RMG: Strengths to look for

The RMG sector of Bangladesh has set itself an export target of $50 billions by 2021. The target appears slightly ambitious and quite a few people are sceptical about its attainability. In the backdrop of pronounced scepticism of some quarters, the wisest thing would be to remove the existing road blocks and facilitate the smoothening process towards achieving the target.
We understand, to achieve a target of this magnitude in only seven years, will require a steady growth of around 13 per cent in export income per year. Bangladesh exported readymade garments worth $ 24.5 billions during the last financial year. A growth of 13 per cent in one year means an increase by $3.25 billions.
Export income mainly comes from the USA and the European countries. Canada is also a big market. But the economies of the developed countries have not been able to come out of the recent recession as yet.
There is a continuing sluggish trend in growth. Therefore, it may not be possible for the developed countries to reciprocate by buying more or paying more.
Our export of RMG products to the developed countries mostly comprises cheap items and export of high value items is very limited.
Export of mid-value items like, suits, blazers, synthetic and polyester dresses is also not very encouraging, which suggests that the export market needs to be diversified to prosper. That is, the number of importing countries will have to be increased which is no mean a task.
Despite the odds, the encouraging feature is, export to countries outside USA, Canada and Europe is increasing every year. Turkey, Russia, Japan, India, China, Australia, Brazil etc., have been added to the list of buyers. It is predicted that China might emerge as a prospective buyer overtaking the European Union by 2015.
Increased export calls for increased production and more entrepreneurs are needed for increased production. At the same time, infrastructural facilities like, land, electricity, gas, road, railways, port etc., are to be improved.
Skilled workers alongside efficient administration are also required. Special attention has to be paid to the training of workers.
Side by side, foreign investment will have to be attracted. There are, however, differences of opinion regarding foreign investment in the RMG sector.
A group of entrepreneurs claim that they have acquired enough efficiency over the last few decades and are fully equipped with the expertise to meet the challenge of achieving increased production during the next few years. Another group is of the opinion that foreign investment should be allowed for production of the items that sell at high prices.
We have a big challenge ahead of us which should be faced equally by entrepreneurs, government, owners and labour organisations. Howsoever large it is, RMG industry is not the lone pillar of our industrial sector. Small and cottage industry sector is also flourishing and has immense potential.
Banks are also extending financial help to the entrepreneurs of this sector. It is necessary to set up textile and other linkage industries to help the RMG sector. Similarly, alongside capitalising the potentials of RMG, we should pay attention to other product areas also.
While formulating short term and long term plans, we should consider all sub-sectors of industrial sector.  Infrastructure development should also be planned with all these industries in mind.
Improvement in work environment and living standard of the workers has become two crucial issues now. Buyers have been pressing on these issues for last few years.
Pressure accelerated after the deadly accidents ? fire at Tazrin Fashions and collapse of Rana Plaza. It is, therefore, imperative that we prepare our investment plan keeping in mind the interest of the workers.
Besides, we must give due importance to various agreements executed with UN and foreign agencies. The progress achieved in recent times in factory inspection, fire prevention etc., which should be sustained.
To be honest, compliance is an expensive affair. It demands a lot of things to be done apart from just raising workers' wages. As a result, production cost will go up which will negatively affect export.
It remains to be seen whether the buyers are ready to pay higher prices for their imports. Prime Minister Sheikh Hasina had recently called upon international buyers to pay some additional price for purchase of readymade garments from Bangladesh.
We shall have to wait and see how the buyers respond to her request. One thing is certain that we have a difficult journey ahead and everything depends on how effectively we accomplish the journey.
The economy of Bangladesh is largely dependent on agriculture. However, the readymade garments sector has experienced an exponential growth since the 1980s. The sector contributes significantly to the GDP. It also provides employment to around 4.2 million Bangladeshis, mainly women from low income families.
Inadequate infrastructure, bureaucratic inefficiency and corruption are still the major stumbling blocks for industrialisation and growth of an industry.
These are also raising the entrepreneurs' costs of doing business. We are also losing price and delivery competitiveness to our business competitors. Last but not the least, political stability of the country is the key to steady growth of industry.
The readymade garments industry acts as the backbone of Bangladesh economy and as a catalyst for the development of the country. We take pride in the fact that this sector has been fetching billions of dollars as export earnings and creating jobs for millions of people in the country.
The industry that has been making crucial contribution to building the country and its economy is none other than the RMG which is now the single biggest export earner for Bangladesh.
Starting from scratch, Bangladesh has come a long way and is now one of the ten new emerging countries in the world. The macroeconomic stability, annual average GDP growth at 6 per cent, robust workers' remittance and export, strong foreign currency reserve, and achievements in social and human development over the past decades - all reflect our underlying strengths.
[email protected]