformationL 5yarn to fa!rics and fa!rics to garment; have accelerated the e*ports of knit
garment products from Bangladesh to the )uropean 8nion. 3s the knit te*tile su!sector is
relatively less capital intensive and re&uires relatively simple technologies, it managed to
undergo rapid e*pansion, !enefiting from the )uropean 8nion #eneralied "ystem of
'references. (he woven part of the category has failed to utilie that facility owing to a lack
of sufficient !ackward linkages. In contrast to the )uropean 8nion, !oth knit and non?knit
products have entered the 8nited "tates market simultaneously.
9nethical Perspective of garment Export in Bangladesh-
:igh thermal pro!lem that cause for many sick
:igh dust cause for launch cancer
=ow pay for large work
7hild la!or !reak the humanity
.verrule the I=. concept a!out the worker.
Bound environment causes for mental sickness to the worker.
'ro!lem relating to &uality control for produce &uality?full product & unethical
movement of the organiation.
4ost of the production cases Bangladeshis industry failure in making alternative
inventory plan for wrong perception.
=ack of accurate and appropriate goods of inventory !ecause of unethical movement.
=ack of low e*perience a!out production and manufacturing system !ecause of there
is no training for it.
)hallenge of Globalization
Bangladesh faces the challenge of achieving accelerated economic growth and alleviating the
massive poverty that afflicts nearly two?fifths of its +G$ million people. (o meet this
challenge, market?oriented li!eraliing policy reforms were initiated in the mid?+FK0s and
were pursued much more vigorously in the +FF0s. (hese reforms were particularly aimed at
moving towards an open economic regime and integrating with the glo!al economy.
1uring the +FF0s, nota!le progress was made in economic performance. 3long with
maintaining economic sta!iliation with a significantly reduced and declining dependence on
foreign aid, the economy appeared to !egin a transition from sta!iliation to growth. (he
average annual growth in per capita income had steadily accelerated from a!out +.E per cent
per annum in the first half of the +FK0s to G.E percent !y the latter half of the +FF0s. (his
improved performance owed itself !oth to a slowdown in population growth and a sustained
increase in the rate of #1' growth, which averaged $.2 percent annually during the second
half of the +FF0s. 1uring this time, progress in the human development indicators was even
more impressive. Bangladesh was in fact among the top performing countries in the +FF0s,
when measured !y its improvement in the :uman 1evelopment Inde* 5:1I; as estimated !y
the 8nited 0ations 1evelopment 'roject 5801';. In terms of the increase in the value of
:1I !etween +FF0 and 200+, Bangladesh is surpassed only !y 7hina and 7ape Cerde.
9hile most low?income countries depend largely on the e*port of primary commodities,
Bangladesh has made the transition from !eing primarily a jute?e*porting country to a
garment?e*porting one. (his transition has !een dictated !y the country>s resource
endowment, characteried !y e*treme land scarcity and a very high population density,
making economic growth dependent on the e*port of la!or?intensive manufactures.
In the wake of the 200+ glo!al recession, Bangladesh>s reliance on foreign countries as a
market for e*ports and as a source of remittances has !ecome o!vious. If Bangladesh is to
!ecome less vulnera!le to the economic fortunes of others, it will need to strengthen its
domestic economy, creating jo!s and markets at home. 3 strong domestic sector and an
improved overall investment environment will provide a more sta!le source of income I like
what the garment industry has provided so far I and will rekindle and sustain Bangladesh>s
economic growth.
Prospects of the R+G #nd.stry
1espite many difficulties faced !y the /4# industry over the past years, it continued to
show its ro!ust performance and competitive strength. (he resilience and !old trend in this
4%3 phase?out period partly reflects the imposition of Psafeguard &uotas> !y 8" and similar
restrictions !y )8 administration on 7hina up to 200K, which has !een the largest supplier of
te*tiles and apparel to 8"3. .ther factors like price competitiveness, enhanced #"' facility,
market and product diversification, cheap la!or, increased !ackward integration, high level of
investment, and government support are among the key factors that helped the country to
continue the momentum in e*port earnings in the apparel sector. "ome of these elements are
reviewed !elow.
+ar/et 'iversification
Bangladeshi /4# products are mainly destined to the 8" and )8. Back in +FFE?F7,
Bangladesh was the 7th and $th largest apparel e*porter to the 8"3 and )uropean 8nion
respectively. (he industry was successful in e*ploring the opportunities in markets away from
)8 and 8". In %607, a successful turnaround was o!served in e*ports to third countries,
which having a negative growth in %60E rose three?fold in %607, which helped to record
2G.+ percent overall e*port growth in the /4# sector. It is anticipated that the trend of
market diversification will continue and this will help to maintain the growth momentum of
e*port earnings. 3t the same time a recent 9(. review points out that Bangladesh has not
!een a!le to e*ploit fully the duty free access to )8 that it enjoys. 9hile this is pointed out to
!e due to stringent rules of origin 5/..; criteria, the relative stagnation in e*ports to )8
re&uires further analysis.
Prod.ct 'iversification
(he growth pattern of /4# e*ports can !e categoried into two distinct phases. 1uring the
initial phase it was the woven category, which contri!uted the most. "econd phase is the
emergence of knitwear products that powered the recent dou!le digit 5year?on?year; growth
starting in %60B. In the glo!alied economy and ever?changing fashion world, product
diversification is the key to continuous )*port success. "tarting with a few items, the
entrepreneurs of the /4# sector have also !een a!le to diversify the product !ase ranging
from ordinary shirts, (?shirts, trousers, shorts, pajamas, ladies and children>s wear to
sophisticated high value items like &uality suits, !randed jeans, jackets, sweaters,
em!roidered wear etc. It is clear that value addition accrues mostly in the designer items, and
the sooner local entrepreneurs can catch on to this trend the !righter !e the /4# future.
Bac/ward #ntegration
/4# industry in Bangladesh has already proved itself to !e a resilient industry and can !e a
catalyst for further industrialiation in the country. :owever, this vital industry still depends
heavily on imported fa!rics. 3fter the li!eraliation of the &uota regime some of the major
te*tile suppliers (hailand, India, 7hina, :ong 2ong, Indonesia and (aiwan increased their
own /4# e*ports.
If Bangladesh wants to enjoy increased market access created !y the glo!al open market
economy it has no alternative !ut to produce te*tile items competitively at home through the
esta!lishment of !ackward linkage with the /4# industry. (o some e*tent the industry has
foreseen the need and has em!arked on its own capacity !uilding.
low of #nvestment
It is plausi!le that domestic entrepreneurs alone may not !e a!le to develop the te*tile
industry !y esta!lishing modern mills with ade&uate capacity to meet the growing /4#
demand. It is important to have significant flow of investment !oth in terms of finance and
technology. %igure G indicates that the investment outlook in this sector is encouraging,
although the uncertainties !efore the 4%3 phase?out period caused a sluggish investment
scenario. In part the momentum in the post?4%3 phase?out period is indicative of the efforts
underway towards capacity !uilding through !ackward integration. (his is evident in the pace
of lending to the /4# sector and in the rising import share of /4# related machinery.
:owever further progress would !e necessary to improve and sustain competitiveness on a
glo!al scale.
Policy Regime of Government
#overnment of Bangladesh has played an active role in designing policy support to the /4#
sector that includes !ack?to?!ack =<7, !onded warehouse, cash incentives, e*port credit
guarantee scheme, ta* holiday and related facilities. 3t present government operates a cash
compensation scheme through which domestic suppliers to e*port?oriented /4# units
receive a cash payment e&uivalent to $ percent of the net %.B value of e*ported garments. 3t
the same time, income ta* rate for te*tile manufacturers were reduced to +$ percent from its
earlier level for the period up to @une G0, 200K. (he reduced ta* rates and other facilities are
likely to have a positive impact on the /4# sector.
#nfrastr.ct.ral #mpediments
(he e*istence of sound infrastructural facilities is a prere&uisite for economic development.
In Bangladesh, continuing growth of the /4# sector is dependent on the development of a
strong !ackward linkage in order to reduce the lead time. :owever, other factors
constraining competitiveness of Bangladesh>s /4# e*ports included the a!sence of ade&uate
physical infrastructure and utilities.
Labor Prod.ctivity
(he productive efficiency of la!or is more important determinant for gaining comparative
advantage than the physical a!undance of la!or. In Bangladesh, the garment workers are
mostly women with little education and training. (he employment of an uneven num!er of
unskilled la!ors !y the garment factories results in low productivity and comparatively more
e*pensive apparels. Bangladesh la!or productivity is known to !e lower when it compared
with of "ri =anka, "outh 2orea and :ong 2ong. Bangladesh must look for ways to improve
the productivity of its la!or force if it wants to compete regionally if not glo!ally. Because of
cheap la!or if our country makes the la!or productivity in the ape* position, then we think
the future of this sector is highly optimistic.
Research and $raining
(he country has no dedicated research institute related to the apparel sector. /4# is highly
fashion oriented and constant market research is necessary to !ecome successful in the
)*port. B#4)3 has already esta!lished an institute which offers !achelor>s degree in
fashion designing and B24)3 is planning on setting up a research and training institute.
(hese and related initiatives need encouragement possi!ly intermediated !y donor?assisted
technology and knowledge transfer. 3 facilitating pu!lic sector role can !e very relevant here.
%.pportive Government Policy
In contrast to the pu!lic sector?led import?su!stituting industrialiation strategy pursued
during the first few years after independence, the industrialiation philosophy of the
government changed rather dramatically from the late +F70s when the emphasis was on
e*port?oriented growth to !e spearheaded !y the private sector. (owards this end, various
policy reforms were implemented in the +FK0s and +FF0s. "ome of these reformed policies
contri!uted considera!ly to the growth of the /4# industry in Bangladesh.
1uring the +FK0s, a num!er of incentives were introduced to encourage e*port activities.
"ome of them were new like the Bonded 9arehouse %acility 5B9%;, while others like the
)*port 'erformance =icense 5-'=; "cheme G7 were already in operation and were improved
upon. 3lso, re!ates were given on import duties and indirect ta*es, there were ta* reductions
on e*port income, and e*port financing was arranged. 8nder the -'= scheme, e*porters of
non?traditional products received import licenses for specific products over and a!ove their
normal percentage allotment !ased on the f.o.!. value of their e*ports.
8nder the 1uty 1raw!ack "ystem, e*porters of manufactured goods were entitled to get
refund of duties and ta*es paid on imported inputs used in e*port production, and also all
e*cise duties paid on e*ported finished goods. %or certain fast?moving items such as /4#, a
notional system of duty payments was adopted in +FK2?KG. 8nder this system, e*porters were
e*empted from paying duties and ta*es on imports used in e*port production at the time of
importation, !ut were re&uired to keep records of raw and 2+packaging materials imported.
(he duties and ta*es paya!le on the imports were kept in a suspense account. =ia!ilities to
pay the amounts in suspense were removed on proof of e*ports.
(he discussion in this section clearly points to the positive contri!ution made !y policy
reforms to the growth of the /4# industry in Bangladesh. In particular, two policiesI the
"B9 facility and the !ack?to?!ack =<7 system? led to significant reduction in cost of
producing garments and enhanced competitiveness of Bangladesh>s garments e*ports. It also
allowed garment manufacturers to earn more profit which, when necessary, could !e used to
overcome difficulties arising from weak governance. %urthermore, poor governance, reflected
in the leakage of duty?free imported fa!rics in the domestic market, parado*ically enough
also helped the garment manufacturers to earn e*tra Pprofit> and there!y ena!led them to
a!sor! the Phigh cost of doing )*portes I a fall out of !ad governance.
%.ggestion
In order to sustain the smooth growth and development of the garment industry of
Bangladesh, #overnment should play a key role to offer a good e*port policy. .therwise the
production, employment, earning of foreign currency and economic development of the
country will !e affected seriously. "ome recommendations have !een offered to face the
pro!lems of the garment industry of Bangladesh. /egarding the pro!lem of /4# sector I>ve
identified some recommendation for the !etterment of this sector. (he recommendations are
as followsH
(he #overnment of Bangladesh should play a key role for the e*pansion of the
market of garment !y diversified items for manufacture and e*port. It is very
important fact that there are many items in the /4# product lines which Bangladeshi
entrepreneurs have not yet started production. =eather items, life jackets, gloves, !ags
etc. are among few such items. 3mong other items are um!rella, nylon school !ags
and jackets, ice sport kits and wears, staffed toys, high competitive market fashion
garments are e*amples. (here are numerous such items not yet touched !y our
entrepreneurs.
#overnment also have some responsi!ility to improve the situation !y providing?
proper policy to protect the garments industries, solve the license pro!lem, &uickly
loading facility in the port, providing proper environment for the work, keep the
industry free from all kind of political pro!lem and the !iasness. 7redit must !e
provided when the industry fall in need.
3ll out efforts would !e made and steps taken for production and e*port of high
priced readymade garments in the light of the prevailing market demand. Immediate
steps shall !e taken to esta!lish a %ashion Institute pending esta!lishment of the
%ashion Institute measures will !e taken, under special arrangements, to e*tend e*pert
services to match the actual demand. =i!eral credit may !e considered for capacity
!uilding and hiring technology for producer of high &uality garments.
4ake sure that they can deliver the products !y the due date. Because it increases the
goodwill of the companies. If for any reasons the garments companies fail to delivery
the products on the date it might hamper its goodwill and if the goodwill of a
companies are hamper it is not possi!le for them to survive in the international
market. Because when they fail to delivery the goods on the date the !uyer might
faces some loss !ecause they already schedule their work with other companies and
for this reasons the !uyer might face some losses. (hey have to pay demurrage for
this unusual situation. "o in ne*t time they o!viously try to avoid this situation and as
a result the failure company cannot take any order form them.
9e know that !ecause of the increasing of the price of raw materials the cost of
production of the garments products are also increases. "o if the production cost
increases the price of the finish goods also increase and !ecause of that we can>t offer
the !uyer at a lower price in any garments products and for this reason there is a
chance for our /4# companies to loose their position in the international market and
in this situation any !ody can take the chance to hold their place. In this case the
/4# companies can produce the raw materials in domestically. 9e know that the
main raw material of this sector is cotton. "o if it can produce domestically the cost of
production can !e minimiing.
It is a !ig pro!lem for our country that there is small num!er of &ualified product
designers availa!le in /4# sector !ut it is so important for our /4# )*port.
Because we know there is a lot of competition in the international market and in their
every country want to introduce new products with new design. 9e know that today>s
world is very much style sensitive and the style changes very rapidly. %or this reason
to solve this pro!lem our government can start some training center where the
employee can improve their skill and also the /4# companies can esta!lish that
kinds of center personally or they can send some persons outside of the country
!ecause of training.
(o ensure any kinds of the security of the foreign !uyers the /4# companies have to
take any necessary steps which the !uyer say them. %or this purpose they can rent a
house of a hotel which is safety for them and ensure all the !asic facilities. "ometimes
they can rent some vehicles for their easy transportation. (hey can provide them
delicious foods what they like to eat.
.ur #arments Industries can improve their position in the world map !y reducing the
overall pro!lems. "uch as management la!or conflict, proper management policy,
efficiency of the manager, maintaina!le time schedule for the product, proper strategic
plan etc.
(o !e an upper position holder in the world #arments "ector there is no way e*cept follow
the a!ove recommendations. 9e hope !y maintaining proper management and policy
strategies our country will take the ape* position in future.
%.ggestions Regarding ire %afety
9e need to remem!er that when there is a fire, the first thing one should do is to run away
from it. 3nd this is what everyone does in such a situation. But the situation !ecome
dangerous and tragic when the escape doorways and gates are found locked. 'recautionary
should need to !e adopted are given !elowH
+. Building should !e constructed with fire resisting materials
2. 3de&uate e*its and proper escape routes should !e designed
G. 'rotection against fire and smoke should !e ensured
B. )lectrical wiring must !e properly designed, installed and maintained
$. )scape routes should !e lighted at all times, kept clear !e indicated !y signs
E. /egular fire drills should !e held
7. 1oors should !e protected and should open along the direction of escape
K. 1oors should not open on the steps and sufficient space should !e provided.
F. "moke<%ire alarm systems must !e installed
+0. 3de&uate num!er of e*tinguishers should !e provided
++. 'rior relationship with local %ire services should !e esta!lished
)oncl.sion
(he /eady?4ade #arments 5/4#; industry occupies a uni&ue position in the Bangladesh
economy. It is the largest e*porting industry in Bangladesh, which e*perienced phenomenal
growth during the last 2$ years. By taking advantage of an insulated market under the
provision of 4ulti %i!re 3greement 54%3; of #3((, it attained a high profile in terms of
foreign e*change earnings, e*ports, industrialiation and contri!ution to #1' within a short
span of time. (he industry plays a key role in employment generation and in the provision of
income to the poor. (o remain competitive in the post?4%3 phase, Bangladesh needs to
remove all the structural impediments in the transportation facilities, telecommunication
network, and power supply, management of seaport, utility services and in the law and order
situation. (he government and the /4# sector would have to jointly work together to
maintain competitiveness in the glo!al /4# market. #iven the remarka!le entrepreneurial
initiatives and the dedication of its workforce, Bangladesh can look forward to advancing its
share of the glo!al /4# market.
Bibliography
+.
www. #oogle.com
2.
www. %Kfasion.com
G.
www. #ood Duality Buying :ouse In Bangladesh.htm
B.
www. Bangladesh 2020 3n 3nalysis of #rowth 'rospect and )*ternal "ector
Behaviour.htm
$.
www. Bangladesh #arments Buying :ouse 3ssociation.htm
E.
www. 7lothing and Buying sourcing house %rom Bangladesh attire international.htm
7.
www. 7otton Bangladesh Bangladesh>s %ashion 1esign in International 4arket.htm