Bangladesh Defense Forum
- Copy to clipboard
- Thread starter
- #241
Country's RMG industry at a crossroads
Sarker Nazrul Islam
Published :
Jan 31, 2025 23:02
Updated :
Jan 31, 2025 23:02
The prevailing volatile situation in the global arena of apparel business has left two options for Bangladesh: either it retains its position as an important apparel hub by boosting its production capacity up to the requirement of buyers or gives room to others competing countries. At a time when Western brands are searching for cheaper sources of apparels as part of their push for moving away from China, the course of action the country's readymade garment sector takes can make or unmake their future. The importers are doing so because of labour cost rise in that country and tariff hike on Chinese exports as an outcome of the Sino-US trade war. This brings a great opportunity for Bangladesh to reinvigorate the sector and there is real ground for its expansion. The apparel sector in Bangladesh has a long history of robust growth since its inception, during which it stayed competitive in the world arena. Even in the tumultuous year of July-August uprising it remained on a healthy growth path with a double-digit expansion rate. But it is a question whether it will be able to reap benefits from the ongoing changes in sourcing.
When such is the dilemma, a report from the Quality Inspection Management (QIMA) published a week ago came with a mixed bag of hope and uncertainty for Bangladesh's RMG sector. On the one hand, as QIMA thinks, Bangladesh's apparel industry may benefit from Western brands' move away from China and US administration's imposition of higher tariff on Vietnamese products considering the country a 'middleman' for China's business. However, beside this prospective note, QIMA alleges a rise in work hour and wage related labour rights violations in Bangladesh.
Though Western brands still see China as a reliable source to build up a buffer stock of China-made apparels to minimise disruption amidst the trade war between two economic giants, the European and US buyers continue search for cheaper alternative sources. A QIMA survey finds that some 67 per cent of EU-based businesses have already started sourcing from countries other than China. In this connection, it can be examined to see how far Bangladesh is ready to reap benefits from the current state of affairs.
Bangladesh with an extensive network of apparel industries, a strong contingent of skilled workers and the professional expertise has a great chance of profiting from the current situation by way of getting more orders diverted to it. But to achieve it, the stakeholders in the country's RMG sector must pursue aggressive market expansion policies. They should also make optimum utilisation of the existing tranquil socio-political environment in the aftermath of the July mass uprising. The RMG sector must also strengthen its capacity and make utmost efforts to win confidence of foreign brands. This is how Bangladesh's apparel sector can get a large share of the pie.
The on-going situation indicates the possibility for Bangladesh to maintain an edge over its rivals. But nothing is easy and free from challenges in this highly competitive world. Bangladesh will have to triumph over its rivals to hold on to its position. Vietnam and India are the strongest rivals of Bangladesh in grabbing a share of the global RMG market likely to be vacated by China. Pakistan and Sri Lanka are rising challengers for the country. While India's apparel exports in last September increased by over 17 per cent, Pakistan and Sri Lanka enjoyed a rise in orders last year.
Bangladesh has more things to be worried about. Some of Bangladesh's garment factories have recently closed operations in the wake of strong workers movement over wage related issues. Some other factories failed to pay their workers in time. Then, there are also the compliance problems.
These are real challenges for Bangladesh's RMG sector. But this is not an exhaustive inventory of the hurdles. There is also QIMA's allegation about rising labour rights violation in the country's RMG factories. According to the above compliance solutions provider, critical issues related to work hours and wages recorded in one-third of Bangladesh's RMG units nearly doubled in 2024 compared to 2023. Even a more serious allegation is that a certain percentage of facilities still tend to resist improvement of factory environment. Labour unrest is a very common problem in the country' RMG hubs. Workers very often come down to the streets to demonstrate over various issues. Production in factories is seriously disrupted in such restive situations.
However, factory owners have their own explanation of workers' movement. They usually attribute workers' strike and work abstention solely to conspiracy by outside forces. Such a possibility cannot be ruled out altogether; but the conspiracy theory fails to explain the whole situation. Only such a one-sided approach without addressing other genuine issues related to workers' rights is unlikely to bring a sustainable solution of the problem and ensure peaceful environment conducive to smooth production.
For a lasting solution to the problem of labour unrest and for the sake of uninterrupted production, a holistic approach will have to be adopted for striking a balance between the interests of both the workers and the factory owners. There are also the compliance issues that need to be addressed with due diligence. RMG factory owners must advance cautiously and with measured steps to face the challenges in the changing apparel sourcing landscape. This changing scenario in the garment manufacturing arena offers the country a great opportunity to boost its industry. Bangladesh must not miss the chance. Now the question is whether the stakeholders are really prepared to make the best possible use of the opportunity.
Sarker Nazrul Islam
Published :
Jan 31, 2025 23:02
Updated :
Jan 31, 2025 23:02
The prevailing volatile situation in the global arena of apparel business has left two options for Bangladesh: either it retains its position as an important apparel hub by boosting its production capacity up to the requirement of buyers or gives room to others competing countries. At a time when Western brands are searching for cheaper sources of apparels as part of their push for moving away from China, the course of action the country's readymade garment sector takes can make or unmake their future. The importers are doing so because of labour cost rise in that country and tariff hike on Chinese exports as an outcome of the Sino-US trade war. This brings a great opportunity for Bangladesh to reinvigorate the sector and there is real ground for its expansion. The apparel sector in Bangladesh has a long history of robust growth since its inception, during which it stayed competitive in the world arena. Even in the tumultuous year of July-August uprising it remained on a healthy growth path with a double-digit expansion rate. But it is a question whether it will be able to reap benefits from the ongoing changes in sourcing.
When such is the dilemma, a report from the Quality Inspection Management (QIMA) published a week ago came with a mixed bag of hope and uncertainty for Bangladesh's RMG sector. On the one hand, as QIMA thinks, Bangladesh's apparel industry may benefit from Western brands' move away from China and US administration's imposition of higher tariff on Vietnamese products considering the country a 'middleman' for China's business. However, beside this prospective note, QIMA alleges a rise in work hour and wage related labour rights violations in Bangladesh.
Though Western brands still see China as a reliable source to build up a buffer stock of China-made apparels to minimise disruption amidst the trade war between two economic giants, the European and US buyers continue search for cheaper alternative sources. A QIMA survey finds that some 67 per cent of EU-based businesses have already started sourcing from countries other than China. In this connection, it can be examined to see how far Bangladesh is ready to reap benefits from the current state of affairs.
Bangladesh with an extensive network of apparel industries, a strong contingent of skilled workers and the professional expertise has a great chance of profiting from the current situation by way of getting more orders diverted to it. But to achieve it, the stakeholders in the country's RMG sector must pursue aggressive market expansion policies. They should also make optimum utilisation of the existing tranquil socio-political environment in the aftermath of the July mass uprising. The RMG sector must also strengthen its capacity and make utmost efforts to win confidence of foreign brands. This is how Bangladesh's apparel sector can get a large share of the pie.
The on-going situation indicates the possibility for Bangladesh to maintain an edge over its rivals. But nothing is easy and free from challenges in this highly competitive world. Bangladesh will have to triumph over its rivals to hold on to its position. Vietnam and India are the strongest rivals of Bangladesh in grabbing a share of the global RMG market likely to be vacated by China. Pakistan and Sri Lanka are rising challengers for the country. While India's apparel exports in last September increased by over 17 per cent, Pakistan and Sri Lanka enjoyed a rise in orders last year.
Bangladesh has more things to be worried about. Some of Bangladesh's garment factories have recently closed operations in the wake of strong workers movement over wage related issues. Some other factories failed to pay their workers in time. Then, there are also the compliance problems.
These are real challenges for Bangladesh's RMG sector. But this is not an exhaustive inventory of the hurdles. There is also QIMA's allegation about rising labour rights violation in the country's RMG factories. According to the above compliance solutions provider, critical issues related to work hours and wages recorded in one-third of Bangladesh's RMG units nearly doubled in 2024 compared to 2023. Even a more serious allegation is that a certain percentage of facilities still tend to resist improvement of factory environment. Labour unrest is a very common problem in the country' RMG hubs. Workers very often come down to the streets to demonstrate over various issues. Production in factories is seriously disrupted in such restive situations.
However, factory owners have their own explanation of workers' movement. They usually attribute workers' strike and work abstention solely to conspiracy by outside forces. Such a possibility cannot be ruled out altogether; but the conspiracy theory fails to explain the whole situation. Only such a one-sided approach without addressing other genuine issues related to workers' rights is unlikely to bring a sustainable solution of the problem and ensure peaceful environment conducive to smooth production.
For a lasting solution to the problem of labour unrest and for the sake of uninterrupted production, a holistic approach will have to be adopted for striking a balance between the interests of both the workers and the factory owners. There are also the compliance issues that need to be addressed with due diligence. RMG factory owners must advance cautiously and with measured steps to face the challenges in the changing apparel sourcing landscape. This changing scenario in the garment manufacturing arena offers the country a great opportunity to boost its industry. Bangladesh must not miss the chance. Now the question is whether the stakeholders are really prepared to make the best possible use of the opportunity.
