Overview-of-Bangladesh-Garment-Industry-1

Overview of Bangladesh Garment Industry

Agriculture, as the case in India, has been the spine of economic system and chief supply of earnings for the human beings of Bangladesh, the united states of america made of villages. Government wants to limit poverty by way of getting best possible productiveness from agriculture and reap self-reliance in food production. Apart from agriculture, the us of a is lots concerned about the growth of export division. Bangladesh have accelerated and changed her exports appreciably from time to time. After Bangladesh came into being, jute and tea had been the most export-oriented industries. But with the persistent perils of flood, failing jute fibre fees and a large decline in world demand, the function of the jute zone to the country’s economic system has deteriorated (Spinanger, 1986). After that, focus has been shifted to the characteristic of manufacturing sector, in particular in garment industry.

The garment enterprise of Bangladesh has been the key export division and a primary source of foreign exchange for the closing 25 years. At present, the united states generates about $5 billion well worth of merchandise each yr through exporting garment. The industry presents employment to about three million workers of whom 90% are women. Two non-market factors have performed a crucial feature in confirming the garment industry’s continual success; these elements are (a) quotas underneath Multi- Fibre Arrangement1 (MFA) in the North American market and (b) one of a kind market entry to European markets. The complete process is strongly related with the trend of relocation of production.

Displacement of Production in the Garment Industry

The world economic system is now controlled via the transfer of manufacturing where companies of developed nations swing their interest to growing countries. The new illustration is centred on a core-periphery machine of production, with a comparatively small centre of everlasting employees dealing with finance, research and development, technological organization and modernisation and a periphery containing dependent factors of production procedure. Reducing charges and growing output are the predominant reasons for this disposition. They have determined that the simplest way to undercharge is to pass production to a united states where labour charge and production costs are lower. Since creating nations provide areas that do now not impose fees like environmental degeneration, this practice protects the developed nations against the issues of surroundings and law. The switch of manufacturing to Third World has helped the growth of economic system of these nations and also velocity up the financial system of the developed nations.

Garment enterprise is managed by means of the switch of production. The globalisation of garment production began before and has accelerated greater than that of any other factory. The groups have transferred their blue-collar manufacturing activities from high-wage areas to low cost manufacturing regions in industrialising countries. The enhancement of communication device and networking has played a key function in this development. Export-oriented manufacturing has delivered some right returns to the industrialising countries of Asia and Latin America when you consider that the 1960s. The first relocation of garment manufacturing took area from North America and Western Europe to Japan in the Nineteen Fifties and the early 1960s. But throughout 1965 and 1983, Japan modified its interest to greater lucrative merchandise like cars, stereos and computer systems and therefore, 400,000 people had been dismissed via Japanese material and garb industry. In impact, the 2nd stock transfer of garment manufacturing was from Japan to the Asian Tigers – South Korea, Taiwan, Hong Kong and Singapore in 1970s. But the tendency of transfer of manufacturing did not continue to be there. The upward push in labour charge and activeness of change unions had been in share to the enhancement in economies of the Asian Tigers. The enterprise witnessed a 0.33 transfer of manufacturing from Eighties to 1990s; from the Asian Tigers to other growing countries – Philippines, Malaysia, Thailand, Indonesia and China in particular. The Nineteen Nineties have been led by the closing group of exporters consisting of Bangladesh, Srilanka, Pakistan and Vietnam. But China used to be leader in the cutting-edge of the relocation as in less than ten years (after 1980s) China emerged from nowhere to grow to be the world’s major producer and exporter of clothing.

Bangladesh Garment Sector and Global Chain
The reason of this switch can be clarified by using the revenue shape in the garment industry, all over the world. Apparel labour cost per hour (wages and fringe benefits, US$) in USA is 10.12 but it is only 0.30 in Bangladesh. This distinction accelerated the world apparel exports from $3 billion in 1965, with creating countries making up simply 14 percent of the total, to $119 billion in 1991, with developing nations contributing 59 percent. In 1991 the wide variety of workers in the ready-made garment enterprise of Bangladesh was 582,000 and it grew up to 1,404,000 in 1998. In USA, however, 1991-figure confirmed 1,106.0 thousand people in the clothing zone and in 1998 it turned down to 765. eight thousand.

The introduced statistics exhibits that the tendency of low labour expenses is the key motive for the switch of garment manufacturing in Bangladesh. The practice initiated in late 1970s when the Asian Tiger international locations had been in quest of systems to avoid the export quotas of Western countries. The garment units of Bangladesh are in most cases relying on the ‘tiger’ international locations for raw materials. Mediators in Asian Tiger international locations build an middleman between the fabric units in their home countries, where the spinning and weaving go on, and the Bangladeshi devices the place the fabric is cut, sewn, ironed and packed into cartons for export. The equal representatives of tiger countries find out the market for Bangladesh in several international locations of the North. Large retail trading corporations placed in the United States and Western Europe supply most orders for Bangladeshi garment products. Companies like Marks and Spencers (UK) and C&A (the Netherlands) control capital funds, in proportion to which the capital of Bangladeshi owners is patience. Shirts manufactured in Bangladesh are sold in developed countries for 5 to ten times their imported price.

Collaboration of a native private garment industry, Desh Company, with a Korean company, Daewoo is an vital occasion of global garment chain that works as one of the grounds of the enlargement of garment industry in Bangladesh. Daewoo Corporation of South Korea, as phase of its world policies, took activity in Bangladesh when the Chairman, Kim Woo-Choong, offered an aspiring joint mission to the Government of Bangladesh, which included the growth and technique of tyre, leather-based goods, and cement and garment factories. The Desh-Daewoo alliance was decisive in phrases of getting into the international apparel markets at tremendous juncture, when import reforming used to be going on in this market following the signing of MFA in 1974. Daewoo, a South Korean leading exporter of garments, was in search of possibilities in nations, which had rarely used their quotas. Due to the quota restriction for Korea after MFA, the export of Daewoo grew to be limited. Bangladesh as an LDC received the threat to export except any constraint and for this purpose Daewoo was once concerned with the use of Bangladesh for their market. The cause behind this want used to be that Bangladesh would count on Daewoo for importing uncooked substances and at the identical time Daewoo would get the market in Bangladesh. When the Chairman of Daewoo displayed hobby in Bangladesh, the country’s President put him in contact with chairman of Desh Company, an ex-civil servant who was once seeking greater entrepreneurial pursuits.

To fulfil this wish, Daewoo signed a collaboration contract with Desh Garment for 5 years. The contract also incorporated the fields of technical training, buy of equipment and fabric, plant institution and advertising in return for a unique advertising fee on all exports by using Desh at some stage in the contract phase. Daewoo also imparted an exhaustive sensible training of Desh personnel in the working surroundings of a multinational company. Daewoo keenly helped Desh in shopping for machinery and fabrics. Some technicians of Daewoo arrived Bangladesh to establish the plant for Desh. The stop end result of the affiliation of Desh-Daewoo used to be important. In the first six years of its business, i.e. 1980/81-86/87, Desh export cost expanded at an annual common rate of 90%, reaching extra than $5 million in 1986/87.

It is claimed that the Desh-Daewoo alliance is a significant factor for the growth and fulfillment of Bangladesh’s whole garment export industry. After getting linked with Daewoo’s manufacturer names and marketing network, foreign places buyers went on with buying clothes from the employer heedless of their origin. Out of the opening trainees most left Desh Company at several instances to erect their personal competing garment companies, labored as a way of moving know-how all through the total garment sector.

It is essential to perceive the results of the process of moving production from high pay to low pay countries for both growing and developed nations. It is a naked truth that most of the Third World international locations are now on the way to industrialisation. In this procedure, people are working below unfavourable working surroundings – minimal wages, unhealthy location of work, lack of security, no job guarantee, pressured labour etc.

The route of globalisation is full of ups and downs for the creating nations. Relocations of comparatively mobile, blue-collar manufacturing from industrialized to growing nations, in some circumstances, can have troublesome consequences on social life if – in the absence of environment friendly planning and talks between international enterprises and the authorities and/or enterprises of the host state – the transferred motion encourages urban-bound relocation and its span of stay is short. Another negative end result is that the upward push in employment and/or income is no longer predicted to be satisfactorily massive and extensive to reduce inequality. In connection with the bad outcomes of relocation of manufacturing on employment in developed countries, we realize that in comparatively blue-collar industries, the growing imports from developing international locations lead to unavoidable losses in employment. It is held that improvement of alternate with the South was a giant cause of the disindustrialisation of employment in the North over past few decades.

After all personnel who are continuously working beneath adverse instances have to bear the brunt. Work is under-control across the Bangladesh garment sector. Appalling working environment has been brought to mild in the Bangladesh garment industry.

A research displays that ninety percent of the garment employees went thru sickness or sickness for the duration of the month earlier than the interviews. Headache, anaemia, fever, chest, stomach, eye and ear pain, cough and cold, diarrhoea, dysentery, urinary tract infection and reproductive health problems were more common diseases. The garment factories gave bonus of different ailments to the employees for working. With a view to finding out a hyperlink between these illnesses and industrial threats, health repute of personnel has been examined before and after coming in the garment work. At the give up of examination, it was come out that about seventy five percentage of the garment body of workers had sound fitness earlier than they entered the garment factory. The motives of health declines were industrial threats, negative working environment, and want of body of workers facilities, inflexible phrases and stipulations of garment employment, workplace pressure, and low wages. Different work-related threats and their influence on health pressured employees to go away the job after few months of joining the factory; the common size of provider used to be solely four years.

The garment quarter is disreputable for fires, which are said to have claimed over 200 lives in the past two years, though exact figures are challenging to find. A surprising instance of absence of administrative center safety was the fire in November 2000, in which almost 50 people misplaced their lives in Narsingdi as exist doorways were closed.

From the above analysis of working environment of garment sector, we can country that the working environment of most of the Third World nations, specifically Bangladesh remind us of previously improvement of garment industries in the First World nations. The nation of employment in many (not necessarily) textiles and garb units in the growing international locations take us returned to those set up in the nineteenth century in Europe and North America. The mistreatment of garment employees in the birth length of the improvement of US garment factories reviewed above is greater or less equal as it seen now in the Bangladesh garment industry. Can we nation that garment employees of the Third World countries dwelling in the twenty first century? Is it a return of the Sweatshop?

In a way, the Western businesses are responsible of pitiable working environment in the garment sector. The developed countries desire to make more profit and therefore, pressure the creating international locations to cut down the manufacturing cost. In order to continue to exist in the competition, most of the creating countries pick immoral practices. By introducing rigid phrases and prerequisites in the business, the global economy has left few selections for the creating nations.

Right Time to Make a Decision
There are two alternatives to address the task of the competitive world initiated via the non-stop pressure of international garment chain. One can continue to exist in the competition by means of adopting time-honoured work structures or immoral practices. But it is uncertain how long they can proceed to exist. In connection with the garment enterprise of Bangladesh, we can say that this is the proper time to comply with a aggressive policy, which improves quality. If the MFA possibilities are eliminated, will it be feasible to hold the competitiveness via low-wage-female labour or via in addition drop in girl wages? Possibly not. Since the labour costs are so minimal that with such wage, a worker is not able to hold even a family of two members. Enhancing the efficiency of female people is the only answer to elevated competition. Proper education and thorough coaching can help gain these tremendous results. To rule the international market, Bangladesh has to come out of low wage and low output complex in the garment industry. Bangladesh can decorate labour output thru regular training, use of upgraded technology and better working environment. Bangladesh graph a strategy meant for advertising talent development, rushing up science switch and improving productiveness peak of the workers.

Another technique is to undertake pleasant device or moral course. Those companies, which react to heightened competition by stressing quality, rapid reply of the customers, honest practices for labourers have the most revolutionary practices. We think that we are now living in the age of competition in producing extended excellent over cost-reduction policy. The objective of change efforts at the place of business has been modified over the time – from making the job humane in the 1960s, to job delight and output in 1970s, to fantastic and competitiveness in the 1980s. It is necessary for a organization to pursue a aggressive coverage that improves quality, flexibility, innovation and purchaser care. If they matter on low charges through losing labourers’ wages and different services, they will be bereaved of labourers’ dedication to work.

Strength

. Considerable Qualified/keen to analyze personnel accessible at low labour charges. The endorsed minimal average wages (which encompass Travelling Allowance, House Rent, Medical Allowance, Maternity Benefit, Festival Bonus and Overtime Benefit) in the units within the Bangladesh Export Processing Zones (BEPZ) are given as below; on the other hand, backyard the BEPZ the wages are about 40% lower:

. Energy at low price

. Easily reachable infrastructure like sea road, railroad, river and air communication

. Accessibility of essential infrastructure, which is about 3 decade old, generally hooked up with the aid of the Korean, Taiwanese and Hong Kong Chinese industrialists.

. FDI is legally permitted

. Moderately open Economy, especially in the Export Promotion Zones

. GSP under EBA (Everything But Arms) for Least Developed Country relevant (Duty free to EU)

. Improved GSP benefits underneath Regional Cumulative

. Looking forward to Duty Free Excess to US, talks are on, and appear to be on hopeful track

. Investment certain underneath Foreign Private Investment (Promotion and Protection) Act, 1980 which secures all foreign investments in Bangladesh

. OPIC’s (Overseas Private Investment Corporation, USA) insurance and finance agendas operable

. Bangladesh is a member of Multilateral Investment Guarantee Agency (MIGA) underneath which safety and protection measures are available

. Adjudication provider of the International Centre for the Settlement of Investment Dispute (ICSID) offered

. Excellent Tele-communications community of E-mail, Internet, Fax, ISD, NWD & Cellular services

. Weakness of currency in opposition to dollar and the condition will persist to help exporters

. Bank interest@ 7% for financing exports

. Convenience of responsibility free customized bonded w/house

. Readiness of new devices to enhance systems and create infrastructure accordant with product boom and quickly reactions to circumstances

Weakness
. Lack of marketing tactics

. The usa is poor in creativity

. Absence of without difficulty on-hand middle management

. A small number of manufacturing methods

. Low acquiescence: there is an international strain crew to compel the neighborhood producers and the authorities to enforce social acquiescence. The US GSP can also be cancelled and purchasing from US & EU may additionally decrease significantly

. M/c advancement is necessary. The machinery required to check add on a garment or amplify competence are lacking in most industries.

. Lack of training organizations for industrial workers, supervisors and managers.

. Autocratic approach of almost all the investors

. Fewer manner devices for textiles and garments

. Sluggish backward or ahead mixing procedure

. Incompetent ports, entry/exit complicated and loading/unloading takes a great deal time

. Speed cash culture

. Time-consuming custom clearance

. Unreliable dependability concerning Delivery/QA/Product knowledge

. Communication gap created by means of incomplete information of English

. Subject to herbal calamities

Opportunity

. EU is inclined to set up industry in a huge way as an option to china specially for knits, including sweaters

. Bangladesh is included in the Least Developed Countries with which US is committed to enhance export trade

. Sweaters are very reasonable even with china and is the prospect for Bangladesh

. If knowledgeable technicians are reachable to instruct, prearranged garment is an alternative because labour and energy cost are inexpensive.

. Foundation clothes for Ladies for the FDI promise is massive because both, the technicians and tremendously developed equipment are essential for higher competence and output

. Japan to be observed, as conventionally they purchase handloom textiles, domestic furniture and garments. This section can be encouraged and elevated with persevered development in quality

Threat

. The exporters have to put together themselves to harvest the benefits provided by way of the opportunities.

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