INDIA & PAKISTAN BIGGEST THREAT FOR BANGLADESHI RMG & TEXTILE EXPORT
No hurdles could resist Bangladesh achieving a modest growth in the first six month of the financial year 2013-2014. The country has registered 19.55 % growth in knitwear export and 20.37% growth in woven wear export despite so many political troubles. Amid great internal tension & month long blockade, the sector could keep their momentum going. Countries export growth in July to December hence now comes with a great inspiration for the rest of the year to achieve even more. But that doesn’t seem to be that easy as mainly India & Pakistan are gaining market advantages these days. Recent movements show that India & Pakistan are two biggest threat for Bangladeshi RMG & textile industry.
Currency depreciation in both the country, current wage hike in Bangladesh and EU’s declaration of GSP plus to Pakistan has pulled up India & Pakistan, giving them another competitive edge over their neighbor Bangladesh. Recent reports say that India is also trying to achieve GSP advantages European Union. While GSP facility is given to the countries that have many hurdles and deficiencies for export, India being one of the big economies in the world now asking this facility! India has been allocating big stimulating funds for the textile & RMG sector to safeguard them. The country is also making sure cutting down of interest rate to 3-4 for RMG & textile investment. So, many advantages for India & Pakistan are turning out to be challenging for Bangladesh to maintain the current growth.
Everybody knows how important is the textile & RMG sector for Bangladesh? The sector in deed holds almost the total socio-economic base of the country. Excellent skill and superb resilience of the people of in the sector has made Bangladesh incompatible in producing RMG & textiles. Die hard effort of the workers, owners & management staffs helped the country crossing many big hurdles. The same is happening in improving safety condition of the sector now. Alongside, factories now are going forward for adopting resource efficient & cleaner interventions. Some recent studies show that productivity of Bangladeshi RMG factories is higher than that of India & Pakistan. But such a well-built sector could not really grow as the sector anticipated due to many reasons- most of which are not abnormal for developing countries. Huge infrastructure deficiency, political instabilities, high bank interest, frequent labor insurgency, unexpected accidents; Bangladeshi RMG & textile sector is coping up everything very well. Now the country is to face another big threat from the two big subcontinent countries due to the extra leverages they are gaining.
It is crying need for Bangladesh that the RMG & textile sector sustains and grow and contribute more in poverty alleviation. Bangladesh hardly has any other major way to do that soon. A very big chunk of its population is dependent on the sector. By virtue of the sector their earning and spending power is increasing. As the wage has got another raise last month, people around the sector are getting better shape. On the other hand recent wage hike has emerged as another big challenge for the factory owners. They now realize that they must adopt technologies or interventions those will help them be more resource efficient cutting cost as in most cases buyers are not raising their price. Added market mechanism and leverages of countries like India & Pakistan, helping the buyers putting them in negotiation table that those countries are offering a better price. And so quality and commitment along with better resource utilization should be the things to concentrate more for the Bangladeshi factories to win those negotiations.
JANUARY , 2014 Issue