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Contribution of Textile Industry for Socio-economic Development in Bangladesh: a Review.

Muzahidur Rahman Chowdhury
Deartment of Textile Engineering. Southeast University, Dhaka-1208, Bangladesh.

Abstract/ Executive Summary:

RMG (Ready Made garment) sector plays an immensely vital role for developing socio- economic condition in Bangladesh since the eighties. More than 80% of total export earnings of Bangladesh come from Textiles and Clothing manufacturing sector. There are more than five thousands garment factories in Bangladesh. Bangladesh enjoys GSP facilities for the Apparel sector to EU, Japan, Australia, New Zealand, Canada, and Duty Free Market Access to China, South Korea, India and APTA scheme for China, South Korea. High value added apparel production is on the rise in the country. There is an indication of continuous positive growth in Knit & Woven garments export from Bangladesh. Not only the RMG product but also its supportive backward and forward linkage industry such as Garments accessories industry, diversified jute goods manufacturing industry, packaging industry also earns foreign currency which contribute export sector of Bangladesh. In this review paper I try to focus how RMG sector continuously contribute significantly to the economic growth in Bangladesh.

Keywords: Ready Made Garments (RMG); Gross Domestic Product (GDP) growth; Backward and Forward Linkage ; SocioEcomnomic Development

Location: In Bangladesh

Start Date:

End Date:

Program Area: Socio-economic and Policy

Commodity: Socioeconomic

Objectives:

The main objective is to get an overview of the garments sector of Bangladesh how contribute for the socio economic developments of country. The work also helps to find different era of garments industry’s prospect along with problems as well as remedy. Analyze statistical data of RMG industry in Bangladesh and critically examine for the competitiveness of the industry in major international markets due to global economic policy changes and also explore the export potential of the industry in future.

Methodology:

C. Gross Domestic Product (GDP) The market value of all the goods and services produced in the country during the period under the consideration is called Gross Domestic Product. The ratio of GDP to the total population of the region is the per capita GDP and the same is called Mean Standard of Living. Total GDP can also be broken down into the contribution of each industry or sector of the economy. Gross domestic product (GDP) is a monetary measure of the market value of all final goods and services produced in a period (quarterly or yearly). Annual GDP Growth of Bangladesh. The Gross Domestic Product (GDP) growth in Bangladesh expanded 7.11 percent in 2016 from the previous year. GDP Annual Growth Rate in Bangladesh averaged 5.69 percent from 1994 until 2016, reaching an all time high of 7.11 percent in 2016 and a record low of 4.08 percent in 1994. Bangladesh averaged a GDP growth of 6.5% that has been largely driven by its exports of readymade garments, remittances and the domestic agricultural sector. GDP - composition by sector: agriculture: 16%, industry: 30.4% & services: 53.6% (2015 est.). The RMG sector has experienced an exponential growth since the 1980s. The sector contributes significantly to the GDP. It also provides employment to around 4.2 million Bangladeshis, mainly women from low income families. In the last five consecutive fiscal years, knitwear constituted 7.2% of the national GDP on average, demonstrating that RMG continues to serve as a strategic and commercially beneficial sector to the country, which has had to overcome hurdles to compete in the changing international climate time and time again.

D. Number of Textile Industry and Employments in Bangladesh Bangladesh currently has 407 spinning mills, 787 textile weaving mills, 236 dyeing and finishing mills, and around a total 6,502 registered and 527 un-registered garment and textile factories. Approximately 4,328 Bangladesh Garment Manufacturers and Exporters Association ( BGMEA ) members employ four million workers at their garment factories, of which 80 percent are women.

E. Present Status of Total Export and RMG Export from Bangladesh The following export product groups represent the highest dollar value in Bangladeshi global shipments during 2015. Also shown is the percentage share each export category represents in terms of overall exports from Bangladesh. 1. Clothing (not knit or crochet): US$15.2 billion (43% of total exports) 2. Knit or crochet clothing: $15 billion (42.2%) 3. Other textiles, worn clothing: $1 billion (2.8%) 4. Footwear: $807 million (2.3%) 5. Paper yarn, woven fabric: $631.7 million (1.8%) 6. Fish: $569.9 million (1.6%) 7. Raw hides excluding furskins: $302.5 million (0.9%) 8. Headgear: $240.2 million (0.7%) 9. Leather, animal gut articles: $205.1 million (0.6%) 10. Tobacco: $119.3 million (0.3%) Exports from Bangladesh amounted to US$ 34257.18 million in 2015-16, and RMG sector contributed near about 82.01% of total exports in our country. According to the report of BGMEA at end of 2016 the total RMG exports from Bangladesh is about US$ 28094.16 million. A comparative data on total export and RMG export are given bellow.

F. Earnings From Apparel Exports The growth dynamics of the sector over the last decade evince two clearly discernible phases: during the initial period it was the woven-RMG which dominated the structure of apparel exports, whilst in recent years which could be termed as a second phase, it is the knit-RMG which emerged as no less of an important segment in the RMG sector with its share growing up steadily and local value retention fast approaching the level of woven RMG. According to 2015-16 fiscal year basis the values of woven apparel export for US$ 14738.74million and values for knit appeal about US$ 13355.42 million , In total the values of apparel exports fiscal year basis is US$ 28094.16 million. On the other hand according to calendar year the values of woven apparel export for US$ 14931.33 million and values for knit apparel about US$ 13736.95 million, In total the values of apparel exports fiscal year basis is US$ 28668.29 million.

Source of Information: Journal of Multidisciplinary Engineering Science and Technology (JMEST) Vol. 4 Issue 3, March - 2017 ISSN: 2458-9403

Article Link (Online Journal): JMESTN42352123

Funding Source:

Budget:

Total Budget (Tk.) :

Achievement/Findings:

In Bangladesh, RMG sector has contributed the most in the GDP of Bangladesh and its economy during last three decades. Bangladesh is a labor rich country and an ideal place for the Readymade Garment (RMG) industry that uses labor intensive technology for its production. There are several issues related to increases the labor productivities and among those, labor incentives is one of the major factor point. For developing effective and efficient work force BGMEA has undertaken a number of projects under its social welfare programs to ensure better occupational safety and health and enforcement of labor rights as per the local laws and ILO convention guidelines such as free primary health care, medicine and advocacy services on reproductive health issues to the garment workers , Family Welfare and Reproductive Health Education Services for Garment Workers funded by United Nations Population Fund (UNFPA), Earn and Learn Program, BGMEA Safety Measures Cell etc. It leads to the success of RMG industries as it increases the profit of the factories which ultimately playing a vital role for both socio and economic developments of the country. The review brings out the increasingly crucial role of export-oriented RMG sector in Bangladesh and its contribution for continuous socio-economic developments of country.

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