Garments Industry

Executive Summery Bangladesh is a tropical country in South Asia that is situated in the delta of two major rivers that flow down from the Himalayas (the Ganges and the Jamuna). The country’s land surface is therefore largely composed of alluvial silt, rendering the soil highly fertile. Historically, this has made Bangladesh an agricultural nation; although agriculture contributes only about a fifth of the national GDP, it employs three-fifths of the labor force (ADB, 2005). Bangladesh has an estimated population of 140 million (circa 2005), living in an area of about 55,000 square miles. In spite of numerous constraints, the economy has been on a steady growth path for the last 15 years, mainly due to private sector dynamism. Since 1990, it has grown at an average rate of 5% per year. The Asian Development Bank projects that real GDP growth will increase to 6% in 2006 and 2007 (ADB, 2005). Bangladesh’s total GDP stood at $275 billion in 2004, and per capita GDP was $2,000 (adjusted for purchasing power). The ready made garments industry started in our country as a non-tradition sector with a narrow export rise in the late 1970s.

The garments industry enjoyed a tremendous rise of 30 enterprises in 1980 increase to about 4825 on 2007-08 fiscal year. Out of 3.1 million manpower employed in factories, 2.38 million are women (85%), majorities of them are disadvantaged and economically poverty stricken women folk. The country’s RMG sector, to a creditable level has relieved Bangladesh from over populous unemployment burden through providing the largest employment next to agriculture, transport, trade and industry sector. This sector has uplifted the largest employment next to agriculture, transport, trade and industry sector.

At present the garments sector is running well. After removal of quota system the industry faced more completion than any time issued the export policy 2006-2009 and give the facilities to garments industries and recently government announces the incentives which accelerate the sector. Still this garments sector earn the foreign exchange significantly.

Garment industries started working from the late 1970’s. At present there are about 3000 garment industries in the country and 75 percent of them are in Dhaka. The rest are in Chittagong and Khulna. The prime reason why garment industries have come out to be the champion in the field of export is obviously the cheap labor. Labor is not as cheap anywhere in the world as it is in Bangladesh. Women contribute to the working force in these garment factories, as they are relatively cheaper than men. It has given them a steady income, economic independence, self-reliance and dignity, because they are earning their own living and managing their family expenses.

The growth trend of garments industry is positive. Over the last twelve years the garments industry have emerged as the largest source of earning foreign currency. The garments industry face the quota system which was a challenges for this sector. The present market is the garment sector in USA, Canada, Japan, Australia, New Zealand and Russia. The market is expanding in the middle east and other countries. Garments industry requires labor force to operate. In our country we have the labor forces in millions due to abundance labor forces this sector will increase the growth day by day.

Introduction: Bangladesh is a tropical country in South Asia that is situated in the delta of two major rivers that flow down from the Himalayas (the Ganges and the Jamuna). The country’s land surface is therefore largely composed of alluvial silt, rendering the soil highly fertile. Historically, this has made Bangladesh an agricultural nation; although agriculture contributes only about a fifth of the national GDP, it employs three-fifths of the labor force (ADB, 2005). Bangladesh has an estimated population of 140 million (circa 2005), living in an area of about 55,000 square miles. It thus has the unwanted distinction of being the world’s most densely populated country, and this overpopulation is at the root of many of Bangladesh’s socioeconomic problems. However, the population is largely homogeneous in terms of ethnicity, language, and religion, and this provides a valuable element of national cohesion.
In spite of numerous constraints, the economy has been on a steady growth path for the last 15 years, mainly due to private sector dynamism. The constraints include pervasive political instability and violence, endemic corruption and disregard for the law, frequent natural disasters, inefficient state-owned enterprises that are hotbeds of trade unionism, lack of political will to carry through necessary economic reform, inadequate infrastructure at all levels (power generation, roads and highways, port facilities), etc. Nevertheless, the economy has proved to be resilient. Since 1990, it has grown at an average rate of 5% per year. The Asian Development Bank projects that real GDP growth will increase to 6% in 2006 and 2007 (ADB, 2005). Bangladesh’s total GDP stood at $275 billion in 2004, and per capita GDP was $2,000 (adjusted for purchasing power). The below lists some key macroeconomic indicators for the period 2004-2006: Spectrally, services constitute the largest portion of GDP with 51.7%. Industry accounts for 27.1% and agriculture 21.2%. However, the distribution of the labor force is reversed, with most people still working in agriculture (61%), followed by services (27%) and finally industry (12%). This imbalance between output and employment is indicative of a large amount of “disguised” unemployment and underemployment. Unemployment (including underemployment) is estimated to be about 40%. The poverty rate, as of 2004, is about 45%.

As shown by the above list, merchandise exports have been growing strongly in recent years and this trend is set to continue. While imports also exhibit strong growth, it should be noted that the bulk of imports consists of inputs into the production process, e.g. machinery and equipment, fuel and petroleum products, chemicals, iron and steel, cement, fabric and accessories (for garments production), etc.

As can be seen from list, garments and textile items are the dominant export product, accounting for 77% of the country’s total export receipts. This is a relatively new phenomenon. The major industries of our country is Jute, Sugar, Paper, Textile, Fertilizer, cigarette, cements, Steel, Natural gas, Oil refinery, news print, Power generation, Garments etc. Although Bangladesh is not developed in industry, it has been enriched in Garment industries in the recent past years. In the field of industrialization garments industry is a promising step. It has given the opportunity of employment to millions of unemployed. Specially innumerable uneducated women of the country. It is making significant contribution in the field of our export income. Ready made garments is the leading sector of Bangladesh in terms of employment, production and foreign exchange earning. Garments sector earned 78% of the yearly foreign exchange earning of the country.

The Past History of Garments Industry:

The ready made garments industry started in our country as a non-tradition sector with a narrow export rise in the late 1970s.

The garments industry enjoyed a tremendous rise of 30 enterprises in 1980 increase to about 4825 on 2007-08 fiscal year. The growth of the industry in terms of number of units and employment generation is given below:

|Year |Number of Garment Factories |Employment in Million Workers |
|1983-84 |134 |0.040 |
|1984.85 |384 |0.115 |
|1985-86 |594 |0.198 |
|1986-87 |629 |0.283 |
|1987-88 |685 |0.306 |
|1988-89 |725 |0.317 |
|1989-90 |759 |0.335 |
|1990-91 |834 |0.402 |
|1991-92 |1163 |0.582 |
|1992-93 |1537 |0.804 |
|1993-94 |1839 |0.827 |
|1994-95 |2182 |1.200 |
|1995-96 |2353 |1.290 |
|1996-97 |2503 |1.300 |
|1997-98 |2726 |1.500 |
|1998-99 |2963 |1.500 |
|1999-2000 |3200 |1.600 |
|2000-2001 |3480 |1.800 |
|2001-2002 |3618 |1.800 |
|2002-2003 |3760 |2.000 |
|2003-2004 |3957 |2.000 |
|2004-2005 |4107 |2.000 |
|2005-2006 |4220 |2.200 |
|2006-2007 |4490 |2.400 |
|2007-2008 |4743 |2.800 |
|2008-2009 |4825 |3.100 |

Out of 3.1 million manpower employed in factories, 2.38 million are women (85%), majorities of them are disadvantaged and economically poverty stricken women folk. The country’s RMG sector, to a creditable level has relieved Bangladesh from over populous unemployment burden through providing the largest employment next to agriculture, transport, trade and industry sector. This sector has uplifted the largest employment next to agriculture, transport, trade and industry sector. This sector has uplifted the neglected section of the population, thus radically transforming the socio-economic condition of the country. Such empowerment and employment raised awareness regarding children education, health safety, population control disaster management only so for. It is an epoch making event in the history of Bangladesh.

The Present situation of Garments Industry:

At present the garments sector is running well. After removal of quota system the industry faced more completion than any time issued the export policy 2006-2009 and give the facilities to garments industries and recently government announces the incentives which accelerate the sector. Still this garments sector earn the foreign exchange significantly.

After the emergence of Bangladesh radical change has come to our garment sector. Garment industries started working from the late 1970’s. At present there are about 3000 garment industries in the country and 75 percent of them are in Dhaka. The rest are in Chittagong and Khulna. These Industries have employed fifty lacks of people and 85 percent of them are illiterate rural women. About 76 percent of our export earning comes from this sector.

Reason of Development:

The prime reason why garment industries have come out to be the champion in the field of export is obviously the cheap labor. Labor is not as cheap anywhere in the world as it is in Bangladesh. Women contribute to the working force in these garment factories, as they are relatively cheaper than men. A worker works here long hour’s free or cheap meals. But this has not prevented thousands of women from work. It has given them a steady income, economic independence, self-reliance and dignity, because they are earning their own living and managing their family expenses.

Garments of Bangladesh in the world-market:

Over the last twelve years or so the garments industries have emerged as the largest source of earning foreign currency. About half of the foreign currency from the ready-made garments is earned from European Union and the U.S.A. Besides, Canada, Japan, Australia, New Zealand; Russia etc. also are other garments importing countries. At present about 20 countries of the world are importers of our garments. Its market is being expanded in the Middle East, Russia, Japan, Australia and many other countries.
Export income of different fiscal years: In 1977-78 fiscal year Bangladesh exported forty thousand shirts in Germany and earned one million U.S. dollar. At the beginning of the 80's this industry flourished rapidly. In 1983-84 fiscal year the income from garments rose to 6 crores 50 lacs US dollar. In 1998-99 it became 420 crores U.S. dollar. By 2003-2004 the factories multiplied three times. Simultaneously the export has also increased. The amount of export income in 2003-2004 increased to 568 crores US dollar. Items of exportable garments: Among the garments of Bangladesh are shirt, pajama, jeans-pant, jacket, trouser, hats, laboratory coat, sweater, pullover, jumper, jacket, trousers, gloves, sports dress, nightdress etc.
The Future situation of Garments Industry:

The growth trend of garments industry is positive. Over the last twelve years the garments industry have emerged as the largest source of earning foreign currency. The garments industry face the quota system which was a challenges for this sector. The present market is the garment sector in USA, Canada, Japan, Australia, New Zealand and Russia. The market is expanding in the middle east and other countries. Garments industry requires labor force to operate. In our country we have the labor forces in millions due to abundance labor forces this sector will increase the growth day by day.
Conclusion:
In the case of Bangladesh it is clear that impediments to exports worsen the financial stability of poor people. The evidence from the garments sector suggests that relying on trade or foreign investment alone is not enough to improve the condition of poor people of Bangladesh. The poor need education, improved infrastructure, ability to relocate out of contracting sectors into expanding ones. Apologists for capitalist globalization claim that they are bringing jobs and economic development when they chase low wages throughout the developing world. Instead it destroyed many rural based economies and agricultures, driving millions off their land. This is a pattern repeated by all the so-called free trade agreements.