Owth and Contribution
Owth and Contribution
Owth and Contribution
Abstract
The research investigates the growth and contribution of Ready-Made Garment (RMG) sector of Bangladesh.
In doing so, author has taken data from Bangladesh Garment Manufacturers and Exporters Association
(BGMEA) website and conducted some structured interviews at various levels of people associated to the
sector as well. After analyzing the information found in both secondary data source and primary source, the
author has concluded that the sector is growing rapidly though some hindrances are being faced at a regular
interval.The study recommends government and other regulatory authorities to take necessary steps for the
protection and further development of this sector. Finally, the study expects playing crucial role in creating
consciousness among the stakeholders about the sector and its contribution to the economic development
of Bangladesh.
Keywords : RMG, Growth, Contribution, Qualitative and Quantitative Research, Bangladesh.
1.0 Introduction
About 30 million people of Bangladesh are engaged with the RMG sector directly or indirectly. This sector
helps in creating employment, reducing poverty and empowering rural women. Though the primary stage of
the sector was not bright enough, nowadays it is flourishing very rapidly.
The research is based on a developing country like Bangladesh as it has specialization in the area of garments
sector.There are scarcity of research on the growth and contribution of Bangladeshi RMG sector encompassing
both qualitative and quantitative research perspectives. Prior researches only focused either on qualitative
perspective or quantitative perspective. The most lucrative sector of the country is garments industry. Since
the sector contributes 80% of the national GDP(Manik & Bajaj, With Lower Garment-Industry Wages’,
Bangladesh Moves in on China, 2010)and employs 3.5 million people among them 85% are women (BGMEA,
2010), it logically demands research on the growth and contribution of this sector to the national economy
as most of the investors are concerned about the issue(Kamal & Deegan, 2011). However, previous literatures
Wal- Mart, K-Mart, Reebok, Nike, Gap,Tesco, Zara, Li Though there are many of good news, every year
& Fung, H& M are the major popular Multi National many garments workers of Bangladesh die due to
Company customers of Bangladesh from Europe, lack of safety measures and fire accidents. From
USA and other developed countries. The country 1990, around 700 garments workers died because of
has relatively lower labor cost compared to others the fire accidents in different factories of the country
countries (Doshi, 2006).The country has the highest (Pramual, 2010). This kind of loss of lives depicts the
amount garment export among the developing unpreparedness of the garment factories regarding
nations after China and Turkey (Kamal & Deegan, fire accidents (Birchall & Kazmin, 2010). Labor laws
2011). As Corporate Social Responsibility has
6.0 Findings
6.1. Quantitative Analysis
6.1.1 Membership and Employment
Table-1:
Descriptive Statistics of Membership and Employment
Source : Calculated by Author based on data available at (Bangladesh Garment Manufacturers and Exporters Association, 2017)
Table-1 shows the statistical analysis of the membership and employment of Bangladeshi RMG sector from
financial year 1984-85 to financial year 2015-16. This result indicates that the both the number of garment
factories and workers have been increased rapidly throughout the last 3decades.
Source : Calculated by Author based on (Bangladesh Garment Manufacturers and Exporters Association, 2017)
Table-2 describes the statistical analysis of export of RMG and total export of Bangladesh. There are 33
observations from financial year 1983-84 to 2015-16.The contribution of RMG sector to the national export
is about 82.01% and still it is increasing day by day.
Source : Calculated by Author based on (Bangladesh Garment Manufacturers and Exporters Association, 2017)
Table-3 describes the statistical analysis of the main apparel export items from Bangladesh.Total observations
for sweater are 21 and shirt, trouser, jacket, t-shirt are 23 each from financial year 1993-94 to financial year
2015-16. Among them, trousers and t-shirts have generated most of the export revenue for this sector.
Source : Calculated by Author based on (Bangladesh Garment Manufacturers and Exporters Association, 2017)
Table-4 indicates the statistical analysis of the value of total apparel export from financial year 1992-93 to
financial year 2015-16.Woven items are contributing more to the total apparel export for the last 2 decades.
Source : Calculated by Author based on (Bangladesh Garment Manufacturers and Exporters Association, 2017)
Table-5 shows the statistical analysis of Bangladesh’s RMG export to EU for the financial year 2015-16. There
are 27 countries of EU used as observations.The lowest export was to Estonia and the highest export was to
Germany during the FY. It also confirms that EU is the largest export market for Bangladeshi RMG products.
Source : Calculated by Author based on (Bangladesh Garment Manufacturers and Exporters Association, 2017)
6.1.5 Threats
Table-7 : Competitiveness of RMG sector
Factors Bangladesh India Vietnam Pakistan
Minimum Wage $69 $71 $78 $79
Productivity 77% 92% 90% 88%
Bank Interest >16% 8% 13% 7%
From table-7, it is certain that Bangladeshi RMG sector lacks in productivity.This is because of unskilled labor
force. Though the minimum wage rate is lower, the bank interest rate is higher in Bangladesh. If bank interest
rate can be reduced, factory owners can put more money in this sector to ensure skilled labor, quality prod-
uct and sufficient wages to the workers. Thus, productivity can also be improved.
Figure-1 shows that Bangladesh is the second-largest cotton importing countries in the world. This sector is
highly depended on cotton which has to import from outside. If there is sudden problem of cotton shortage,
the sector will have to face a lot of problems. This big problem for the Bangladeshi RMG sector is not to be
self-sufficient in cotton production.
damage this sector in any other ways.” Interviewee Azad, D. M. (2014). Satisfaction of Garments Workers towards Current Salary
Structure in Bangladesh: An Analysis. Dhaka University Journal of Business
#20 also added, “Unrest among the workers, fire Studies, 1-31.