summary of Bangladesh Garment industry

summary of Bangladesh Garment industry

Agriculture, as the case in India, has been the backbone of economy and chief source of income for the people of Bangladesh, the country made of villages. Government wants to decrease poverty by getting top productivity from agriculture and achieve self-reliance in food production. Apart from agriculture, the country is much implicated about the increase of export division. Bangladesh have accelerated and changed her exports substantially from time to time. After Bangladesh came into being, jute and tea were the most export-oriented industries. But with the continual perils of flood, failing jute fibre prices and a vital decline in world demand, the role of the jute sector to the country's economy has deteriorated (Spinanger, 1986). After that, focus has been shifted to the function of output sector, especially in garment industry.

The garment business of Bangladesh has been the key export division and a main source of foreign exchange for the last 25 years. At present, the country generates about billion worth of products each year by exporting garment. The business provides employment to about 3 million workers of whom 90% are women. Two non-market elements have performed a vital function in confirming the garment industry's continual success; these elements are (a) quotas under Multi- Fibre Arrangement1 (Mfa) in the North American shop and (b) extra shop entry to European markets. The whole course is strongly associated with the trend of relocation of production.

Thailand Hotel

Displacement of output in the Garment Industry

The global economy is now controlled by the exchange of output where firms of industrialized countries swing their concentration to developing countries. The new representation is centred on a core-periphery principles of production, with a comparatively small centre of permanent employees dealing with finance, research and development, technological practice and modernisation and a periphery containing dependent elements of output procedure. Reducing costs and addition output are the main causes for this disposition. They have discovered that the simplest way to undercharge is to move output to a country where labour payment and output costs are lower. Since developing nations furnish areas that do not inflict costs like environmental degeneration, this practice protects the industrialized countries against the issues of environment and law. The exchange of output to Third World has helped the expansion of economy of these nations and also speed up the economy of the industrialized nations.

Garment business is controlled by the exchange of production. The globalisation of garment output started earlier and has extensive more than that of any other factory. The companies have transferred their blue-collar output activities from high-wage areas to low-cost manufacturing regions in industrialising countries. The enhancement of communication principles and networking has played a key role in this development. Export-oriented manufacturing has brought some good returns to the industrialising nations of Asia and Latin America since the 1960s. The first relocation of garment manufacturing took place from North America and Western Europe to Japan in the 1950s and the early 1960s. But during 1965 and 1983, Japan changed its concentration to more lucrative products like cars, stereos and computers and therefore, 400,000 workers were dismissed by Japanese textile and clothing industry. In impact, the second stock exchange of garment manufacturing was from Japan to the Asian Tigers - South Korea, Taiwan, Hong Kong and Singapore in 1970s. But the tendency of exchange of manufacturing did not remain there. The rise in labour payment and activeness of trade unions were in proportion to the enhancement in economies of the Asian Tigers. The business witnessed a third exchange of manufacturing from 1980s to 1990s; from the Asian Tigers to other developing countries - Philippines, Malaysia, Thailand, Indonesia and China in particular. The 1990s have been led by the final group of exporters together with Bangladesh, Srilanka, Pakistan and Vietnam. But China was leader in the current of the relocation as in less than ten years (after 1980s) China emerged from nowhere to come to be the world's major constructor and exporter of clothing.

Bangladesh Garment Sector and Global Chain
The cause of this exchange can be clarified by the wages buildings in the garment industry, all over the world. Apparel labour payment per hour (wages and fringe benefits, Us$) in Usa is 10.12 but it is only 0.30 in Bangladesh. This incompatibility accelerated the world apparel exports from billion in 1965, with developing nations making up just 14 percent of the total, to 9 billion in 1991, with developing nations contributing 59 percent. In 1991 the estimate of workers in the ready-made garment business of Bangladesh was 582,000 and it grew up to 1,404,000 in 1998. In Usa, however, 1991-figure showed 1,106.0 thousand workers in the apparel sector and in 1998 it turned down to 765. 8 thousand.

The presented information reveals that the tendency of low labour charges is the key surmise for the exchange of garment manufacturing in Bangladesh. The practice initiated in late 1970s when the Asian Tiger nations were in quest of tactics to avoid the export quotas of Western countries. The garment units of Bangladesh are generally relying on the 'tiger' nations for raw materials. Mediators in Asian Tiger nations build an intermediary in the middle of the textile units in their home countries, where the spinning and weaving go on, and the Bangladeshi units where the cloth is cut, sewn, ironed and packed into cartons for export. The same representatives of tiger nations witness the shop for Bangladesh in some nations of the North. Large sell trading companies placed in the United States and Western Europe give most orders for Bangladeshi garment products. companies like Marks and Spencers (Uk) and C&A (the Netherlands) operate capital funds, in proportion to which the capital of Bangladeshi owners is patience. Shirts man-made in Bangladesh are sold in industrialized nations for five to ten times their imported price.

Collaboration of a native private garment industry, Desh Company, with a Korean company, Daewoo is an important instance of international garment chain that works as one of the grounds of the expansion of garment business in Bangladesh. Daewoo Corporation of South Korea, as part of its global policies, took interest in Bangladesh when the Chairman, Kim Woo-Choong, offered an aspiring joint speculation to the Government of Bangladesh, which included the increase and process of tyre, leather goods, and cement and garment factories. The Desh-Daewoo alliance was decisive in terms of getting into the global apparel markets at vital juncture, when import reforming was going on in this shop following the signing of Mfa in 1974. Daewoo, a South Korean important exporter of garments, was in crusade of opportunities in nations, which had hardly used their quotas. Due to the quota restriction for Korea after Mfa, the export of Daewoo became limited. Bangladesh as an Ldc got the opportunity to export without any constraint and for this cause Daewoo was implicated with the use of Bangladesh for their market. The purpose behind this need was that Bangladesh would rely on Daewoo for importing raw materials and at the same time Daewoo would get the shop in Bangladesh. When the Chairman of Daewoo displayed interest in Bangladesh, the country's President put him in touch with chairman of Desh Company, an ex-civil servant who was seeking more entrepreneurial pursuits.

To fulfil this wish, Daewoo signed a collaboration ageement with Desh Garment for five years. The ageement also incorporated the fields of technical training, purchase of machinery and fabric, plant preparation and marketing in return for a exact marketing commission on all exports by Desh during the ageement phase. Daewoo also imparted an exhaustive practical training of Desh employees in the working atmosphere of a multinational company. Daewoo keenly helped Desh in buying machinery and fabrics. Some technicians of Daewoo arrived Bangladesh to create the plant for Desh. The end effect of the association of Desh-Daewoo was important. In the first six years of its business, i.e. 1980/81-86/87, Desh export value increased at an yearly mean rate of 90%, reaching more than million in 1986/87.

It is claimed that the Desh-Daewoo alliance is a vital element for the increase and achievement of Bangladesh's entire garment export industry. After getting associated with Daewoo's brand names and marketing network, overseas buyers went on with buying garments from the corporation heedless of their origin. Out of the opportunity trainees most left Desh enterprise at some times to erect their own competing garment companies, worked as a way of spicy knowledge all through the whole garment sector.

It is vital to identify the outcomes of the process of spicy output from high pay to low pay nations for both developing and industrialized nations. It is a bare fact that most of the Third World nations are now on the way to industrialisation. In this procedure, workers are working under unfavourable working environment - minimal wages, unhealthy place of work, lack of security, no job guarantee, forced labour etc.

The route of globalisation is full of ups and downs for the developing nations. Relocations of comparatively mobile, blue-collar output from industrialized to developing nations, in some circumstances, can have troublesome effects on public life if - in the absence of sufficient planning and talks in the middle of international organisations and the government and/or organisations of the host nation - the transferred operation encourages urban-bound relocation and its span of stay is short. Someone else negative effect is that the rise in employment and/or income is not improbable to be satisfactorily large and whole to lessen inequality. In association with the negative results of relocation of manufacturing on employment in industrialized countries, we comprehend that in comparatively blue-collar industries, the growing imports from developing nations lead to inescapable losses in employment. It is held that development of trade with the South was a vital surmise of the disindustrialisation of employment in the North over past few decades.

After all employees who are enduringly working under unfavourable circumstances have to bear the brunt. Work is under-control across the Bangladesh garment sector. Appalling working atmosphere has been brought to light in the Bangladesh garment industry.

A research reveals that 90 percent of the garment employees went through illness or disease during the month before the interviews. Headache, anaemia, fever, chest, stomach, eye and ear pain, cough and cold, diarrhoea, dysentery, urinary tract infection and reproductive condition problems were more common diseases. The garment factories gave bonus of distinct diseases to the employees for working. With a view to finding out a link in the middle of these diseases and commercial threats, condition status of employees has been examined before and after advent in the garment work. At the end of examination, it was come out that about 75 percent of the garment workforce had sound condition before they entered the garment factory. The reasons of condition declines were commercial threats, unfavourable working environment, and want of staff facilities, inflexible terms and conditions of garment employment, workplace pressure, and low wages. distinct work-related threats and their sway on condition forced employees to leave the job after few months of joining the factory; the mean length of service was only 4 years.

The garment sector is disreputable for fires, which are said to have claimed over 200 lives in the past two years, though exact figures are tough to find. A shocking instance of absence of workplace security was the fire in November 2000, in which approximately 50 workers lost their lives in Narsingdi as exist doors were closed.

From the above determination of working atmosphere of garment sector, we can state that the working environment of most of the Third World nations, particularly Bangladesh remind us of earlier development of garment industries in the First World nations. The state of employment in many (not necessarily) textiles and clothing units in the developing nations take us back to those set up in the nineteenth century in Europe and North America. The mistreatment of garment employees in the birth duration of the development of Us garment factories reviewed above is more or less same as it seen now in the Bangladesh garment industry. Can we state that garment employees of the Third World nations living in the 21st century? Is it a return of the Sweatshop?

In a way, the Western companies are guilty of pitiable working atmosphere in the garment sector. The industrialized nations want to make more profit and therefore, force the developing nations to cut down the manufacturing cost. In order to survive in the competition, most of the developing nations plump immoral practices. By introducing inflexible terms and conditions in the business, the global economy has left few alternatives for the developing nations.

Right Time to Make a Decision
There are two alternatives to tackle the challenge of the competing world initiated by the continuous pressure of global garment chain. One can continue to exist in the competition by adopting time-honoured work systems or immoral practices. But it is uncertain how long they can continue to exist. In association with the garment business of Bangladesh, we can say that this is the right time to effect a competing policy, which improves quality. If the Mfa opportunities are eliminated, will it be feasible to keep the competitiveness through low-wage-female labour or through further drop in female wages? maybe not. Since the labour charges are so minimal that with such wage, a employee is not able to declare even a house of two members. Improving the efficiency of female workers is the only explication to increased competition. Allowable schooling and appropriate training can help achieve these inescapable results. To rule the global market, Bangladesh has to come out of low wage and low output complex in the garment industry. Bangladesh can improve labour output through constant training, use of upgraded technology and best working environment. Bangladesh should plan a strategy intended for promoting skill development, speeding up technology exchange and Improving productivity height of the workers.

Another recipe is to adopt best principles or ethical course. Those companies, which react to heightened competition by stressing quality, rapid reply of the customers, fair practices for labourers should have the most innovative practices. We think that we are now living in the age of competition in producing improved capability over cost-reduction policy. The objective of turn efforts at the workplace has been modified over the time - from making the job humane in the 1960s, to job pleasure and output in 1970s, to capability and competitiveness in the 1980s. It is vital for a enterprise to pursue a competing course that improves quality, flexibility, innovation and buyer care. If they rely on low costs by dropping labourers' wages and other services, they will be bereaved of labourers' dedication to work.

Strength

. vital Qualified/keen to learn workforce ready at low labour charges. The recommended minimum mean wages (which include Travelling Allowance, House Rent, healing Allowance, Maternity Benefit, Festival Bonus and Overtime Benefit) in the units within the Bangladesh Export Processing Zones (Bepz) are given as below; on the other hand, exterior the Bepz the wages are about 40% lower:

. Energy at low price

. verily accessible infrastructure like sea road, railroad, river and air communication

. Accessibility of basal infrastructure, which is about 3 decade old, generally established by the Korean, Taiwanese and Hong Kong Chinese industrialists.

. Fdi is legally permitted

. Slowly open Economy, particularly in the Export Promotion Zones

. Gsp under Eba (Everything But Arms) for Least industrialized Country applicable (Duty free to Eu)

. Improved Gsp advantages under Regional Cumulative

. finding forward to Duty Free Excess to Us, talks are on, and appear to be on hopeful track

. speculation assured under Foreign private speculation (Promotion and Protection) Act, 1980 which secures all foreign investments in Bangladesh

. Opic's (Overseas private speculation Corporation, Usa) guarnatee and finance agendas operable

. Bangladesh is a member of Multilateral speculation certify division (Miga) under which security and security measures are available

. Adjudication service of the International Centre for the hamlet of speculation Dispute (Icsid) offered

. Excellent Tele-communications network of E-mail, Internet, Fax, Isd, Nwd & Cellular services

. Feebleness of currency against dollar and the condition will persist to help exporters

. Bank interest@ 7% for financing exports

. Convenience of duty free practice bonded w/house

. Readiness of new units to improve systems and originate infrastructure accordant with stock increase and fast reactions to circumstances

Weakness
. Lack of marketing tactics

. The country is deficient in creativity

. Absence of verily on-hand middle management

. A small estimate of manufacturing methods

. Low acquiescence: there is an international pressure group to impel the local producers and the government to implement public acquiescence. The Us Gsp may be cancelled and purchasing from Us & Eu may decrease significantly

. M/c advancement is necessary. The machinery required to compare add on a garment or increase competence are missing in most industries.

. Lack of training organizations for commercial workers, supervisors and managers.

. Autocratic approach of nearly all the investors

. Fewer process units for textiles and garments

. Sluggish backward or forward blending procedure

. Incompetent ports, entry/exit complex and loading/unloading takes much time

. Speed money culture

. Time-consuming practice clearance

. Unreliable dependability with regard to Delivery/Qa/Product knowledge

. communication gap created by incomplete knowledge of English

. Subject to natural calamities

Opportunity

. Eu is willing to create business in a big way as an selection to china particularly for knits, together with sweaters

. Bangladesh is included in the Least industrialized Countries with which Us is committed to improve export trade

. Sweaters are very frugal even with china and is the expectation for Bangladesh

. If skilled technicians are ready to instruct, prearranged garment is an selection because labour and Energy cost are inexpensive.

. Foundation garments for Ladies for the Fdi promise is vital because both, the technicians and very industrialized machinery are vital for best competence and output

. Japan to be observed, as conventionally they purchase handloom textiles, home furniture and garments. This section can be encouraged and extensive with prolonged enlarge in quality

Threat

. The exporters have to put in order themselves to harvest the advantages offered by the opportunities.

summary of Bangladesh Garment industry