Dhaka, Thursday, 30 June 2022

Bangladesh’s RMG industry moves forward at its own pace      

Bangladesh’s RMG industry moves forward at its own pace

The contribution of the readymade garment (RMG) industry in the national economy of Bangladesh is immense. The RMG industry has become the backbone of Bangladesh’s economy as a result of its continuous contribution since its inception. Based on the cheap and easily available labour market, Bangladesh’s RMG industry is moving forward fighting against all domestic and international obstacles.

On January 1, 2005, the industry emerged with its growth in the quota-free world. At that time, the entrance of the industry in the quota-free world was a big challenge and many owners were worried about the future of it. But the dedicated efforts of the owners of the industry created an encouraging situation by increasing its export market. Thus our RMG industry has survived successfully.

The lifeline of the national economy of Bangladesh is RMG industry which was started in the FY 1976-77 with only US$ 0.006 million export which then increased steadily to US$ 886.82 million in the FY 1990-91. In FY 1992-93, RMG exports rose to US$ 1445 million. Then Bangladesh’s RMG industry did not have to look back. The amount of RMG exports is constantly increasing. RMG exports stood at US$ 19,089.73 million in FY 2011-12 with an increase of US$ 21,515.73 million in FY 2012-13.

According to the World Trade Organization, Bangladesh's market share in apparel exports in 2019 was 6.80 per cent. In the previous year 2018, the share was 6.40 per cent. In 2019, among the top five countries in the RMG export market, China shared with 30.8 per cent while Bangladesh with 6.80 per cent, Vietnam with 6.20 per cent, India with 3.5 per cent and Turkey with 3.2 per cent. The RMG industry started its journey in 1976 with only 0.001 per cent of the national exports. This continuity of the industry continues to grow.

According to Bangladesh Garments Manufacturer and Exporter Association (BGMEA), the number of workers employed in the RMG industry is 4 million. Of which 56 per cent or 2.6 million are women. This number is 36 per cent of the total employment in the country. The contribution of the RMG industry to the GDP of Bangladesh is 16 per cent and to the foreign remittance earnings is 83 per cent. Apart from employing thousands of unemployed and helpless women in the country, the RMG industry is playing an important role in the development of our economy.

The RMG industry hit hard by COVID-19 pandemic last year. Apart from that, the industry is facing multiple problems including reduction and cancellation of export orders and others. According to the International Labour Organization (ILO), 3.3 billion people could lose their jobs due to COVID-19. According to the latest survey by the Bangladesh Bureau of Statistics (BBS), the number of educated unemployment in the country is 2.6 million. However, according to the ILO, about 48.2 million people in the country are unemployed. The number of unemployment is constantly increasing due to the effect of COVID-19. According to the Export Promotion Bureau (EPB), due to the impact of the COVID-19, buyers cancelled orders for worth about US$ 3.5 billion of RMG, Bangladesh's main export sector.

In the outgoing FY, the target for the export income of the RMG industry was set at US$ 3,820 crore. In contrast, the income was US$ 2,794.91 crore. Which is 27 per cent less than the target. According to BGMEA, 348 of its member factories have been shut down due to COVID-19. Besides, several factories are continuing to fight for survival. According to the BBS survey, 33.15 lakh people are employed in the RMG industry. In the COVID-19, the companies are deciding to survive by laying off workers. As a result, a large number of hard-working people of the industry are becoming unemployed which has become the biggest concern now.

The top nine RMG exporting countries from Bangladesh are Germany, United States, United Kingdom, Spain, Netherlands, Canada, Belgium, France and Italy. Due to the global COVID-19 pandemic, Bangladesh’s RMG export has decreased in those countries. According to a recent report of Bangladesh Bank, the highest export of RMG from Bangladesh to Germany in the three months from January to March of 2020 was US$ 146.20 crore. In the next three months, from April to June of 2020, RMG export was worth US$ 67.90 crore. So, the export has decreased by US$ 78.24 crore. The United States, the second-largest exporter of garments, exported US$ 139.69 crore in the first three months (January-March 2020).

In the next three months (April-June 2020), only US$ 77 crore was exported. So, the export has decreased by US$ 62.65 crore. Meanwhile, according to the EPB, 2020-2021(July-January), Bangladesh's RMG export performance is US$ 18,407.73 million. This dark shadow of Bangladesh's RMG industry will not stay long and it will be disappeared very quickly.