Scribd
Upload
11 views2 pages

Bangladesh RMG Sector Growth and Challenges

The garment industry has grown significantly in Bangladesh since the 1980s. It now employs over 4 million people, over half of whom are women from rural areas. Garment exports contribute around 75% of Bangladesh's total export earnings and 13% of GDP. While the industry has provided many employment opportunities for women, they often face low wages and poor working conditions. Workers, especially women, have organized some protests in recent years to demand better pay and treatment. The future of the industry remains strong as countries like China experience rising costs, making Bangladesh more attractive for foreign investment in garment production.

Uploaded by

K A Sanim Kazi
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
11 views2 pages

Bangladesh RMG Sector Growth and Challenges

The garment industry has grown significantly in Bangladesh since the 1980s. It now employs over 4 million people, over half of whom are women from rural areas. Garment exports contribute around 75% of Bangladesh's total export earnings and 13% of GDP. While the industry has provided many employment opportunities for women, they often face low wages and poor working conditions. Workers, especially women, have organized some protests in recent years to demand better pay and treatment. The future of the industry remains strong as countries like China experience rising costs, making Bangladesh more attractive for foreign investment in garment production.

Uploaded by

K A Sanim Kazi
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

History

In the 1950s, labors in the Western World became highly organized; forming trade unions. This
and other changes provided workers greater rights including higher pay; which resulted in higher
cost of production. Retailers started searching for places where the cost of production was
cheaper. Developing economies like Hong Kong, Taiwan and South Korea presented themselves
as good destinations for relocations because they had open economic policies and had non-
unionized and highly disciplined labor force that could produce high quality products at much
cheaper costs.[2]

In order to control the level of imported RMG products from developing countries into
developed countries, Multi Fibre Agreement (MFA) was made in 1974. The MFA agreement
imposed an export rate 6 percent increase every year from a developing country to a developed
country. It also allowed developed countries to impose quotas on countries that exported at a
higher rate than the bilateral agreements. [3] In the face of such restrictions, producers started
searching for countries that were outside the umbrella of quotas and had cheap labor. This is
when Bangladesh started receiving investment in the RMG sector. In the early 1980s, some
Bangladeshis received free training from Korean Daewoo Company.[2] After these workers came
back to Bangladesh, many of them broke ties with the factory they were working for and started
their own factories.

[edit] Facts and Figures


In the 1980s, there were only 50 factories employing only a few thousand people. Currently,
there are 4490 manufacturing units. The RMG sector contributes around 75 percent to the total
export earnings. In 2007 it earned $9.35 billion. This sector also contributes around 13 percent to
the GDP, which was only around 3 percent in 1991. Of the estimated 4.2 million people
employed in this sector, about 50 percent of them are women from rural areas. USA is the largest
importer of Bangladeshi RMG products, followed by Germany, UK, France and other E.U
countries. [4]

[edit] Women in the Garment Industry

Garment sector is the largest employer of women in Bangladesh.[5] The garment sector has
provided employment opportunities to women from the rural areas that previously did not have
any opportunity to be part of the formal workforce. This has given women the chance to be
financially independent and have a voice in the family because now they contribute financially.[6]

However, the women workers are facing many problems. Most women come from low income
families. Low wage of women workers and their compliancy have enabled the industry to
compete with the world market. Women are paid far less than men mainly due to their lack
education.[2] Women are reluctant to unionize because factory owners threaten to fire them.[5]
Even though trade unionization is banned inside the Export processing Zones (EPZ), the working
environment is better than that of the majority of garment factories that operate outside the EPZs.
But, pressure from buyers to abide by labor codes has enabled factories to maintain satisfactory
working conditions.[6]

In recent times, garment workers have protested against their low wages. The firsts protests
broke out in 2006, and since then, there have been periodic protests by the workers.[7] This has
forced the government to increase minimum wages of workers.[8]

[edit] The future


The RMG sector is expected to grow despite the global financial crisis of 2009.[9] As China is
finding it challenging to make textile and foot wear items at cheap price, due to rising labor
costs, many foreign investors, are coming to Bangladesh to take advantage of the low labor cost.

You might also like