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Economic growth hinges on garment: Wahiduddin

Star Business Report
Bangladesh's economic growth in the coming years will depend on the performance of the readymade garment sector, said a noted economist yesterday.
But a big challenge for the country is how it will maintain the growth of the apparel sector at this moment amid a financial crisis in its largest export destination, the EU, said Wahiduddin Mahmud.
However, he hoped Bangladesh will perform well due to the benefit of its low wage compared to its competitors.
Moreover, China, the largest apparel supplying country worldwide, has become a major export destination for Bangladeshi garments as it is focusing on high-end apparel products now and not interested in making basic items for its own use.
“If we can grab even a small segment of the Chinese market, we will be doing well because China is a very big market," he said at a report launching ceremony of the World Bank at its office in Dhaka.
“Poverty is the base of our competitiveness. It is not a good thing,” he said.
The entrepreneurs should gradually increase productivity and enhance competitiveness so that the wage of the workers can be hiked to some extent, Mahmud said.
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In the current situation, a wage hike is possible if productivity of the factories can be increased, he said.
"In our country only wage is low, but other factors such as energy, infrastructures and bureaucracy are acting as obstacles to higher productivity."
It is possible to pay more to the workers if these obstacles are eliminated, he said.
“Now, the big challenge is that whether we will remain competitive by paying lower wage or will increase the wage by improving infrastructures, productivity and curbing corruption,” he said.
He said it is possible to increase productivity by 10 percent to 15 percent by introducing "production re-engineering" and imparting training on skills development to the workers.
"But, here the problem is the trained workers migrate from one factory to another."
So, the government should design training programmes for workers through private-public partnership, he said.
The government can finance the training programmes for the workers, he added.
A competitive market is dominated only by the efficient competitors, he said.
But in Bangladesh, most of the factories are inefficient, but still they are doing well globally.