Overview of Bangladesh Garment Business

Agriculture, because the case in India, has been the spine of economic system and chief supply of revenue for the individuals of Bangladesh, the nation manufactured from villages. Authorities needs to lower poverty by getting highest productiveness from agriculture and obtain self-reliance in meals manufacturing. Other than agriculture, the nation is way involved concerning the development of export division. Bangladesh have accelerated and adjusted her exports considerably occasionally. After Bangladesh got here into being, jute and tea had been essentially the most export-oriented industries. However with the continuous perils of flood, failing jute fibre costs and a substantial decline in world demand, the function of the jute sector to the nation’s economic system has deteriorated (Spinanger, 1986). After that, focus has been shifted to the operate of manufacturing sector, particularly in garment business.

The garment business of Bangladesh has been the important thing export division and a foremost supply of overseas alternate for the final 25 years. At current, the nation generates about $5 billion price of merchandise every year by exporting garment. The business supplies employment to about three million employees of whom 90% are girls. Two non-market parts have carried out an important operate in confirming the garment business’s continuous success; these parts are (a) quotas beneath Multi- Fibre Arrangement1 (MFA) within the North American market and (b) particular market entry to European markets. The entire process is strongly associated with the pattern of relocation of manufacturing.

Displacement of Manufacturing within the Garment Business

The worldwide economic system is now managed by the switch of manufacturing the place corporations of developed nations swing their consideration to creating nations. The brand new illustration is centred on a core-periphery system of manufacturing, with a relatively small centre of everlasting staff coping with finance, analysis and improvement, technological establishment and modernisation and a periphery containing dependent parts of manufacturing process. Decreasing prices and rising output are the principle causes for this disposition. They’ve found that the only option to undercharge is to maneuver manufacturing to a rustic the place labour cost and manufacturing prices are decrease. Since creating nations present areas that don’t impose prices like environmental degeneration, this follow protects the developed nations towards the problems of atmosphere and regulation. The switch of manufacturing to Third World has helped the enlargement of economic system of those nations and in addition pace up the economic system of the developed nations.

Garment business is managed by the switch of manufacturing. The globalisation of garment manufacturing began earlier and has expanded greater than that of every other manufacturing unit. The businesses have transferred their blue-collar manufacturing actions from high-wage areas to low-cost manufacturing areas in industrialising nations. The enhancement of communication system and networking has performed a key function on this improvement. Export-oriented manufacturing has introduced some good returns to the industrialising nations of Asia and Latin America because the 1960s. The primary relocation of garment manufacturing passed off from North America and Western Europe to Japan within the 1950s and the early 1960s. However throughout 1965 and 1983, Japan modified its consideration to extra profitable merchandise like vehicles, stereos and computer systems and due to this fact, 400,000 employees had been dismissed by Japanese textile and clothes business. In influence, the second inventory switch of garment manufacturing was from Japan to the Asian Tigers – South Korea, Taiwan, Hong Kong and Singapore in 1970s. However the tendency of switch of producing didn’t stay there. The rise in labour cost and activeness of commerce unions had been in proportion to the enhancement in economies of the Asian Tigers. The business witnessed a 3rd switch of producing from 1980s to 1990s; from the Asian Tigers to different creating nations – Philippines, Malaysia, Thailand, Indonesia and China particularly. The 1990s have been led by the ultimate group of exporters together with Bangladesh, Srilanka, Pakistan and Vietnam. However China was chief within the present of the relocation as in lower than ten years (after 1980s) China emerged from nowhere to change into the world’s main producer and exporter of clothes.

Bangladesh Garment Sector and International Chain

The reason for this switch may be clarified by the wage construction within the garment business, everywhere in the world. Attire labour cost per hour (wages and fringe advantages, US$) in USA is 10.12 however it is just 0.30 in Bangladesh. This distinction accelerated the world attire exports from $three billion in 1965, with creating nations making up simply 14 % of the entire, to $119 billion in 1991, with creating nations contributing 59 %. In 1991 the variety of employees within the ready-made garment business of Bangladesh was 582,000 and it grew as much as 1,404,000 in 1998. In USA, nonetheless, 1991-figure confirmed 1,106.Zero thousand employees within the attire sector and in 1998 it turned right down to 765. eight thousand.

The introduced info reveals that the tendency of low labour fees is the important thing cause for the switch of garment manufacturing in Bangladesh. The follow initiated in late 1970s when the Asian Tiger nations had been in quest of techniques to keep away from the export quotas of Western nations. The garment models of Bangladesh are primarily counting on the ‘tiger’ nations for uncooked supplies. Mediators in Asian Tiger nations construct an middleman between the textile models of their house nations, the place the spinning and weaving go on, and the Bangladeshi models the place the material is lower, sewn, ironed and packed into cartons for export. The identical representatives of tiger nations uncover the marketplace for Bangladesh in a number of nations of the North. Massive retail buying and selling corporations positioned in the US and Western Europe give most orders for Bangladeshi garment merchandise. Corporations like Marks and Spencers (UK) and C&A (the Netherlands) management capital funds, in proportion to which the capital of Bangladeshi house owners is endurance. Shirts manufactured in Bangladesh are bought in developed nations for 5 to 10 occasions their imported value.

Collaboration of a local non-public garment business, Desh Firm, with a Korean firm, Daewoo is a crucial occasion of worldwide garment chain that works as one of many grounds of the enlargement of garment business in Bangladesh. Daewoo Company of South Korea, as a part of its world insurance policies, took curiosity in Bangladesh when the Chairman, Kim Woo-Choong, supplied an aspiring three way partnership to the Authorities of Bangladesh, which included the expansion and strategy of tyre, leather-based items, and cement and garment factories. The Desh-Daewoo alliance was decisive when it comes to stepping into the worldwide attire markets at vital juncture, when import reforming was happening on this market following the signing of MFA in 1974. Daewoo, a South Korean main exporter of clothes, was looking for alternatives in nations, which had hardly used their quotas. As a result of quota restriction for Korea after MFA, the export of Daewoo grew to become restricted. Bangladesh as an LDC bought the possibility to export with none constraint and for this trigger Daewoo was involved with using Bangladesh for his or her market. The aim behind this want was that Bangladesh would depend on Daewoo for importing uncooked supplies and on the identical time Daewoo would get the market in Bangladesh. When the Chairman of Daewoo displayed curiosity in Bangladesh, the nation’s President put him in contact with chairman of Desh Firm, an ex-civil servant who was looking for extra entrepreneurial pursuits.

To fulfil this want, Daewoo signed a collaboration contract with Desh Garment for 5 years. The contract additionally integrated the fields of technical coaching, buy of equipment and material, plant institution and advertising in return for a selected advertising fee on all exports by Desh throughout the contract part. Daewoo additionally imparted an exhaustive sensible coaching of Desh staff within the working environment of a multinational firm. Daewoo keenly helped Desh in shopping for equipment and materials. Some technicians of Daewoo arrived Bangladesh to determine the plant for Desh. The top results of the affiliation of Desh-Daewoo was essential. Within the first six years of its enterprise, i.e. 1980/81-86/87, Desh export worth elevated at an annual common price of 90%, reaching greater than $5 million in 1986/87.

It’s claimed that the Desh-Daewoo alliance is a major ingredient for the expansion and achievement of Bangladesh’s whole garment export business. After getting linked with Daewoo’s model names and advertising community, abroad patrons went on with shopping for clothes from the company heedless of their origin. Out of the opening trainees most left Desh Firm at a number of occasions to erect their very own competing garment corporations, labored as a manner of transferring data all by way of the entire garment sector.

It’s important to establish the outcomes of the method of transferring manufacturing from excessive pay to low pay nations for each creating and developed nations. It’s a naked incontrovertible fact that many of the Third World nations are actually on the best way to industrialisation. On this process, employees are working beneath unfavourable working atmosphere – minimal wages, unhealthy place of business, lack of safety, no job assure, pressured labour and so forth.

The route of globalisation is filled with ups and downs for the creating nations. Relocations of comparatively cellular, blue-collar manufacturing from industrialized to creating nations, in some circumstances, can have troublesome results on social life if – within the absence of environment friendly planning and talks between worldwide organisations and the federal government and/or organisations of the host nation – the transferred motion encourages urban-bound relocation and its span of keep is brief. One other adverse result’s that the rise in employment and/or revenue is just not anticipated to be satisfactorily giant and in depth to minimize inequality. In reference to the adverse outcomes of relocation of producing on employment in developed nations, we understand that in comparatively blue-collar industries, the rising imports from creating nations result in unavoidable losses in employment. It’s held that improvement of commerce with the South was a major cause of the disindustrialisation of employment within the North over previous few a long time.

In spite of everything staff who’re consistently working beneath unfavourable circumstances need to bear the brunt. Work is under-control throughout the Bangladesh garment sector. Appalling working environment has been delivered to gentle within the Bangladesh garment business.

A analysis reveals that 90 % of the garment staff went by way of sickness or illness throughout the month earlier than the interviews. Headache, anaemia, fever, chest, abdomen, eye and ear ache, cough and chilly, diarrhoea, dysentery, urinary tract an infection and reproductive well being issues had been extra widespread ailments. The garment factories gave bonus of various ailments to the staff for working. With a view to discovering out a hyperlink between these ailments and industrial threats, well being standing of staff has been examined earlier than and after coming within the garment work. On the finish of examination, it was come out that about 75 % of the garment workforce had sound well being earlier than they entered the garment manufacturing unit. The explanations of well being declines had been industrial threats, unfavourable working atmosphere, and need of employees amenities, rigid phrases and circumstances of garment employment, office strain, and low wages. Totally different work-related threats and their affect on well being pressured staff to depart the job after few months of becoming a member of the manufacturing unit; the typical size of service was solely four years.

The garment sector is disreputable for fires, that are stated to have claimed over 200 lives previously two years, although actual figures are robust to seek out. A stunning occasion of absence of office security was the fireplace in November 2000, through which nearly 50 employees misplaced their lives in Narsingdi as exist doorways had been closed.

From the above evaluation of working environment of garment sector, we will state that the working atmosphere of many of the Third World nations, notably Bangladesh remind us of earlier improvement of garment industries within the First World nations. The state of employment in lots of (not essentially) textiles and clothes models within the creating nations take us again to these arrange within the nineteenth century in Europe and North America. The mistreatment of garment staff within the delivery interval of the event of US garment factories reviewed above is kind of identical because it seen now within the Bangladesh garment business. Can we state that garment staff of the Third World nations residing within the 21st century? Is it a return of the Sweatshop?

In a manner, the Western corporations are responsible of pitiable working environment within the garment sector. The developed nations wish to make extra revenue and due to this fact, power the creating nations to chop down the manufacturing price. With a view to survive within the competitors, many of the creating nations choose immoral practices. By introducing rigid phrases and circumstances within the enterprise, the worldwide economic system has left few alternate options for the creating nations.

Proper Time to Make a Determination

There are two alternate options to deal with the problem of the aggressive world initiated by the continual strain of world garment chain. One can live on within the competitors by adopting time-honoured work techniques or immoral practices. However it’s unsure how lengthy they will live on. In reference to the garment business of Bangladesh, we will say that that is the precise time to observe a aggressive coverage, which improves high quality. If the MFA alternatives are eradicated, will or not it’s possible to maintain the competitiveness by way of low-wage-female labour or by way of additional drop in feminine wages? Presumably not. For the reason that labour fees are so minimal that with such wage, a employee is just not in a position to preserve even a household of two members. Enhancing the effectivity of feminine employees is the one answer to elevated competitors. Correct schooling and thorough coaching may also help obtain these optimistic outcomes. To rule the worldwide market, Bangladesh has to return out of low wage and low output advanced within the garment business. Bangladesh can improve labour output by way of fixed coaching, use of upgraded expertise and higher working atmosphere. Bangladesh ought to plan a technique supposed for selling ability improvement, rushing up expertise switch and enhancing productiveness top of the employees.

One other methodology is to undertake finest system or moral course. These corporations, which react to heightened competitors by stressing high quality, speedy reply of the shoppers, truthful practices for labourers ought to have essentially the most progressive practices. We expect that we are actually residing within the age of competitors in producing improved high quality over cost-reduction coverage. The target of change efforts on the office has been modified over the time – from making the job humane within the 1960s, to job satisfaction and output in 1970s, to high quality and competitiveness within the 1980s. It’s vital for a corporation to pursue a aggressive coverage that improves high quality, flexibility, innovation and buyer care. In the event that they depend on low prices by dropping labourers’ wages and different companies, they are going to be bereaved of labourers’ dedication to work.


. Appreciable Certified/eager to study workforce out there at low labour fees. The advisable minimal common wages (which embrace Travelling Allowance, Home Lease, Medical Allowance, Maternity Profit, Competition Bonus and Extra time Profit) within the models inside the Bangladesh Export Processing Zones (BEPZ) are given as under; alternatively, outdoors the BEPZ the wages are about 40% decrease:

. Power at low value

. Simply accessible infrastructure like sea street, railroad, river and air communication

. Accessibility of basic infrastructure, which is about three decade outdated, primarily established by the Korean, Taiwanese and Hong Kong Chinese language industrialists.

. FDI is legally permitted

. Reasonably open Financial system, notably within the Export Promotion Zones

. GSP beneath EBA (The whole lot However Arms) for Least Developed Nation relevant (Obligation free to EU)

. Improved GSP benefits beneath Regional Cumulative

. Wanting ahead to Obligation Free Extra to US, talks are on, and seem like on hopeful observe

. Funding assured beneath International Personal Funding (Promotion and Safety) Act, 1980 which secures all overseas investments in Bangladesh

. OPIC’s (Abroad Personal Funding Company, USA) insurance coverage and finance agendas operable

. Bangladesh is a member of Multilateral Funding Assure Company (MIGA) beneath which safety and security measures can be found

. Adjudication service of the Worldwide Centre for the Settlement of Funding Dispute (ICSID) supplied

. Glorious Tele-communications community of E-mail, Web, Fax, ISD, NWD & Mobile companies

. Weak spot of foreign money towards greenback and the situation will persist to assist exporters

. Financial institution curiosity@ 7% for financing exports

. Comfort of obligation free customized bonded w/home

. Readiness of recent models to reinforce techniques and create infrastructure accordant with product development and quick reactions to circumstances

Weak spot

. Lack of selling techniques

. The nation is poor in creativity

. Absence of simply on-hand center administration

. A small variety of manufacturing strategies

. Low acquiescence: there’s a world strain group to compel the native producers and the federal government to implement social acquiescence. The US GSP could also be cancelled and buying from US & EU could lower considerably

. M/c development is critical. The equipment required to evaluate add on a garment or improve competence are lacking in most industries.

. Lack of coaching organizations for industrial employees, supervisors and managers.

. Autocratic strategy of practically all of the traders

. Fewer course of models for textiles and clothes

. Sluggish backward or ahead mixing process

. Incompetent ports, entry/exit difficult and loading/unloading takes a lot time

. Pace cash tradition

. Time-consuming customized clearance

. Unreliable dependability concerning Supply/QA/Product data

. Communication hole created by incomplete data of English

. Topic to pure calamities


. EU is prepared to determine business in a giant manner as an choice to china notably for knits, together with sweaters

. Bangladesh is included within the Least Developed International locations with which US is dedicated to reinforce export commerce

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

. If expert technicians can be found to instruct, prearranged garment is an possibility as a result of labour and vitality price are cheap.

. Basis clothes for Girls for the FDI promise is critical as a result of each, the technicians and extremely developed equipment are important for higher competence and output

. Japan to be noticed, as conventionally they buy handloom textiles, house furnishings and clothes. This part may be inspired and expanded with continued progress in high quality


. The exporters have to organize themselves to reap the benefits supplied by the alternatives.

Source by Gaurav Doshi

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