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| The textile and apparel industry is one of the biggest sources of Bangladesh's economic revenue (Photo: BGMEA) |
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Situated in South Asia adjacent to India, Bangladesh was ranked as the 48th largest economy in the world in terms of gross domestic product (GDP) by the International Monetary Fund (IMF) in 2008. The country's per capita income was US$ 621 in the financial year (FY) of 2008-09, with an increase of US$ 62 compared to the previous year (2007-08), according to figures of the Bangladesh Bureau of Statistics (BBS) announced in June 2009.
The textile and apparel industry is one of the biggest sources of national economic revenue. About 75% of Bangladesh's total export earnings come from ready-made garment exports, according to experts at the World Bank. The major markets are North America and Europe.
Ready-made garment made in the country are mainly divided into woven and knit products. Wovens are usually shirts, T-shirts and trousers, whereas knits from Bangladesh are mainly intimate wear, stockings, sweaters and casual wear.
Bangladesh's textile and apparel industry has been greatly benefited from quotas under Multi- Fibre Arrangement (MFA) in the North American market until 2005 and the preferential market access to the European Union. The apparel sector thereby grew phenomenally from US$3.5 million in 1981 to over US$10 billion per annum in recent years.
In the fiscal year ended June 30, 2009, Bangladeshi knitted and woven apparel exports reached US$12.35 billion, the government's Export Promotion Bureau said.
Industry observers believed that as a number of Asian textile and apparel factories closed down partly due to higher wages and costs, some buyers shifted orders to new global sourcing destinations. Bangladesh was one of the beneficiaries.
Looking ahead, Bangladesh has opportunities to boost apparel exports to the US and the EU countries where the demand for low cost apparel is increasing. However, it remains unsure how far the two major markets will improve their economies in 2010.
Public policy is also crucial to boost Bangladeshi apparel industry. The government policy of liberalization of the economy encouraged private sector investments. Low cost energy and natural gas provides Bangladesh's textile industry with a competitive advantage in producing labor-intensive goods. A large domestic market is also an advantage for the country's apparel industry.
Cheap and abundant labor forces have been an advantage for Bangladesh's apparel industry. Wage of the garment workers was last reviewed in 2006 to Tk 1662. With the rising living cost in these years and unrest among the workers during 2008 and 2009, a number of leading international buyers, including WalMart, H&M, Levis, Nike and Tesco, expressed concerns in early January over the issue of wages in the country. They wrote a letter to the country's Prime Minister for this matter. The wage issue, affecting over 4,000 factories and three million workers, was yet to be settled by the end of January.
Remark:
BGMEA: Bangladesh's Garment Manufacturers and Exporters Association
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