Garments in Bangladesh:

RMG, the large scale production of readymade garments is a relatively new phenomenon in Bangladesh. The hundred percent export-oriented RMG industry experienced phenomenal growth over the years. In 1978, there were only 9 export-oriented garment manufacturing units, which generated export earnings of hardly one million dollar. Some of these units were very small and produced garments for both domestic and export markets.
Within a short period, Bangladeshi entrepreneurs acquired the expertise of mobilizing resources to export-oriented RMG industries. Foreign buyers found Bangladesh an increasingly attractive sourcing place. To take advantage of this cheap source, foreign buyers extended, in many cases, suppliers' credit under special arrangements. In some cases, local banks provided part of the equity capital. The problem of working capital was greatly solved with the introduction of back-to-back letter of credit, which also facilitated import of quality fabric, the basic raw material of the industry.
Till the end of 1982, there were only 47 garment manufacturing units. The breakthrough occurred in 1984-85, when the number of garment factories increased to 587. The number of RMG factories shot up to 4740 in 2007-2008. The industry has grown at the rate of 59% comparing from 1998-1999 to 2007-2008. In 2007-2008, the export earning of the RMG sector was $10.70 billion with 16.18 % growth than the previous year.
Export Destinations


Although Bangladesh exports garments to some 30 countries, its exports are highly concentrated in two major markets, the USA and EU. The USA as the largest importer country imported RMG products worth 3225.66 million USD from Bangladesh in 2007-08.

On the other hand Bangladesh exported RMG in the EU countries worth 6490.65 million USD. Of the individual members of the EU, Germany is the largest importer of RMG (2057.75 Million USD) from Bangladesh and it is followed by the UK and the Netherlands.

Export Volume

Since the late 1970s, the RMG industry started developing in Bangladesh primarily as an export-oriented industry although; the domestic market for RMG has been increasing fast due to increase in personal disposable income and change in life style. The sector rapidly attained high importance in terms of employment, foreign exchange earnings and its contribution to GDP.

 
   
Bangladesh's RMG Export to major destinations (FY 05-06, FY06-07 and FY 07-08)
Million US$
Woven
Knit
Total
.
July- June
July- June
July- June
July- June
July- June
July- June
July - June
July - June
July - June
.
2005-06
2006-07
2007-08
2005-06
2006-07
2007-08
2005-06
2006-07
2007-08
EU
1796.97
2012.44
2279.44
2910.54
3439.08
4211.21
4707.51
5451.52
6490.65
Growth
-
11.99
13.27
-
18.16
22.45
-
15.80
19.06
Canada
179.67
207.90
235.38
188.55
200.70
232.40
368.22
408.60
Growth
-
15.71
13.22
-
6.44
15.79
-
10.97
14.48
USA
2012.77
2284.84
2418.38
618.51
762.39
807.28
2631.28
3047.23
3225.66
Growth
-
13.52
5.84
-
23.26
5.89
-
15.81
5.86
 
     
  Contribution to the economy

Bangladesh’s RMG export earning stood at 10.70 billion US dollars in FY 2007-2008. In 2007-2008 this sector contributed 76.6% of the total Bangladesh export. At present the local value addition by the RMG sector is estimated to be about 70%.
 
     
  Trend in Bangladesh’s RMG growth rate (1998-99 to 2007-08)  
 
   
Period
  No. of RMG units

   
2003-04
  3957
2004-05
  4107
2005-06
  4220
2006-07
  4490
2007-08
  4740
 
     
 
 
     
  Employment:

In 1998-99, the industry employed directly more than 1.5 million workers, about 80% of whom were female. With the growth of RMG industry, linkage industries supplying fabrics, yarns, accessories, packaging materials, etc. have also expanded. In addition, demand for services like transportation, banking, shipping and insurance has increased. All these have created additional employment. In the year 2007-08 the total direct employment of the RMG sector reached up to 2.5 million workers with a growth rate of about 66 %. The total indirect employment created by the RMG industry in Bangladesh is estimated to be some 10 millions of workers.


The readymade Garment Industry has been building the fate of the nation over the last 3 decades. It has brought a dramatic change in the lifestyles of the people of Bangladesh. RMG industry has created a base for the rootless people providing employment. The most significant contribution of this sector is the empowerment of women. It has succeeded to bring out the women from the veil and engage them in the workplace. Garment industry has transformed the burden of excess population into skilled manpower. A good number of skilled RMG workers are going abroad every year adding value to the inflow of foreign remittance. A significant socio-economic change has been created in the country by this sector. At present the RMG sector is considered to be the back bone of the national economy.

 
     
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