Topic: BusinessAccounting

Last updated: October 12, 2019

Bangladesh University of ProfessionalsExcellence Through KnowledgeCourse Name: MacroeconomicsCourse No: BUS 3508CONTRIBUTION OF RMG SECTOR TO THE ECONOMY OF BANGLADESHSubmitted To:Dr. Talukder Golam RabbyAssistant ProfessorSubmitted BySyeda Nawshin Huq16231063Date of Submission: 2nd May,2018Table of ContentsCover Page1Table of Contents2Chapter 1: Introduction………………………………………………………..3Motivation of the studyBackground of the studyProblem of the studyChapter 2: Literature Review………………………………………………….3Chapter 3: Research Methodology…………………………………………..

73.1.Data collection3.2. Limitation of the research methodology Chapter 4: Finding of the Study……………………………………………..

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7 4.1. Introduction to the RMG sector 4.2. Contribution to the GDP 4.3. Export Earnings 4.

4. Government Support Chapter 5: Discussion………………………………………………………13 5.1. Current Scenario 5.

2. Challenges 5.3. OpportunitiesChapter 6: Conclusion and Recommendations…………………………19 6.1 .

Recommendations 6.2. ConclusionReferences……………………………………………………………………..22Chapter 1: Introduction1.1 Motivation of the studyThe study has been conducted in order to look at contribution of rmg sector to the economy of Bangladesh.This also focuses on the challenges and opportiunities of this sector. 1.

2 Background of the StudyTo learn and undergo a research about the RMG sector of Bangladesh is the main purpose of the study.This study may also be used as future reference. I looked into the export dollars for a few years and focused why its not where it should be and how can we take it there.

RMG sector is contributing more than 80% of the total export of the country since 2013. And even before that, it contributed a significant amount to the total exports.1.3 Problem of the study Though the rmg sector of Bangladesh is contributing a lot to our GDP and our economy it is not as much as its potential.

I wanted to see why its not where it should be and how can we take it there.Chapter 2 : Literature Review1. Prospects and Problems of RMG Industry: A study on Bangladesh Md. Masud Chowdhury, Lecturer, Department of Finance and Banking, Razu Ahmed ,. Assistant Professor, Department of Accounting and Information Systems, Jatiya Kabi Kazi Nazrul Islam University, Masuma Yasmin Lecturer, School of Business, Central Woman’s University The development of Garments Industry is considered as the priority area in the development policy in many countries, especially in Bangladesh. The young entrepreneurs are engaged in varied form of small and medium scale garments industry which comprises of products like shorts, trousers, shirts, sweaters, blouses, skirts, teashirts, jackets, sports attire and many more casual and fashion items with the changing times.

This study is conducted to analyze the prospects, problems and solution of problems of Readymade Garments Industry in Bangladesh. The findings of this paper show that Bangladesh has a great opportunity to earn a great foreign currency through developing readymade garments industry. The study also suggests some measure for the removal of ongoing crisis of garment sectors.

Keywords: Readymade garments, History, Trend, Infrastructural development.2. Ready-Made Garments Sector of Bangladesh: Its Contribution and Challenges towards Development* M. Saiful IslamMd. Abdur Rakib ATM Adnan The ready-made garments (RMG) sector of Bangladesh has got a greater facet than any other sector in terms of growth and foreign exchange earnings. It makes a significant contribution to the national economy by creating generous employment opportunities and reducing poverty through socioeconomic development.

Despite unquestionable success story, this sector has got a number of formidable challenges for the future growth. The present study has made a search on different dimensions of contribution and challenges of RMG industry in Bangladesh. To accomplish the task, a descriptive research based on study of available records is conducted. The study reveals that since its inception, especially during the last three decades, the RMG industry contributed significantly through creation of physical infrastructure which is demonstrated by 4222 RMG units along with the development of human capital as around 4 million workforce are directly involved in this industry. It has also contributed tremendously through empowering women as almost 90 percent of its labor force is female which ranked the highest in South-East Asia. In terms of core economic consideration RMG holds almost 14.07 percent of the GDP of Bangladesh as well as the 81 percent of the total export earnings.

The study however, identifies some challenges towards its future development including unskilled workers, improper infrastructure, energy crisis, bank loan and high rate of interest, high tax rate, intricate social compliance, political crisis, lack of market and product diversification, compliance pressure of accord and alliance and lack of integration. Therefore, collaborative and coordinated steps from both public and private sectors need to be initiated to overcome these challenges.3.Overall Problems and Prospects of Bangladeshi Ready-Made Garments Industries.Md. Joynal Abdin,DCCI Business Institute (DBI)January 1, 2008Bangladeshi Garment Industry is the largest industrial sector of the country. Though the history of Readymade Garment Industry is not older one but Bangladeshi clothing business has a golden history. Probably it started from the Mughal age in the Indian subcontinent through Dhakai Musline.

It had global reputation as well as demandable market around the globe especially in the European market. After industrial revolution in the west they were busy with technological advancement ; started outsourcing of ready made garments to meet up their daily demands. Many LDC’s took that chance & started ready made garment export at that markets. As an LDC Bangladesh took this chance enjoyed quota & other facilities of them.

Thus ready made garment industry started to contribute in our economy from late eighties (1977). The history of the garment industry dates back to 1977 when the first consignment was exported to then West Germany by Jewel Garments. The number of units, however, remained a meager 46 until the end of 1983. From a humble beginning the sector has thus made phenomenal growth over the last two decades, the number of units growing to around 4500. The RMG industry achievement is noteworthy, particularly for a country plagued with poor resource endowments and adverse conditions for industrialization. Exports increased from approximately 32 million US dollars in 1983/84 to 1.4 billion dollars in 1992/93. In 1987/88, the RMG export share surpassed that of raw jute and allied products.

The figure further rose to 5.7 billion dollars in 2003/04, representing a contribution of about 75 percent of the country’s total export earnings in that year. The employment generated by the sector is estimated to be around 1.5 million workers. Several factors account for the outstanding successes of the RMG industry in Bangladesh.

At the same time this industry had faced ; till facing many problems also. These problems ; prospects of RMG industry in Bangladesh is my topic to find out as well as to make critical analysis on these. The importance of my study has been raised up by recent labor unrest in RMG sector.4. The Prospect of the Readymade Garments Sector in Bangladesh: Result from Trend AnalysisAfroza Ahammed Shimu, Md. Shahidul IslamIn Bangladesh readymade garments (RMG) sector, the backbone of the national economy is not the major sources of foreign revenue but a significant role player of the socio-economic development by creating employment opportunities, empowering women and alleviating poverty. In this regard, this paper tries to understand and analyze current situation and structure of the   both knitted and woven sectors.  After then, this paper predicts the future of both the export and export growth for the next five years.

In this study, data on the export and export growth had been collected from the BGMEA. Then the Least Square Method as a trend analysis had been applied to identify forecast export trend and the export growth trend of the both knitwear and woven sector separately. Microsoft excel program had been used for the estimation of the trend analysis alongside with providing predictions for the next five years.The study found that the trend of both knitwear and woven export was upward. But the study also explored the downward trend of those two knitwear and woven sectors in terms of the growth rate.

Moreover, the study showed that after the phasing out of MFA within 2004 and the withdrawal of quota protection, the knitwear export did not face any impediments accorded by the projection.5.Problems and Prospect of Garments Industry in BangladeshBy Abu ZafourPublished 8 October 2009 Bangladesh StudyThe  phase-out  of  the  quota  is  likely  to  have  particular significance  for  the export of Bangladesh apparels  to  the US market. MFA’s  impacts  are  not much  related  to  a  question  of  our  $2  billion exports  to  the  USA;  or  the  $5  billion  worth  of  exports  made  by Bangladesh  globally.  Rather, it is a question of how Bangladesh’s entire economy will be affected by the issue of quota phase out.

RMG exports  constitute  about  75%  of  Bangladesh’s  annual  export  and provide  direct  employment  to  1.5  million  females  and  indirectly  an additional 8 to 10 million people. The global clothing trade is evolving on a continuous basis and that the phase out of quota restrictions and forming of trade blocs has become a reality.

Moreover Bangladesh is convulsed by fierce class struggles, centered on the country’s garment industry.  Many  tens  of  thousands  of  workers have  gone  on  strike,  blocked  roads,  attacked  factories  and  other buildings,  demonstrated,  fought  the  police  and  rioted  in  the  streets. Every  day  comes  news  of  fresh  strikes  in  a  variety  of  industries —mainly  the  ready-made garment (RMG) sector, but also mill workers, river  transport  workers,  rail  workers,  journalists,  lecturers  and teachers.  The  revolt  began  on  20  May2006  with  garment  workers’ strikes  in  the  Bangladeshi  capital  Dhaka  —  beginning  in  a  small number of factories over issues including the arrest of worker activists and  non-payment  of  wages.  By  23 May2006  this  struggle  had  been generalized,  with  action  at  a  much  larger  number  of  factories  and demonstrations  across  the  city. A massive  army  and  police  presence around  garment  factories,  in  some  cases  completely  blockading  and creating check points for entry to Export Processing Zones, temporarily calmed  things;  but  strikes  continued  to  take  place  at  numerous factories,  leading  to  solidarity  strikes  from  nearby  workplaces  and semi-spontaneous demonstrations. Chapter 3 : Methodology3.

1.Data collectionThe methods applied for the study has been kept simple and easy. The data has been collected from the secondary sources and mostly from the official web portal of BGMEA.

3.2 Limitations of the StudyThere are some limitations to this study and the most significant one is the unavailability of data. Because of the unavailability of data of Production output and Labor hours employed, we had to make some assumptions to calculate the labor productivity later provided in the paper. The less amount of time and lack of primary data also played an important role in the limitations of the study.

Most of the data collected are from the BGMEA web portal and thus, if the data has been manipulated there, the errors will be there accordingly. Other than that, the study has been taken care of while preparing.Chapter 4 : Findings of the study 4.1 Introduction to the RMG sectorThe readymade garments industry acts as a catalyst for the development of Bangladesh.

The “Made in Bangladesh” tag has also brought glory for the country, making it a prestigious brand across the globe. Bangladesh, which was once termed by cynics a “bottomless basket” has now become a “basket full of wonders.” The country with its limited resources has been maintaining 6% annual average GDP growth rate and has brought about remarkable social and human development.When our only major export earner “the jute industry” started losing its golden days, it is the RMG sector that replaced it, and then, to overtake it. The apparel industry of Bangladesh started its journey in the 1980s and has come to the position it is in today.After the independence in 1971, Bangladesh was one of poorest countries in the world.

No major industries were developed in Bangladesh, when it was known as East Pakistan, due to discriminatory attitude and policies of the government of the then West Pakistan. So, rebuilding the war-ravaged country with limited resources appeared to be the biggest challenge.The industry that has been making crucial contribution to rebuilding the country and its economy is none other than the readymade garment (RMG) industry which is now the single biggest export earner for Bangladesh. The sector accounts for 81% of total export earnings of the country.

The industry is making strides in terms of environmental compliance to have a sustainable footing in the global apparel market. Many RMG factories at their own are adopting green technologies and practices. They are using cleaner technologies and producing garments in a caring and responsible way that preserves the environment for future generations. Already a number of RMG factories achieved LEED certification from US Green Building Council (USGBC) for their green practices.

In the year 2016 Bangladesh textile & clothing industry has faced many challenges, including worker unrest, gas crisis etc. and of course positives were many as it could continue  to contribute to the country economy and global trade very significant. The purpose of the report is to give a brief view to the readers about 2016’s overall scenario of Bangladesh RMG industry.

4.2 Contribution to the GDP:according to the IMF, Bangladesh’s financial system is the second one quickest developing main financial system of 2016 (Dec), with 7.11 percentage Gross home Product (GDP) increase fee in which the growth fee was 6.12 percent in 2015.

Contribution of industry to the GDP was 28.1%, where RMG zone donate the biggest part. since 2004, Bangladesh averaged a GDP increase of 6.five%, which has been importantly pushed via its exports of readymade garments.4.3 Export Earnings:The total export of the past years is given here:YEAR EXPORT OF RMG (IN MILLION US$) TOTAL EXPORT OF BANGLADESH (IN MILLION US$)  % OF RMG’S TO TOTAL EXPORT 2007-08 10699.8 14110.8 75.

83 2008-09 12347.77 15565.19 79.33 2009-10 12496.72 16204.65 77.12 2010-11 17914.

46 22924.38 78.15 2011-12 19089.

73 24301.9 78.55 2012-13 21515.73 27027.36 79.61 2013-14 24491.88 30186.

62 81.13 2014-15 25491.4 31208.94 81.68 2015-16 28094.16 34257.

18 82.01 2016-17 28149.84 34655.

92 81.23 As we can see from the above table, that more the RMG sector is contributing more than 80% of the total export of the country since 2013. And even before that, it contributed a significant amount to the total exports.Table 1: value of total apparel export- calendar year basis. (Source- BGMEA)Year USD (million) YonY Growth (%)2007 9350.

33  4.672008 11878.92 27.042009 11890.49 0.102010 14854.

6 24.932011 19214.47 29.352012 19788.14 2.

992013 23500.98 18.762014 24583.

96 4.612015 26602.7 8.

212016 28668.29 7.76Bangladesh garment industry has generated $28.

67bn exports in the calendar year 2016 which is 7.76% higher than the previous calendar year. The export in the last fiscal year 2015-16 was $28.

09bn with a 10.21% growth from the previous fiscal year, according to Export Promotion Bureau data. Of the total figure of 2016 export, the knitwear constituted $13.74bn and woven products $14.93bn.Table one shows that Bangla Desh RMG are securing a standardized growth through the last decade. From 2007 to 2016 average yearly growth was twelve.84% that shows sturdy potential of the arena.

 the information additionally shows that growth has been delayed through last 5 years that was eight.47 % average. And this was even greatly contributed by the spectacular growth of the year 2013. As Bangla Desh RMG is moving towards achieving a target of reaching USD fifty billion by 2021 the country needs a lot ofgrowth than it’s been obtaining for last 3 years specially. 2017 is to be a really crucial year in this path. If the country will secure a growth around of V-day during this year, it should proceed well achieving the goal.

4.4 Government Support :15% cash subsidy of the fabric cost . Establishment of new textile/RMG mill in the private sector Joint ventures with the existing textile/RMG mill Public sector textile mills that are being privatized Indirect investment through financial services and/or leasing Introducing back to back LC Warehouse facilitiesChapter 5 : Discussion5.1 Current Scenario:Bangladesh is one in all the leading ready-made-garments exporters within the world. a lot of exactly, recently, Asian nation has confiscate Bharat to become the second largest garment bourgeois once China.

There has been a lot of whisper occurring UN agency is that the next to require over China because the biggest attire export powerhouse. it’s tasking for Asian nation to require over China in spite of our low cost labour, four decades of ability and knowledge, and shifting of Chinese work orders to different countries. China contains a large hands of over ten million operating in attire sector, naturally, thanks to its hugepopulation of one.39 billion emerged with biggest capability for the assembly of textiles and ready-made-garments China realitySheet, 2014. the world consumption of attire product in 2015 was US$445 billion of that China because the biggest contributes for thirty-nine.

26% and Asian nation as next contributes for five.90% WTO, 2016. That means, Asian nation is manufacturing butone sixth of the worth of the attire made by China.Contrary to China’s expertise in attire export from the traditional days Asian nation has solely but forty years of expertise. throughout this short span of your time Asian nation has surpassed not solely the North American country and European countries however additionally North American country, India, Pakistan, Sri Lanka, Indonesia, etc. UN agency has long history of creating ready-made-garments. With China’s transition from vesture to different industries and Bangladesh’s consistent growth, it’sevident that with correct designing Asian nation would take over the leadership role some day in close to future.

 within the next a part of this text we’ll discuss concerning the opportunities ahead of Asian nation to require over that leadership role and at a similar time the challenges that will impair even today’s position as being the ordinal to the leader China.5.2 Challenges:Worker Unrest- No wage or delayed wage is one amongst the foremost necessary reasons for employee unrest. They alleged that ‘Jhut’ commercialism and different native political problems ar the foundation explanation for unrests. however all the manufactory homeowners, workers, leaders, and trade specialists recommend that issues may be solved by mutual affectionand not by movement down the manufactory.Infrastructure- full roads, interior transportation and inadequate port facilities ar single biggest issue hampering operational execution Mckinsey’s, 2015.

As mentioned within the prospect half Government must unceasingly work on development, maintenance, and up gradation of the infrastructure. this can be the lifeline for each foreign material and export covering. intervaland productivity ar 2 most significant aspects in fashion. None of those might be improved while not rising the infrastructure.Compliance- Bangladesh has with success enforced social compliance however still an extended thanks to get in terms of activity health and safety demand Mckinsey’s, 2015. Accord and Alliance ar functioning on these problems so so much they already inspected 3859 clothes factories.

 this can be a giant step towards claiming our industries safe for the retailers WHO arunrelentingly attempting to prove that their product don’t seem to be from sweatshops. Textile nowadays (2016) reportable that textile industries in Bangladesh ar alleged with variety of environmental problems as well as direct discharge, not mistreatmentatmosphere friendly dyes and chemicals, not mistreatment the effluent treatment as a result of the shortage of National Effluent and Quality Standards (NEQS).Supplier performance and force supply- employee wages can invariably increase however at identical time the trade must find out how to optimize production, improve ability, increase capability, and reduce the capability gap Mckinsey’s, 2015. Currently, the productivity of Bangladeshi staff is far not up to the productivity of the neighboring countries.

At identical time Bangladeshshould begin moving from creating mid-level product to worth intercalary product. the govt. should conjointly establish a lot of TAV (Technical and Vocational) Institute so as to confirm offer of mean staff for brand new factories growing at a rate of 6-9% every year. while not these it’ll be not possible to mitigate the growing employee salaries.

Raw material- Bangladesh doesn’t turn out raw cotton that is that the main material for the industry Mckinsey’s, 2015. till it’sself-sufficing on its own cotton the spinners should pre-book the cotton fields so as to secure the material for its production. Even Bangladesh doesn’t have the specified industries for dyes, chemicals, plastic, artificial fibers, printing materials, etc. The factories should procure their raw materials from certified and sure corporations in compliance with the U.S.A. and EU normal.

Political stability- this can be one amongst the foremost unsure sort of downside that happens out of the blue and devastates the RMG trade till stabilised Mckinsey’s, 2015. It comes within the sort of security threats, political unrest and strikes, corruption, and issue in doing the business. Bangladesh may be a democratic country with 2 major political parties. it’s the characteristic of everyparty once con to travel for movement to urge down the ruling party from power. These movements ar principally aggressive among blockades, transportation strikes, port close up and on the opposite hand restrictive by the ruling party to maneuver things orderly.

 tho’ the ranking in Transparency International has improved however there’s very little improvement in corruption index.Banking and money system- thanks to high rate of interest finance value will increase that cause a severe impact on production. The income tax of 1 Chronicles conjointly effects the assembly badly.

The high value of doing business is as a result of intensive increase within the rate of interest that has hyperbolic the issues of the trade. Provisions like presentation of zero.5% minimum tax on domestic sales, income tax on import of textile and articles etc.

, ar catastrophe. Bangladesh in 2010 were at a mean of thirteen consistent with IMF whereas China get at but 0.5, for the 5.4%, average disposal rate of interest.Threats from the competitors- Bangladesh still retains the popular position for attire sourcing, however is closely followed by Vietnam, India, and Myanmar.

 sub-Saharan countries like Federal Democratic Republic of Ethiopia relish variety of bene?ts through discriminatory trade agreements (GSP to USA and EU), low cost labor (lower than Bangladesh), surplus electricity, low cost land value, discriminatory investment terms, and proximity to the EU and also the U.S.A.

 Dhaka apse, 2016. Chinese, Korean, Indian entrepreneurs have heavily invested with in Myanmar The News nowadays, 2016. Federal Democratic Republic of Ethiopia and African nation ar among high of the list of sub-Saharan countries can relish most energetic work-age population in next 20years Mckinsey, 2015.Energy Crisis- rising electricity crisis is one amongst the foremost necessary assignments for the govt.. By now, they needsignificantly improved it and thirty four different power plants ar beneath negotiation to resolve the matter a minimum of for the export sector. alternative energy and plants with correct discipline style will scale back the native consumption of electricity to some extent.

 ample textile mills ar littered with inadequate pressure. there’s no resolution to the present downside if no new gas field may be intercalary with the native offer. Government should rely on alternate sources like LPGs through pipelines. {the value|the value|the price} of production has up thanks to instant increase in electricity and gas tariff and thanks to load shedding some mill owner uses various supply of energy like generator that increase their cost of production additional The News nowadays, 2016.Lack of trained worker and mid-level management- The Daily Star March twenty six, 2013 showed that 3 decades previousgarment sector is currently littered with twenty five % shortage of mean staff because the country couldn’t organize line of work and technical education (TAV) system for the staff.

Grooming a robust mid-level management for handling such huge|an enormous|a giant} sector is another big challenge for the close to future. Now-a-days, several Indian, Sri Lankan, and Pakistani folkss operating within the RMG trade in mid-level management position that is making cultural conflict and outward paymentwhich might are preserved by native people.5.3 Opportunities:Price, Capacity, and Capability-According to industry insiders, currently, 4 million workers are directly employed in the sector of which 80 percent are women. This helps Bangladesh with abundant supply of cheap labour.

According to Mckinsey & Company in their 2015 survey “Sourcing in a volatile world” concludes that cost of labor is still the key driver. For this reason Bangladesh will still be able to offer better prices than all its competitors. Though Bangladesh has listed 4,000 factories the total number of factories will exceed 8,000. Bangladesh has a total workforce of 76 million of which only 4 million works in ready-made-garments industry. Among other RMG suppliers in South Asia in terms of capacity, Indonesia has 2,450 factories, Vietnam 2,000, Cambodia 260 factories. For value to mid-level market most CPO (Chief Purchasing Officers) thinks Bangladesh provides ‘good quality’ for large order sizes.Trade Benefits- In the early 1980s Bangladesh started receiving investment in the RMG sector and grew tremendously at an export rate 6% growth each year because of the MFA agreement imposed an from a developing country to a developed country.

The EU recently has given duty free concessions under “Everything but Arms” (EBA) scheme to Bangladesh.  Canada has also announced that from January 2003, all imports into Canada from Bangladesh including RMG shall be duty free. Citing USTADA 2000, Bangladesh is lobbying for similar benefits from USA also.  All these concessions together scopes of new FTA, FDI, and collateral trade with other emerging countries would be beneficial to expand its markets (ITC, 2002).Product integration- In spite of good forward and backward integration in knit and denim sectors there are many other areas such as, woven shirt, woven bottoms, sport wear, active wear, work wear, and fashion area there is huge market.

There are also scopes in the area of fashion designing and work actively throughout the value chain from designing, transportation, whole selling, retailing, branding, etc.Logistics- New export processing zones are being set up, dormitory for workers are being constructed in Dhaka and Chittagong Financial Express, 2012, Garment village at Gozaria, Munshigonj is underway The Daily Star, 2016. Chittagong port is being renovated to increase its capacity by the Dutch consultants and China already offered financial assistance to make a deep sea port in Sonadia The Diplomat, 2016. Making the Dhaka-Mymensingh highway to four lanes and Dhaka-Chittagong highway to eight lanes will save time and money and boost export and import The Daily Star, 2016.Global economic turndown- It is also a major factor which has considerably reduced the buying power at consumer end. With the increase of labour cost and dearth of workforce in China many smaller companies will shift their production to cheaper source like Bangladesh. The recent devaluation of the Chinese RMB also means that Chinese products will arti?cially get more competitive in the international market.

However, raw material procured from China will become cheaper, contributing to cost competitiveness of Bangladeshi apparel Dhaka Tribune, 2016.Chapter 6 Conclusion & Recommendation6.1 Recommendation RMG sector has been a catalyst to achieve the goal of becoming a middle income country in 2018. But its global position is 2nd and contribution to GDP is not satisfactory. Analyzing the challenges & opportunities I would like to present a few recommendations.

They are described below:Trade policy Ø Reduce maximum tariff to 15 percent or lower over the next 5 years or so. Ø Replace all trade-related QRs with appropriate tariffs. Ø Strengthen commercial sections of Embassies, with performance-based appointment and promotion of commercial counselors.

Fiscal issues Ø Phase out export subsidy, including some new ones added in the past 2-3 years. Regulatory processes and governance Ø Simplify procedures for registration of firms, issuance of licenses, and abolish unnecessary licenses. Streamline inspection regime. Ø Streamline import-export regime for other exports; Improve customs administration. Labor Ø Modify labor policy to allow night shift work for women. Ø Provide adequate dormitory facilities for workers. Finance Ø Strengthen financial sector reforms to bring about lower interest rates.

Infrastructure and utilities Ø Invest in port infrastructure and container terminals. Install ship-to-shore gantry cranes. Ø Grant permission to establish off-dock yards to handle inbound containers.

17 Ø Introduce metered gas with necessary investment in gas pipelines and infrastructure. Ø Widen roads and increase capacity of Dhaka-Chittagong road corridor. Ø Adjust prices of freight services and increase number of freight trains. Introduce commercial management in Railways. Qualitysocial and environmental standards Ø Establish good quality testing laboratories and increase existing laboratory capabilities. Ø Improve Govt. and industry capabilities in hygiene and other food safety controls. Enterprise capacity and marketingØ Develop information services in EPB, BGMEA and/ or BIFT.

Ø Support trade missions, participation in trade fairs, buyer-seller match making and training. Ø Develop financing mechanisms for sustainable training (esp. contribution from industry)Socio-political dependabilitySocio-political stability is the key to steady growth of the industry. It creates conducive environment for sustainable growth of trade and industry in a country. Democracy in true sense, peaceful transfer of power, Policy continuation, tolerance in political culture, institutional form of politics are some of the mentionable points to ensure socio-political stability which Bangladesh seriously lack behind.

Rule of Law Rule of law is the pre requisite for the total development of the RMG sector in the country. Sustainability of any economic activity mainly depends on the social justice ensured by the rule of law. Rule of law is facing a big question mark in Bangladesh. It has the biggest room of improvement. Strengthening institutionsState and government institutions are badly needed to be strengthened. They should be allowed to work accordingly. Reward and punishment should be in practice.

Better infrastructureAvailability of power and gas, Inadequate infrastructure, bureaucratic inefficiency and corruption are still the major problematic factors in industrialisation and for growth of an industry. These are also increasing entrepreneurs’ cost of doing business. We are also losing price and delivery competitiveness to our business competitor. Low rate fundingAccess to low-rate funding for factory relocation were identified as top priorities necessary for advancing the sector. Low interest rateHigh Bank loan interest rate is a barrier to sustainability of RMG sector in Bangladesh. Rate of interest should be in a reasonable rate in comparison to countries which are the competitors of Bangladesh. Image building and brand developmentImage building and branding can achieve a high level of value addition and enhance Bangladesh’s reputation as a quality supplier of apparel.

As branding is an expensive investment, incentives and opportunities should be provided to exporters, such as through a ‘Brand Fund’ and by encouraging foreign collaboration to launch collective brand names through corporate marketing companies. Investments in skills, design and advertising will be essential for the “Made in Bangladesh” label to make its mark in the global marketplace. For this, an active promotion campaign will be required by the industry, government, and EPB. Local and international exhibitions should be held with aggressive efforts to attract foreign buyers. Bangladesh embassies abroad should appoint dynamic business-oriented commercial officers whose main job will be to promote export products through direct contact with potential buyers. Public goods and Public BadsPublic goods are to be provided without rivalry and without excludability. In present situation of Bangladesh, public goods are also occupied by ruling party men.

These are to be made free to provide services to the citizens. In some cases government may not be able to provide services to the citizens but 74 should not create obstacles by the hooliganism of the.6.2. ConclusionThis study was done to find out the current situation of RMG sector of Banglaesh.

Here I have analyzed the challenges & opportunies and presented a few recommendation. These might help to improve the current status of the sector and make it more beneficial to our economy. RMG Sector has emerged as the single most important contributor towards employment generation, income and foreign earning, and growth of Bangladeshi economy. However, different factors such as weak infrastructure, lack of energy and supportive regime, inefficient management, and lack of industrial integration have prevented the RMG sector to realize its full potential. By managing these factors through collective efforts, Bangladesh economy may realize its development dream and enhance the standard of living and sustain its current status as a middle income country.Reference;sequence=1 END


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