Reliance on RMG sector not a problem for economy: Muhith

Finance Minister A M A Muhith on Wednesday differed with the criticism about the economy's 'high dependency' on the readymade garment (RMG) sector.
Rather, development of RMG sector cannot be seen in isolation from other sectors of the economy, he opined.
"RMG sector has a great role in the country's economic development. Many consider such high dependency on a single sector as a problem. Though our development is largely dependent on RMG sector, its growth is related to many other sectors," the minister said.
Mr Muhith stated these while inaugurating the four-day 17th GARMENTECH Bangladesh 2018 at International Convention City Bashundhara in the capital.
Four trade shows on apparel machinery and allied products, yarn and fabrics, garment accessories and packaging and related machinery, and printing and other allied machinery are taking place under the umbrella of GARMENTECH.
The shows are jointly organised by Bangladesh Garments Accessories and Packaging Manufacturers and Exporters Association (BGAPMEA), Zakaria Trade and Fair International, and ASK Trade and Exhibition Pvt Ltd.
Some 450 companies from more than 20 countries are displaying their products related to garment accessories, packaging, printing and related machinery, and yarn and fabrics.
The minister said previously the country manufactured only 10 to 15 per cent of its required raw materials of RMG sector, which now stands at 50 to 60 per cent.
The local accessories industry also has its contribution to the manufacturing growth, and it contributes 10 to 15 per cent of the total RMG export.
Private sector invested the larger share - 22 to 23 per cent - of the GDP, while the government's share is only 7.0 per cent. The government is providing an investment-friendly environment to help the private sector flourish further, he further said.
BPGMEA President Abdul Kader Khan said local accessories and packaging industry now meets 95 per cent requirements of the garment sector, and after meeting the local demands, it also exports directly.
The sector made 'deemed' export worth $6.7 billion in last fiscal, he said, adding Bangladesh is now a lucrative destination for garment buyers.
"The sector can earn $12 billion by 2021 in line with the RMG sector's export earning target of $50 billion, if the government provides necessary policy supports."
Mr Khan noted that the government has reduced the corporate tax for RMG sector to 12 per cent from 35 per cent.
"But we are yet to get any such facility though we have been supporting RMG sector by producing 95 per cent of its required raw materials."
As the backward linkage industry of RMG, the sector does not get any cash incentive, he said, requesting the government to give 5.0 per cent cash support to the sector.
His other demands included giving the association authority to issue utilization permission as well as declaring accessories and packaging items as product of the year.
Echoing the BGAPMEA president's demands, Exporters Association of Bangladesh (EAB) President Abdus Salam Murshedy said the sector also needs the government's support, especially the small, medium and women entrepreneurs.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Md Siddiqur Rahman said trade shows (like GARMENTECH) help entrepreneurs to be familiar with modern technology and machinery.
Bangladesh could be the best destination (of China shift), provided the Chittagong Port handles cargoes efficiently by reducing long lead time and the apparel sector gets backward linkage support and smooth supply of energy, he opined.

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