Agglomeration in Dhaka: How does Read Made Garment (RMG) industry make Dhaka the fastest growing city of the world?
Written by: Md Masud Karim
In a sunny day of last summer, I was shopping with my German friend in one outlet of H&M in Budapest and suddenly she shouted “Oh My God! This T-shirt is too cheap! Masud, you see it is from your country”. There is no doubt that the magical role of Ready Made Garment (RMG) industry in the agglomeration of Dhaka, the capital of Bangladesh, is more surprising.
Between 1990 to 2005, Dhaka, the fastest growing city on the earth, doubled in number- from 6 million to 12 million. According to United Nations, Dhaka which is the residence of 17 million people by 2011 will be the home of more than 20 million by 2025. It is well known that massive migration, high birth rate and new experience of free international trade are swelling cities in developing world; however, these factors are perhaps more strongly intense in Dhaka than anyplace in the world. Thanks to the concentrations of export oriented textile industry in Dhaka, which starts in 1980s and flourished in last thirty years, and thus created this massive agglomeration.
The RMG sector of Bangladesh has experienced a dramatic growth in last three decades. At present, Bangladesh ranks the third largest garment exporter after China and Turkey in the world. Before 1980, the country’s RMG industry’s role was mainly import substitution; hence, was not subject to export limit under the Multi-Fiber Arrangement (MFA). This opportunity did not escape the attention of Daewoo Corporations of South Korea, one of the largest RMG manufacturers losing from quota system. Without making delay, Daewoo teamed up with a Dhaka based new enterprise Desh Ltd. in 1979.
Knowledge and technological spillovers seems to be the first cause of RMG industry development in Dhaka. In 1979, Desh sent 130 new employees to Daewoo’s factory in South Korea, where they...
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