Bangladesh Garments

Topics: International trade, Gross domestic product, Economy of Bangladesh Pages: 91 (27580 words) Published: February 13, 2011

Bangladesh’s recent export performance in the world market for readymade garment has improved markedly. In this study, Constant Market Share Analysis is used in order to determine the competitiveness of Bangladesh and its competitors, which are the main readymade garment producers, in the USA, UK.CANADA AND ALL others markets between 1989 and 1998 periods. Constant Market Share (CMS) analysis is a popular tool for analyzing changes in exports of a country. Nevertheless, its theoretical foundations (and policy relevance) have been questioned. In this paper, we provide such a foundation by relating CMS analysis of export growth. An indication of the empirical relevance of this relationship is given by comparing the CMS analysis. The analysis reveals this improvement to be predominantly the result of competitive advantages of ready made garment industry . Bangladesh is able to export s readymade garment of high and consistent quality at low costs, under conditions which meet the world standards set by the world. In addition to competitive advantages, Bangladesh has benefited from growth in the overall size of the world export market for readymade garment, but has suffered from having only relatively small shares in the important markets of some member States. Market research on consumers’ demand and preferences could further improve Bangladesh’s recent export performance of readymade garment.

Keywords: Bangladesh, Competitiveness, Constant Market Share Model. Ready made Garment.



Bangladesh economy experienced a trend rate of growth of 4.8 per cent during 1990s as against 4.4 per cent during the previous decade. The rate of growth of per capita GDP has also been impressive during the 1990s. In addition to the higher growth rate of overall GDP, this was facilitated by a sharp fall in the rate of growth of population. During the 1980s, population grew at an annual compound rate of 2.2 per cent, and the rate of growth of per capita GDP was recorded at 1.7 per cent per annum. In contrast, population growth rate came down to 1.7 per cent during the 1990s.Per capita GDP grew at an annual compound rate of 3.3 per cent during the 1990s.However, in terms of the absolute level of per capita income, Bangladesh continues to remain at the lower end of the income scale. Per capita income of US$370 compares unfavorably against the low-income country average of US$410.During 1990s, Bangladesh's total exports in current US$ value grew at an annual compound rate of 14.4 per cent. In fact, Bangladesh experienced double digit export growth in most of the years during the 1990s. Imports, on the other hand, grew at an annual compound rate of 10.9 per cent during 1990s. The gap between export and import widened from -US$1792 million in 1990/91 to -$2814 million in 1999/00, although the share of export earnings in import payments steadily rose from 31 per cent in 1980/81 to 67 per cent in 1999/00. The openness of the economy as measured by total external trade as a proportion of GDP went up from around 22 percent in 1990/91 to nearly 30 per cent in 1999/00 with the share of export in GDP rising from 7 per cent to 12 percent during the same period. The structure of export has changed significantly over the past two decades. Bangladesh seems to have made the transition from resource-based to process-based exports. In 1980/81, primary commodity constituted nearly 29 per cent of total exports. In 1990/91, this share came down to 17.8 per cent and further down to 8.2 per cent in 1999/00. There has been shift from jute-centric to garments-centric export. In 1980-81, raw jute and jute goods together constituted 68 percent of total exports. Between 1980/81 and 1999/00, export of both raw jute and jute products declined in absolute terms and their total share came down to only 6 per cent in 1999/00. In contrast, woven and knit garments together accounted for less than 1 per...
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