RMG exporters for development of backward linkage industry
Monday, 23 May 2011
Talha Bin Habib
The country's readymade garments (RMG) exporters are opposed, at this stage, to allowing foreign direct investment (FDI) to the sector, fearing that it might create an uneven competition in the garment industry. The exporters recommended for development of backward linkage industries (BLIs) so that the country can reduce its dependence on importing items that assist the production of garments. "The garment sector is a blessing for us (Bangladesh). We are capable of running the sector by ourselves (local entrepreneurs).We do not need FDI," Bangladesh Garments Manufacturers and Exporters Association (BGMEA) president Md Shafiul Islam (Mohiuddin) told the FE on Sunday. "If the FDI comes, it may create a dearth of manpower shortages since the country has been suffering from insufficient skilled manpower," he said. He said that even though the garment sector has been witnessing increasing growth in export, the garment industry is in reality facing a stiff competition from rival countries. Recently, the garment sector has witnessed a growth of 42.23 per cent. Up to the month of April of the current 2010-11 fiscal year, products worth US $14,249.52 million were exported, surpassing the $13,746.39 million export target of the current fiscal year, he added. "We are facing a stiff competition from our rival countries as the cost of production has increased manifold and skilled manpower in the sector has not increased satisfactorily marketing of the growing demand," the BGMEA president said. "If we want to retain the on-going impressive export growth, then we have no option but to develop our human resources for the sector," he stated. He said many countries have already taken appropriate protective procedures to guard their exports from their rival countries. For example, Turkey has already taken some safeguard measures to protect the interests of their garment industries. The head of the country's garment exporters association is of the view that some similar measures should be taken in Bangladesh in order to protect its export oriented RMG "so that our leading foreign currency earning sector does not get plunge into troubles." He also advocated for the development of the BLIs for the woven and knitwear sectors. "So far, locally, we only have 30 per cent of BLIs for the woven sector," he said, adding that the country "has to produce a sufficient number of skilled manpower and also uninterrupted supply of power and gas has to be ensured to the garment industry if we want to hold the present trend of export growth." While the export of garment items has significantly increased in recent years, the volume of export could increase even more if BLIs are developed in the country, he further added. Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) also echoed similar sentiments, as were expressed by the BGMEA on the FDI issue in this sector. "The FDI may be accepted inside the Export Processing Zones (EPZ), but we strongly oppose the FDI in the garment industries outside the EPZ," an influential leader of the BKMEA told the FE on condition of anonymity. "We are still highly dependent on the import of raw materials as we are yet to develop our BLIs for creating exportable garment items," he said. "We do not have sufficient spinning mills. Bangladesh can easily make polyester if there are the required number of mills that can help supply textiles for making garments items," he said suggesting that the development of BLIs in the country can be developed through joint ventures.
The country's readymade garments (RMG) exporters are opposed, at this stage, to allowing foreign direct investment (FDI) to the sector, fearing that it might create an uneven competition in the garment industry. The exporters recommended for development of backward linkage industries (BLIs) so that the country can reduce its dependence on importing items that assist the production of garments. "The garment sector is a blessing for us (Bangladesh). We are capable of running the sector by ourselves (local entrepreneurs).We do not need FDI," Bangladesh Garments Manufacturers and Exporters Association (BGMEA) president Md Shafiul Islam (Mohiuddin) told the FE on Sunday. "If the FDI comes, it may create a dearth of manpower shortages since the country has been suffering from insufficient skilled manpower," he said. He said that even though the garment sector has been witnessing increasing growth in export, the garment industry is in reality facing a stiff competition from rival countries. Recently, the garment sector has witnessed a growth of 42.23 per cent. Up to the month of April of the current 2010-11 fiscal year, products worth US $14,249.52 million were exported, surpassing the $13,746.39 million export target of the current fiscal year, he added. "We are facing a stiff competition from our rival countries as the cost of production has increased manifold and skilled manpower in the sector has not increased satisfactorily marketing of the growing demand," the BGMEA president said. "If we want to retain the on-going impressive export growth, then we have no option but to develop our human resources for the sector," he stated. He said many countries have already taken appropriate protective procedures to guard their exports from their rival countries. For example, Turkey has already taken some safeguard measures to protect the interests of their garment industries. The head of the country's garment exporters association is of the view that some similar measures should be taken in Bangladesh in order to protect its export oriented RMG "so that our leading foreign currency earning sector does not get plunge into troubles." He also advocated for the development of the BLIs for the woven and knitwear sectors. "So far, locally, we only have 30 per cent of BLIs for the woven sector," he said, adding that the country "has to produce a sufficient number of skilled manpower and also uninterrupted supply of power and gas has to be ensured to the garment industry if we want to hold the present trend of export growth." While the export of garment items has significantly increased in recent years, the volume of export could increase even more if BLIs are developed in the country, he further added. Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) also echoed similar sentiments, as were expressed by the BGMEA on the FDI issue in this sector. "The FDI may be accepted inside the Export Processing Zones (EPZ), but we strongly oppose the FDI in the garment industries outside the EPZ," an influential leader of the BKMEA told the FE on condition of anonymity. "We are still highly dependent on the import of raw materials as we are yet to develop our BLIs for creating exportable garment items," he said. "We do not have sufficient spinning mills. Bangladesh can easily make polyester if there are the required number of mills that can help supply textiles for making garments items," he said suggesting that the development of BLIs in the country can be developed through joint ventures.