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GARMENTS INDUSTRY OF BANGLADESH IS MARCHING AHEAD

Mohammad Musharraf Hussain President Bangladesh Garment Manufacturers and Exporters Association (BGMEA)
Textiles and garment industries have always played a very industrialization process of a country. In the past, industrial revolution had started in England with the rapid development of textile and garment industries. Subsequently we witnessed the same process o f industrialization in the USA and most of the countries in Europe In the recent past, the major industrialization process started in Japan after the second world war with textiles and garments
sector played a vital role in the economic development of the major Asian countries like Hong Kong. Korea. Taiwan and Singapore transforming them into newly industrialized countries. In the 1970s more countries like Thailand. Malaysia. Indonesia, the Philippines and Sri Lanka followed the path through development of their textile sector and became major textile and garment producing countries contributing very significantly to the growth of their economies. Following the examples of the successful industrialization process of those countries, many developing countries are now trying to break through their industrial backwardness through the development of their textile sector and thereby achieving dsired economic growth.
Starting in the late seventies. Bangladesh also attained considerable success in garment
exports in the eighties bringing in tremendous socio economic changes in the country. The aucceas of this sector has brought new dimension to the economic scenario which has augmented the share of manufactured products in the economy. Since 1987. garment has become the major export sector surpassing jute, the traditional largest export sector of Bangladesh, so much so that is coniribuled fifty seven percent to the national's total export revenue in 1991. turning it into a billion dollar export industry
The sector is characterized by small and medium size private owned enterprises which manufacture under contract, to foreign buyers' designs and specifications During the early
eighties, the Industry exported apparel mainly to the USA and the product was concentrated in
technical skill in this trade was not very high and some factories employed foreign technicians to upgrade the skill of their workforce The government of Late President Ziaur Rahman realized the potential of thia actor and look a number of pragmatic steps at that time to streamline the import and.export formality introducing back to back letter of credit facility and bonded warehouse system, which acted as catalytic force for Ihe tremendous success of the industry Other important factors that influenced the last growth of the industry, were the low initial capital requirement short gestation period and high
turnover ratio to investment As the intitial capital requirement was relatively low. one had only to import the a e w i n g machinea Promoters were relieved of the burden of a large working capitalc-quircmenl and due to the availability of back -to back LC facility one could go into production within a period of four to six months Because of the prospect of quick turnover, the commercial banka also came forward to finance these enterprises. The result was that . in a relatively short span of lime. Bangladesh emerged as
apparel producing nations of the world. The number of apparel manufacturing units increased manifold within one decade and today Bangladesh is an established source of supply of ippaiels to most of ihe developed nanons of the world supported by over eleven hundred manufacturing units In 1990 . despite a general slow down in the world economy, particularly in countries importing lexlitle products from Banlgadcsh. export growth was significant in keeping with the
. achievement of the past. One of the reasons for this development has been the diversification of the products into quota free areas and new markets.
Over the years. Bangladesh has emerged as major supplier to three very important markets and on quantity basis she has been the 8th largest exporter to the USA. 9th to Canada, and IOth to the EEC The U.S. customs report as on March 31. 1992 reveals that Bangladesh was the 4th largest exporter to the USA in that particular month. This impressive perform -ance has been possible as the buyers, who find East Asia loo expensive as supply source, have been attracted by Bangladesh's relatively low cost of production and high product quality.
industry, manufacturers and exporters had concentrated in marketing their products to the USA. As a result during the fiscal year 1986-87. the USA had 80% of our total garment export share. Over the years, due to the dynamism of our entrepreneurs. Bangladesh's product base was significantly diversified and our export earnings started increasing at a very fast pace. The diversification was undertaken in different product groups as well as markets which. . in the recent years, resulted in
Bangladesh's penetration into the European market in a substantial way. At present, even after our substantial growth in the US market in absolute terms, the garments export share in that market has gradually come down to 51%. during 1990-91, while our share in the EEC market increased to 40%. Efforts are underway to market Bangladeshi products to Japan, Australia, Middle East and the newly created Commonwealth-of Independent Stales (former USSR). Garments being the number one export sector, now employs over 500, 000 workers of which about 85% arc women, who in the past, did not have any employment opportunity in any organized industrial sector. This industry has also created enormous activities in other sectors of the economy and has opened up a large opportunity for establishment of backward linkage industries. In the eighties, all raw materials required for the industry were imported but today cartons, threads labels, polybags, gum tapes, backboards aeckboards etc. are being produced in subslaintial quantities io the country. The sector currently imports over 650 million square meters of fabric which indicates
that local textile producers have a vast ready market of fabrics. Having been attracted by the prospect some local textile manufacturers have already geared up and devoted their entire production capacity to cater to the need of the garment industry.
The development of the garments sector has generated activities in other areas like
banking, insurance, shipping, hotel, tourism, roajd transportation and railway container service. The industry has also created a large base for over five hundred thousand consumers for low coil cosmetics, sarees. footwear, ready to serve food and other consumer products, and laduxlriex producing the above items are flourishing and developing fast because of the demands created by these new consumers.
While the activities in many other industries in the country have been sluggish, the continuing expansion of the garment sector indicates immense potential of the sector for income generatiion and job creation.
Now lime has come for sustaining and consoidating the present growth of our garment
sector for which establishment of backward linkage has become very important . With the conclusion of the Uruguay Round of Negotiations the MIA is going to be phased Out within a decade and the same integrated into the free trade regime of the GATT. In that situation, without Bangladesh's own fabrics, it would be very difficult for Bangladesh to even retain its present position in th quota free developed countries, not to speak of any further growth. It is
heartening to note that the Hon'ble Prime Minister Begum Khaleda Zia has already declared textiles as a " Thrust Sector-Top most priority, therefore, needs be given to implements the decisions without any delay. Situation as it stands now, Bangladesh can immediately start the process by allowing the importation of quality grey fabrics without any conditionality under bonded warehouse and back-to-back LC facility for finishing in the local
dyeing and finishing mills. This will not only enhance value addition substantially and create sizable new jobs, it will also pave the way for establishing more dyeing and finishing and quality weaving factories within a short time. Foreign investment will also be forthcoming insuch a situation for developemnt spinning and weaving facilities.
In the country's short history, never has there been such a congenial atmosphere as it exits now under the present democratic system and we should
seize upon the opportunity without any delay. If we can make it as we in the garment sector have made in the past the industrial revolution in the country will start from here leading the country to the path of export led growth and the real of prosperity.