Assignment on Garments Sector in Bangladesh

8/13/2019 Assignment on Garments Sector in Bangladesh

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GARMENTS SECTOR IN BANGLADESH

Introduction

Globalization has hit the populations of the third world hard. Unemployment has risen asestablished industries have been destroyed and poverty has deepened. Yet theorganizations that clear the way for Foreign Direct Investment do have something to beproud of in Bangladesh the rapid e!pansion of the garments industry" which nowemploys appro!imately #.$ million people. %owever" for these wor&ers the 'oy of havinga 'ob is marred by the harsh conditions they endure in the wor&place.

Bangladeshbegan creating (!port )rocessing *ones +()*s, in #-/ to attract foreigncapital and earn e!port dollars. In #--0 the Bangladesh (!port )rocessing *one1uthority +B()*1, was set up and a blan&et ban on trade union activity imposed. 2his is

obviously the most attractive feature for investors" on top of ta! brea&s and otherincentives on offer. 2he ()*s now employ 3"333 wor&ers" mostly in the garment andshoe4ma&ing industries. 5ational labor laws do not apply in the ()*s" leaving B()*1 infull control over wor& conditions" wages and benefits.

%owever" B()*1 ignores not only national standards but its own. 2he guaranteedminimum monthly wages of 6U73" 6U7 83 and 6U7 9$ for s&illed" uns&illed andprobationary wor&ers respectively is a laughable fiction. 1s is the entitlement ofpermanent wor&ers to annual festival bonuses" medical coverage" and accommodationand transportation allowance. 2he body has consistently refused to give out lettersconfirming employment and does not hire any wor&ers on a permanent basis. In reality"

earnings average about 693 per month less than half the official rate and wor&ers doforced overtime under threat of dismissal. 2he withholding of pay for months at a time a practice common throughout the private sector is also the norm.

2he situation in the garment industry at large is even worse. 2he nation:s top e!portearner employs #.$ million wor&ers under conditions of super4e!ploitation. 2he ma'orityare young women from rural areas who have migrated to the urban centers in search ofwor&. 2he sweatshops are more li&e prisons than factories" with no fi!ed hours" regularbrea&s or days off. ;or&ers earn between 6 and 6#3 a month" for an average of #0 hoursa day" up to 9 days per month. 2his comes to an hourly rate of two or three cents< 2hebourgeois media reports that the industry currently owes 6 033"333 in bac& pay" a

staggering amount considering the miserly wages.

Garment wor&ers change 'obs fre=uently because of wage arrears" lay4offs" ill health orharassment from the bosses and their >security guards?. 1s the vast ma'ority ofemployees are girls and young women most living apart from their families there aremany cases of physical and se!ual harassments.
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Working #our!

;ee&ly hours. CCC

;ee&ly holiday. CC

ompensatory wee&ly holiday. CCC

Daily hours. CCC Intervals for rest or meals.C

7pread over. CCC

5ight shift. CCC

)rohibition of overlapping shift. CC

(!tra allowance for over time. CC

estriction on double employment.

Em&"o$ment o% $oung &er!on

)rohibition of employment of children. CCC

ertificate of fitness. CCC ;or&ing hours for children:s. CCC

egister of child wor&ers. CCC

)ower to re=uire medical e!amination. CCC

Leave and #o"ida$! it# age!

1nnual leave with wages. CCC

Festival holidays. C

asual leave and see& leave.C

Haternity leave. CCC ;ages during leave or holiday periods. CCC

)ayment in advance in certain case. CC

Mi!ce""aneou!

)enalties.

1ccident offences by wor&ers.

2hose are the specific criteria which are mention in the factories act #-@$. (ach andevery section of the law is not mentioned and describe here due to the shortage of space

and those are not sub'ect related. 2hose laws must be followed by the employer ofgarments wor&er.

Garment! indu!tr$ in Bang"ade!#

Bangladesh earns nearly 6 billion a year by e!porting te!tile products" mainly to (uropeand the United 7tates. 2his is about 3 percent of total e!port earnings of the country.2he HG industry has around 8"333 units across the country. It employs around 9.$


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million wor&ers" -3 percent of whom are poor women. ;henever the country is criticizedfor its high level of corruption and confrontational politics" its garment industry is held upas a success story.

For Bangladesh" the ready4made garment e!port industry has been the proverbial goose

that lays the golden eggs for over fifteen years now. 2he sector now dominates themodern economy in e!port earnings" secondary impact and employment generated. 2heevents in #--/ serve to highlight the vulnerability of this industry to both internal ande!ternal shoc&s on the demand and supply side. Given the dominance of the sector in theoverall modern economy of Bangladesh" this vulnerability should be a matter of someconcern to the policyma&ers in Bangladesh. 1lthough in gross terms the sector:scontributions to the country:s e!port earnings is around 8 percent" in net terms the sharewould be much less partially because the bac&ward lin&ages in te!tile have been slow todevelop. 2he dependence on a single sector" no matter how resilient or sturdy that sectoris" is a matter of policy concern. ;e believe the policyma&ers in Bangladesh shouldwor& to reduce this dependence by moving =uic&ly to develop the other e!port industries

using the lessons learned from the success of apparel e!ports. 7upport for the apparelsector should not be reduced. In fact" another way to reduce the vulnerability is todiversify the product and the mar&et mi!. It is heartening to observe that the &nitproducts are rapidly gaining share in overall garment e!ports as these products are sold i)reliminary data and informal evidence indicate that this sector seems to have weatheredthe devastating floods relatively well. 2he industry is one hundred percent e!port4oriented and therefore insulated from domestic demand shoc&s however" it remainsvulnerable to domestic supply shoc&s and the smooth functioning of the ban&ing"transportation and other forward and bac&ward lin&age sectors of the economy. 2heDha&a4hittagong road remains the main transportation lin& connecting the productionunits" mostly situated in and around Dha&a and the port in hittagong" where the raw

material and the finished products are shipped in and out. Despite increased dependenceon air transportation" truc&s remain the main vehicles for transporting raw materials andfinished products for Bangladesh garment e!ports. 2he floods disrupted the normal flow.

(ventually" this road lin& was completely severed for several days when large sections ofthe road went under water for a few wee&s during the latter phase of the floods. 2hisdelin&ing of the road connection between Dha&a and the port in hittagong was asserious a threat as one can imagine for the garment e!porters. 2he industry responded bycalling upon the Bangladesh navy to help with trawlers and renting a plane from 2hai 1irthat was used to directly fly garment consignments from the Dha&a airport to thehittagong airport.
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Li!t o% Bang"ade!# Garment Manu%acturer! and E'&orter!

() A*TE+ LIMITED

() AGAMI A,,ARELS LTD-

() AGAMI *ASHIONS LIMITED

() AGRANI SWEATERS LTD-

() AG.S A,,ARELS LTD

() AHMED *ASHIONS

() AHMEDIA GARMENTS /,TE0 LTD-

() AHSAN *ASHIONS LTD-

() AHSAN 1NITTING LTD-

() AIRTEES A,,ARELS LTD-

() A ONE DRESSMA1ERS LTD-

() A ,L2S IND2STRIES LTD-

() A-B- *ASHIO WEAR LTD-

() A-B- SIDDI32EE A,,ARELS LTD-

() A-B-C- ATTIRE LTD-

() A-B-M A,,ARELS LTD-

() A-B-M- *ASHIONS LTD-

() A-B-S- GARMENTS LTD-

() A-D- ENTER,RISE /GARMENTS DI4ISION0

() A-*-M- SWEATERS LTD-

() A-G- DRESSES LIMITED-


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() A-H- GARMENTS LTD-

() A-5- S2,ER GARMENTS LTD-

() A-1- 1HAN 6 CO- LTD- /GARMENTS DI40

() A-1-B- *ASHIONWEAR /,4T0 LTD-

() A-1-5- *ASHIONS *ABRICS LTD-

() A-1-M- 1NIT WEAR LTD-

() A-M- DESIGN LTD-

() A-M- SWEATERS LTD-

() A-M-C- GARMENTS LTD-

() A-M-1- A,,ARELS LTD-

() A-N- GARMENTS LTD

() A-N- SWEATERS LTD-

() A-3-M- A,,ARELS /,4T0 LTD-

() A-R- A,,ARELS LTD-

() A-R- *ASHIONS LTD-

() A-R- 1HAN SI7ING 6 *ABRICS LTD-

() A-R-A- GARMENTS 6 TE+TILES LTD-

() A-R-B- 1NIT WEAR LTD

() A-S *ASHION LTD-

Contri8ution! o% Garment! indu!tr$ in Bang"ade!#

Garments Industry occupies a uni=ue position in the Bangladesh economy. It is thelargest e!porting industry in Bangladesh" which e!perienced phenomenal growth duringlast two decades. By ta&ing advantage of an insulated mar&et under the provision ofHulti Fibre 1greement +HF1, of G122" it attained a high profile in terms of foreigne!change earnings" e!ports" industrialization and contribution to GD) within a short spanof time.2he industry plays a &ey role in employment generation and in the provision of


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Contri8ution o% t#e RMG Indu!tr$

HG business started in the late 3s as a negligible non4traditional sector with a narrow

e!port base and by the year #-/0 it emerged as a promising e!port earning sectorpresently it contributes around $ percent of the total e!port earnings. Ever the past oneand half decade" HG e!port earnings have increased by more than / times with ane!ceptional growth rate of #@.$ percent per annum. In FY3@" earnings reached about /billion U7D" which was only less than a billion U7D in FY-#. (!cepting FY39" theindustry registered significant positive growth throughout this period

In terms of GD)" HG:s contribution is highly remar&able it reaches #0 percent of GD)which was only about 0 percent in FY-#. 2his is a clear indication of the industry:s

contribution to the overall economy. It also plays a pivotal role to promote thedevelopment of other &ey sectors of the economy li&e ban&ing" insurance" shipping" hotel"tourism" road transportation" railway container services" etc.

1 #--- study found the industry supporting appro!imately U7D 9.3 billion worth ofeconomic activities +Bhattacharya and ahman," when the value of e!ports stood at alittle over U7D 8.3 billion.

Ene of the &ey advantages of the HG industry is its cheap labor force" which provides acompetitive edge over its competitors. 2he sector has created 'obs for about two millionpeople of which 3 percent are women who mostly come from rural areas. 2he sector

opened up employment opportunities for many more individuals through direct andindirect economic activities" which eventually helps the country:s social development"woman empowerment and poverty alleviation.

E'&orting Condition o% Garment! Indu!tr$

2he eady4Hade Garments +HG, industry occupies a uni=ue position in theBangladesh economy. It is the largest e!porting industry in Bangladesh" which


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e!perienced phenomenal growth during the last 93 years. By ta&ing advantage of aninsulated mar&et under the provision of Hulti Fibre 1greement +HF1, of G122" itattained a high profile in terms of foreign e!change earnings" e!ports" industrializationand contribution to GD) within a short span of time. 2he industry plays a &ey role inemployment generation and in the provision of income to the poor. 5early two million

wor&ers are directly and more than ten million inhabitants are indirectly associated withthe industry. Ever the past twenty years" the number of manufacturing units has grownfrom #/3 to over 0@33. 2he sector has also played a significant role in the socio4economic development of the country.

2he 1greement on 2e!tile and lothing +12, introduced in #--8" aimed at bringingte!tiles and clothing within the domain of ;2E rules by abolishing all =uotas by the endof 9338. It provides an ad'ustment period of #3 years" so that countries affected by theHF1 could ta&e the necessary steps to ad'ust to the new trading environment.iberalization of trade following the Uruguay ound agreement presents opportunitiesas well as challenges for a developing country li&e Bangladesh in HG sector. In the

)ost4Uruguay ound period" traditional instruments of trade policy such as tariffs"=uotas" and subsidies will become less feasible and less relevant. In a liberalized traderegime" competition among te!tiles and clothing e!porting countries is li&ely to becomeintense. 2he ob'ective of this paper is to identify the prospects of HG industry after theHF1 phase out by analyzing the current scenario along with different policy measuresand the available options in order to be more competitive in the new regime.

2he e!port made by Garments Industries of Bangladesh is improving year after yeare!cept some of the year. 7tri&e" layout" shutdown of company" political problem"economic problem" inflation etc. are the prime cause of decreasing e!port in thisimportant sector. But above it" eadymade Garments Industries is the leading sector in

e!port sector.

:ear E'&ort /in 2S ; mi""ion0 ,ercentage c#ange

#--# -9 @98.#@ 09.8-#--9 -0 /@@./9 0/.//#--0 -8 ##/9.$ [email protected]#--8 -$ #88$.39 99.#-#--$ -@ #$$$.- .@#--@ - 999/.0$ 80.8#-- -/ 9$8.#0 #8.###--/ -- 033#.9$ #./0#--- 33 0/#.-8 [email protected]#9333 3# 83#-.-/ @.9-933# 4 39 808-.8# /.#-9339 30 8/$-./0 ##.8

9330 38 8$/0.$ $.@/9338 3$ 8-#9.#9 .9#933$ 3@ $@/@.3- #$./0

*igure9Year (!port by the garments industries +in U7 6 million,

1verage Kuota )rices of 7elected Garments Items (!ported by Bangladesh" 933@


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)osition of Bangladesh is e!porting product in U71 is not very satisfactory but thissituation is better than any other condition of the previous time. But if our Governmentta&e some essential law and brea& out the wall of biasness then the position ofBangladesh in Garments sector would be hope to better.

*inding!

From the survey we have found some tremendous information that help to build ourpractical &nowledge about the garments industry of our country. 2hrough our survey wetry to bring out the present situation" problems and the prospects of these industries. Inthese aspects we divided our finding into three main parts. First part contains the generalinformation about the garments industries of our country and the other second and thirdpart contains the problems and the prospects of these industries se=uentially. 2hesetopics are discussed below4

ompany profile

;e ta&e information from five leading garments company to identify the problem of thissector. 7hort profile of the ompany are given below4

Mi""enium Garment! Limited

It is a manufacturing company" established in #--3. Hore than #933 employees foundtheir wor&ing place in this organization. Different types of modern e=uipment in here torun the production smoothly. 7uch as4 8$3 pcs of different type of cutting" sewing andfinishing machines supplied by mostly 7inger and Brother. Its main mar&et for e!portingis (uropean ountries" U71. 1nd the other customer groups are (&insa" 7pain esage"

UL (tam" 7ingapore etura" France 1mcobus" U.7.1 Hiles" Germany 7tar ;ear"U.7.1. It is one of the leading e!ports Garment ompany of our country.

RAHAN GARMENTS /,4T0 LTD

It was founded in #--0. ahan started manufacturing and e!porting from #--$.Hanufacturer and e!porter of all type of apparels" specialized in under garments"sportswear and &nit M woven garments. 2he total wor&ing area comprises of 9-"333s=uare feet in one floor. 2heir plant and office is located in the central part of the city.2his give security and convenience for the transportation of goods and all &inds ofsupports needed for daily production and financial facility.

TO1IO MODEL LIMITED

2he company was established in #--3 as a )ublic imited ompany. 2he companyauthorized capital was in U7 6 #9. Hillion. Its production capacity is 9-"333 DozAHonth 1ppro!. Even M Lnitwear Items. Hore than $3 employees participate here in themanufacturing activities. It is another leading Garment ompany of our country.


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Fabrics M ommodities (!change td:s a well reputed Garments (!porters inBangladesh. 1ccordingly as a first step of their customer familiarization process" theywould li&e to brief with their business process and how this could be of any interest totheir organization. Based in Dha&a" Bangladesh they manufacture over 933"333 units amonth including Lnit" ;oven and 7weater. 1 highly =ualified team of K1 foresees the

manufacturing process. eliability and cost effectiveness are on the utmost priority whilewe provide value added services to our vast growing client list.

ALAM *IBER IM,E+ LIMITED

1lam Fiber Impe! is one of the leading (!porter and Hanufacturer:s agents inBangladesh. It was established in #-//. It basically wor&s with the product of41;NU2( +NU2( FIB(, NU2( Y15 A NU2( 2;I5(NU2( E2% +%(77I15 AB, NU2( B1G A NU2( 71L7 %15DI1F27 (1DY4H1D( G1H(527.2hey demand they offer reasonable price for their products. 2here stay some motto withwhich 1lam Fiber Impe! willing to run4 ;e maintain =uality properly" we never

compromise with =uality" 2imely shipment is our business ethics" and ustomer:ssatisfaction is our motto.

,ro8"em! Regarding Wit# RMG

2he garment industry of Bangladesh has been the &ey e!port division and a main sourceof foreign e!change for the last 9$ years. 5ational labor laws do not apply in the ()*s"leaving B()*1 in full control over wor& conditions" wages and benefits. Garmentfactories in Bangladesh provide employment to 83 percent of industrial wor&ers. Butwithout the proper laws the wor&er are demanding their various wants and as a resultconflict is began with the industry.

ow wor&ing salary is another vital fact which ma&es the labor conflict. ;or&er madestri&e" layout to capture their demand. 7ome time bonus and the overtime salary are theimportant cause of crisis. Insufficient government policy about this sector is a greatproblem in Garments ompany.

2here are some other problems which are associated with this sector. 2hose are4 lac& ofmar&eting tactics" absence of easily on4hand middle management" a small number ofmanufacturing methods" lac& of training organizations for industrial wor&ers" supervisorsand managers" autocratic approach of nearly all the investors" fewer process units forte!tiles and garments" sluggish bac&ward or forward blending procedure" incompetent

ports" entryAe!it complicated and loadingAunloading ta&es much time" time4consumingcustom clearance etc.


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Sa%et$ ,ro8"em!

7afety need for the wor&er is mandatory to maintain in all the organization. But withoutthe facility of this necessary product a lot of accident is occur incurred every year in mostof the company. 7ome important cause of the accident are given below4

Ooutes are bloc&ed by storage materials

O Hachine layout is often staggered

O ac& of signage for escape route

O 5o provision for emergency lighting

O Doors" opening along escape routes" are not fire resistant.

O Doors are not self4closing and often do not open along the direction of escape.

O 1de=uate doors as well as ade=uate staircases are not provided to aid =uic& e!it

O Fire e!it or emergency staircase lac&s proper maintenance

O ac& of proper e!it route to reach the place of safety

O )ar&ed vehicles" goods and rubbish on the outside of the building obstruct e!its tothe open air


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O Fire in a Bangladesh factory is li&ely to spread =uic&ly because the principle ofcompartmentalization is practiced

O ac& of awareness among the wor&ers and the owners

But now the situation is much improved and we found" all the surveyed garments arefulfilling the re=uirement of emergency e!it. It is provided in all the cases" signage ispresent and fire fighting e=uipments are up to date" a departure from the past. (ven firedrill is held once in a month.

Savar Traged$

En 98th of 1pril" a nine storied building collapsed in 7avar" in the outs&irts ofBangladesh capital Dha&a" where thousands of wor&ers were either &illed or trapped. 1long and difficult rescue operation has been going on ever since and more than 9/08wor&ers have been rescued alive so far from the rubbles. 2he death toll has risen to 0-

on ;ednesday +Hay #" 93#0, and thousands of in'ured have been hospitalized.1uthorities claim that #8- persons are still missing in the country:s worst ever industrialdisaster.

Bang"ade!# *ace! t#e C#a""enge o% G"o8a"i


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endowment" characterized by e!treme land scarcity and a very high population density"ma&ing economic growth dependent on the e!port of labor4intensive manufactures.

In the wa&e of the 933# global recession" Bangladesh:s reliance on foreign countries as amar&et for e!ports and as a source of remittances has become obvious. If Bangladesh is

to become less vulnerable to the economic fortunes of others" it will need to strengthen itsdomestic economy" creating 'obs and mar&ets at home. 1 strong domestic sector and animproved overall investment environment will provide a more stable source of income li&e what the garment industry has provided so far and will re&indle and sustainBangladesh:s economic growth.

,ro!&ect! o% t#e RMG Indu!tr$

Despite many difficulties faced by the HG industry over the past years" it continued toshow its robust performance and competitive strength. 2he resilience and bold trend inthis HF1 phase4out period partly reflects the imposition of Psafeguard =uotas: by U7 and

similar restrictions by (U administration on hina up to 933/" which has been the largestsupplier of te!tiles and apparel to U71. Ether factors li&e price competitiveness"enhanced G7) facility" mar&et and product diversification" cheap labor" increasedbac&ward integration" high level of investment" and government support are among the&ey factors that helped the country to continue the momentum in e!port earnings in theapparel sector. 7ome of these elements are reviewed below.

Market Diver!i%ication

Bangladeshi HG products are mainly destined to the U7 and (U. Bac& in #--@4-"Bangladesh was the th and $th largest apparel e!porter to the U71 and (uropean Union

respectively. 2he industry was successful in e!ploring the opportunities in mar&ets awayfrom (U and U7. In FY3" a successful turnaround was observed in e!ports to thirdcountries" which having a negative growth in FY3@ rose three4fold in FY3" whichhelped to record 90.# percent overall e!port growth in the HG sector. It is anticipatedthat the trend of mar&et diversification will continue and this will help to maintain thegrowth momentum of e!port earnings. 1t the same time a recent ;2E review points outthat Bangladesh has not been able to e!ploit fully the duty free access to (U that iten'oys. ;hile this is pointed out to be due to stringent rules of origin +EE, criteria" therelative stagnation in e!ports to (U re=uires further analysis.

,roduct Diver!i%ication

2he growth pattern of HG e!ports can be categorized into two distinct phases. Duringthe initial phase it was the woven category" which contributed the most. 7econd phase isthe emergence of &nitwear products that powered the recent double digit +year4on4year,growth starting in FY38. In the globalized economy and ever4changing fashion world"product diversification is the &ey to continuous business success. 7tarting with a fewitems" the entrepreneurs of the HG sector have also been able to diversify the productbase ranging from ordinary shirts" 24shirts" trousers" shorts" pa'amas" ladies and


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children:s wear to sophisticated high value items li&e =uality suits" branded 'eans" 'ac&ets"sweaters" embroidered wear etc. It is clear that value addition accrues mostly in thedesigner items" and the sooner local entrepreneurs can catch on to this trend the brighterbe the HG future.

Backard Integration

HG industry in Bangladesh has already proved itself to be a resilient industry and canbe a catalyst for further industrialization in the country. %owever" this vital industry stilldepends heavily on imported fabrics. 1fter the liberalization of the =uota regime some ofthe ma'or te!tile suppliers 2hailand" India" hina" %ong Long" Indonesia and 2aiwanincreased their own HG e!ports.

If Bangladesh wants to en'oy increased mar&et access created by the global open mar&eteconomy it has no alternative but to produce te!tile items competitively at home throughthe establishment of bac&ward lin&age with the HG industry. 2o some e!tent the

industry has foreseen the need and has embar&ed on its own capacity building.

*"o o% Inve!tment

It is plausible that domestic entrepreneurs alone may not be able to develop the te!tileindustry by establishing modern mills with ade=uate capacity to meet the growing HGdemand. It is important to have significant flow of investment both in terms of financeand technology. Figure 0 indicates that the investment outloo& in this sector isencouraging" although the uncertainties before the HF1 phase4out period caused asluggish investment scenario. In part the momentum in the post4HF1 phase4out period isindicative of the efforts underway towards capacity building through bac&ward

integration. 2his is evident in the pace of lending to the HG sector and in the risingimport share of HG related machinery. %owever further progress would be necessary toimprove and sustain competitiveness on a global scale.

,o"ic$ Regime o% Government

Government of Bangladesh has played an active role in designing policy support to theHG sector that includes bac&4to4bac& A" bonded warehouse" cash incentives" e!portcredit guarantee scheme" ta! holiday and related facilities. 1t present governmentoperates a cash compensation scheme through which domestic suppliers to e!port4oriented HG units receive a cash payment e=uivalent to $ percent of the net FEB value

of e!ported garments. 1t the same time" income ta! rate for te!tile manufacturers werereduced to #$ percent from its earlier level for the period up to Nune 03" 933/. 2hereduced ta! rates and other facilities are li&ely to have a positive impact on the HGsector.


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In%ra!tructura" Im&ediment!

2he e!istence of sound infrastructural facilities is a prere=uisite for economicdevelopment. In Bangladesh" continuing growth of the HG sector is dependent on thedevelopment of a strong bac&ward lin&age in order to reduce the lead time. %owever"

other factors constraining competitiveness of Bangladesh:s HG e!ports included theabsence of ade=uate physical infrastructure and utilities.

La8or ,roductivit$

2he productive efficiency of labor is more important determinant for gaining comparativeadvantage than the physical abundance of labor. In Bangladesh" the garment wor&ers aremostly women with little education and training. 2he employment of an uneven numberof uns&illed labors by the garment factories results in low productivity and comparativelymore e!pensive apparels. Bangladesh labor productivity is &nown to be lower when itcompared with of 7ri an&a" 7outh Lorea and %ong Long. Bangladesh must loo& for

ways to improve the productivity of its labor force if it wants to compete regionally if notglobally. Because of cheap labor if our country ma&es the labor productivity in the ape!position" then we thin& the future of this sector is highly optimistic.

Re!earc# and Training

2he country has no dedicated research institute related to the apparel sector. HG ishighly fashion oriented and constant mar&et research is necessary to become successful inthe business. BGH(1 has already established an institute which offers bachelor:s degreein fashion designing and BLH(1 is planning on setting up a research and traininginstitute. 2hese and related initiatives need encouragement possibly intermediated by

donor4assisted technology and &nowledge transfer. 1 facilitating public sector role can bevery relevant here.

Su&&ortive Government ,o"ic$

In contrast to the public sector4led import4substituting industrialization strategy pursuedduring the first few years after independence" the industrialization philosophy of thegovernment changed rather dramatically from the late #-3s when the emphasis was one!port4oriented growth to be spearheaded by the private sector. 2owards this end" variouspolicy reforms were implemented in the #-/3s and #--3s. 7ome of these reformedpolicies contributed considerably to the growth of the HG industry in Bangladesh.

During the #-/3s" a number of incentives were introduced to encourage e!port activities.7ome of them were new li&e the Bonded ;arehouse Facility +B;F," while others li&ethe (!port )erformance icense +Q), 7cheme

0 were already in operation and were improved upon. 1lso" rebates were given onimport duties and indirect ta!es" there were ta! reductions on e!port income" and e!portfinancing was arranged. Under the Q) scheme" e!porters of non4traditional products


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received import licenses for specific products over and above their normal percentageallotment based on the f.o.b. value of their e!ports. Under the Duty Drawbac& 7ystem"e!porters of manufactured goods were entitled to get refund of duties and ta!es paid onimported inputs used in e!port production" and also all e!cise duties paid on e!portedfinished goods. For certain fast4moving items such as HG" a notional system of duty

payments was adopted in #-/94/0. Under this system" e!porters were e!empted frompaying duties and ta!es on imports used in e!port production at the time of importation"but were re=uired to &eep records of raw and 9#pac&aging materials imported. 2heduties and ta!es payable on the imports were &ept in a suspense account. iabilities topay the amounts in suspense were removed on proof of e!ports.

2he discussion in this section clearly points to the positive contribution made by policyreforms to the growth of the HG industry in Bangladesh. In particular" two policies the7B; facility and the bac&4to4bac& A system4 led to significant reduction in cost ofproducing garments and enhanced competitiveness of Bangladesh:s garments e!ports. Italso allowed garment manufacturers to earn more profit which" when necessary" could be

used to overcome difficulties arising from wea& governance. Furthermore" poorgovernance" reflected in the lea&age of duty4free imported fabrics in the domestic mar&et"parado!ically enough also helped the garment manufacturers to earn e!tra Pprofit: andthereby enabled them to absorb the Phigh cost of doing businesses a fall out of badgovernance.

Recommendation

Bangladesh economy at present is more globally integrated than at any time in the past.2he HF1 phase4out will lead to more efficient global realignments of the Garments andlothing industry. 2he phase out was e!pected to have negative impact on the economy

of Bangladesh. ecent data reveals that Bangladesh absorbed the shoc& successfully andindeed HG e!ports grew significantly both in FY3@ and +especially, in FY3. Due to anumber of steps ta&en by the industry" Bangladesh still remains competitive in HGe!ports even in this post phase4out period.

Eur Garments Industries can improve their position in the world map by reducing theoverall problems. 7uch as management labor conflict" proper management policy"efficiency of the manager" maintainable time schedule for the product" proper strategicplan etc.

Government also have some responsibility to improve the situation by providing4 proper

policy to protect the garments industries" solve the license problem" =uic&ly loadingfacility in the port" providing proper environment for the wor&" &eep the industry freefrom all &ind of political problem and the biasness. redit must be provided when theindustry fall in need.

2o be an upper position holder in the world Garments 7ector there is no way e!ceptfollow the above recommendations. ;e hope by maintaining proper management andpolicy strategies our country will ta&e the ape! position in future.


19/19

Sugge!tion! Regarding *ire Sa%et$

;e need to remember that when there is a fire" the first thing one should do is to run

away from it. 1nd this is what everyone does in such a situation. But the situationbecome dangerous and tragic when the escape doorways and gates are found loc&ed.)recautionary should need to be adopted are given belowR

O Building should be constructed with fire resisting materials O 1de=uate e!its and proper escape routes should be designed O )rotection against fire and smo&e should be ensured O (lectrical wiring must be properly designed" installed and maintained O (scape routes should be lighted at all times" &ept clear" be indicated by

signs

O egular fire drills should be held O Doors should be protected and should open along the direction of escape O Doors should not open on the steps and sufficient space should be provided. O 7mo&eAFire alarm systems must be installed O ade=uate number of e!tinguishers should be provided O )rior relationship with local Fire services should be established

Conc"u!ion

2he eady4Hade Garments +HG, industry occupies a uni=ue position in theBangladesh economy. It is the largest e!porting industry in Bangladesh" which

e!perienced phenomenal growth during the last 9$ years. By ta&ing advantage of aninsulated mar&et under the provision of Hulti Fibre 1greement +HF1, of G122" itattained a high profile in terms of foreign e!change earnings" e!ports" industrializationand contribution to GD) within a short span of time. 2he industry plays a &ey role inemployment generation and in the provision of income to the poor. 2o remaincompetitive in the post4HF1 phase" Bangladesh needs to remove all the structuralimpediments in the transportation facilities" telecommunication networ&" and powersupply" management of seaport" utility services and in the law and order situation. 2hegovernment and the HG sector would have to 'ointly wor& together to maintaincompetitiveness in the global HG mar&et. Given the remar&able entrepreneurialinitiatives and the dedication of its wor&force" Bangladesh can loo& forward to advancing

its share of the global HG mar&et.

THE END

Assignment on Garments Sector in Bangladesh

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Transcript of Assignment on Garments Sector in Bangladesh