Biz-Econ

Bangladeshi ready-made garments sector facing an uneven path

By ASM Akram

In 2023, Bangladesh fixed up its rank second in exporting ready-made garments worth $38 billion and China is at the topper $165 billion, as always. In our nearest giant country India ranks in fifth position and is worth $15 billion. This figure has emerged in the ‘World Trade Statistical Review 2023’ report of the World Trade Organization (WTO).

Now come to our Country Garment Chapter. Obviously, there’s no doubt, that every single garment factory in Bangladesh has contributed to improving the country’s economic status, social security, and export volume by a major margin. This industry really made a miracle so that people wear clothes globally “Made in Bangladesh.” This is possible only to the combined struggle & Team endeavors of small & giant garment factories around Bangladesh.

You know very well that former Prime Minister Sheikh Hasina of Bangladesh fled the country on August 5th,2024 leaving the country situation in turmoil or just stagnant. During the tenure of the student movement, we also found huge protests against the former government with huge vandalism, attack and counter attack, as well widespread bone of contention created by country’s rival counterpart & beyond. During the former PM’s immediate step-down moments and later on, huge vandalism & firing issues happened in front of our nose, in our so many well famous garments factories by third quarters conspiracy to make the country's situation more volatile and unstable.

The student movement, which played a momentous role in the recent protests, demands a comprehensive transformation in the political scenery and the choosing of economist Muhammad Yunus as the new leader of the Interim government. Mass people, all opposition parties, and students are fundamental performers in the continuing political challenge.

Notwithstanding, the overall situation in Bangladesh is still fluid, several Industries like garments which is intangibly influenced and contributed a good number of professional people’s bread & butter. Hence, we are expecting a good leadership of interim government which leading to new elections for the betterment of country people and our people wellbeing. The outcome of the upcoming elections will determine the future  direction of Bangladesh and its prospect.

As of 2024, the garment sector contributes about 11% to Bangladesh’s GDP. Being a major industry of the country’s economy, it fetches around 80% of the export revenue.

Here are some important influences of the garment industries which directly effects of country wheel with a strong vibe, first of all, we look into employment generation. The garments industry is a major source of employment in Bangladesh, particularly for women. In fact, as of 2022, more than four million Bangladeshis work in garment factories, of which nearly 60% are women. Secondly, we may be focused on export revenue, Bangladesh is significantly world’s leading garment exporters to the country’s export earnings considering its competitive labor costs, favorable trade policies, and a strong supply chain. so ready-made garment (RMG) sector of Bangladesh has been the cornerstone of the country’s economy. The industry's contribution to Bangladesh's GDP is significant, with estimates suggesting that it accounts for around 18 per cent of the country's total GDP and was growing at a rate of about 6 per cent, according to IMF data.

The industry has played an indispensable role in reducing poverty by giving job opportunities to many people, especially those from low-income backgrounds. This has a positive strike on poverty alleviation and social development. Bangladesh’s garments industry has become globally competitive, attracting international brands and retailers. The industry can make good clothes at competitive prices, making it an important part of the global market for clothes and fabrics. During the fiscal year 2021–22, Bangladesh exported garments worth US $45 billion, making it the second-largest garment exporter in the world too (Export Promotion Bureau data).

The industry that has made a vital contribution to revolution our country and its economy is none other than the RMG industry, which is now the only major export breadwinner for Bangladesh.

If we walk down memory lane of last few months, then we find that garment sector of Bangladesh facing huge suffering with uncertainty & unwanted issues like enhancing of wage, gas crisis along with the political turmoil in Bangladesh, including stepping down of Prime Minister Sheikh Hasina has created a nuisance ambient that further unrest & undulating the industry and our economy. 

This unstable has hampered not Only the overall industry but also influenced of millions of people fate and pushed to international buyers’ mindset to consider alternative sourcing forum unfortunately adopting a 'Bangladesh -plus -one' strategy which led to be a significant loss of market share for RMG sector.

The major importers partner Countries  of Bangladesh are the UK, USA, Germany, France, Spain, Canada, Italy, Belgium, Australia and Denmark.

Despite outstanding uprising, the RMG industry sector is going through versatile noteworthy & remarkable hindrances. These intermingle internal issues and competition come from abroad like India, Vietnam & Sri Lanka.

Current political nuisance & undulant situation, following the exit of Sheikh Hasina, Former PM leading the closure of the garment industry all over Bangladesh become worse day by day.

You know, garment industry heavily affected by a severe gas scarcity since June 2024 which leading significantly drop down in production and few factories operating at less than 30% capacity and others closing down temporarily. This abruptly lessen has generated bottlenecks in the World supply chain drastically. 

In the recent unrest in August, the internet blackout caused the communication gap with buyers which directly effect in delays in garment exports, outcomes in huge demurrage charges and exporters are in totally shattered and ripple effect in exporters economy in bad way!

In true sense, our garment sector is now passing through very rough & tough path and we need to overcome soon rather we let down due to shift our business to nearest countries.

In this regard, our current Interim government should take necessary measures to boost up this sector with strict hand & diplomatic way.

Local & International conspiracy should be taken into consideration and all conspirators might be punished by laws. Fostering bilateral relationship among buyers’ countries which create & leading a win situation in favor of Exporters indirectly, no doubt.

Gas supply is an indispensable part for continuation and ensuring supply of buyer demand, hence gas supply will be given the highest level of preference from Govt end.

No vandalism, no unrest, no instigate will be accepted from any people or group. It will be controlled with a mighty hand by our law enforcement part. 

Overall, we all should be vigilant & keep alert eyes on this sector or  any vulture eye may affect. 

This Sector  ensures multilateral classes of People's bread & butter directly or indirectly. 

So, best of luck for our prime sector's upcoming good days & prosperity. 

ASM Akram is a policy analyst.