POST the Rana Plaza tragedy, questions hovered around peoples' minds as they tried to predict the fate of the Readymade garments (RMG) industry. Will foreigners boycott our products? What if the RMG industry takes a nose-dive pulling the Bangladesh economy with it?

The revelations of recent statistics give insights that are quite different than one may have expected. Knitwear and woven exports have risen by 25 percent and 27 percent respectively in July 2013 compared to the same time last year. When we look at annual figures, total garments exports in fiscal 2012 was around US$19 billion and it leaped to approximately US$21 billion in fiscal 2013.

So how do we make sense of it all? Didn't the Rana Plaza disaster have any adverse impact on the garments industry? In order to understand this, a depiction of the overall RMG scenario must be portrayed. 'Price' and 'capacity' are two of Bangladesh's hard advantages which enables its spread into the heart of the world market for RMG. According to Worker's Rights Consortium, per hour minimum wage in Bangladesh is US$ 0.24 - lower than Cambodia (US$ 0.45), Vietnam (US$ 0.53) and China (US$ 1.26). In terms of capacity, the country has a total of 5,400 garment factories that is far higher than in Indonesia (2,450), Vietnam (2,000) and Cambodia (260). Low wages and high capacity coupled together lure foreign buyers and makes it difficult for them to boycott Bangladesh and hence RMG exports continue to rise.

Prospects of Bangladesh's RMG are further strengthened as China is losing its appeal in the RMG realm due to labor shortages and higher wages. Bangladesh is expected to gain much of China's share. However it should be borne in mind that, future factory disasters will further taint the image of Bangladeshi garments; once the end-buyers turn their backs, it will be difficult to get them back.

A factory revealed that foreign buyers are slashing prices of garments every year. Price of some garments now is 40 percent lower than in 2005 whereas overhead costs are rising day by day. In addition, factories compete with one another and undercut prices further. Profit margin is slivered and leaves little resource for renovation of factories. If factory disasters continue to occur then it will leave a negative impression on the products making it difficult to fly off the racks. Buyers will move out despite advantages in capacity and wages. Once the supply chain splits, it will be difficult to put it together.