summary of Bangladesh Garment industry

First Convenience Bank - summary of Bangladesh Garment industry

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Agriculture, as the case in India, has been the backbone of economy and chief source of earnings for the population of Bangladesh, the country made of villages. Government wants to decrease poverty by getting highest productivity from agriculture and perform self-reliance in food production. Apart from agriculture, the country is much involved 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 considerable 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 yield sector, especially in garment industry.

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The garment industry of Bangladesh has been the key export agency 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 industry 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 market and (b) special market entry to European markets. The whole procedure is strongly associated with the trend of relocation of production.

Displacement of yield in the Garment Industry

The global economy is now controlled by the exchange of yield where firms of developed countries swing their concentration to developing countries. The new representation is centred on a core-periphery law 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 yield procedure. Reducing costs and addition yield are the main causes for this disposition. They have discovered that the simplest way to undercharge is to move yield to a country where labour payment and yield costs are lower. Since developing nations contribute areas that do not enforce costs like environmental degeneration, this practice protects the developed countries against the issues of environment and law. The exchange of yield to Third World has helped the expansion of economy of these nations and also speed up the economy of the developed nations.

Garment industry is controlled by the exchange of production. The globalisation of garment yield started earlier and has extensive more than that of any other factory. The fellowships have transferred their blue-collar yield activities from high-wage areas to low-cost manufacturing regions in industrialising countries. The enhancement of transportation law 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 industry 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 including 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 become the world's major maker 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 distinction accelerated the world apparel exports from billion in 1965, with developing nations production up just 14 percent of the total, to 9 billion in 1991, with developing nations contributing 59 percent. In 1991 the whole of workers in the ready-made garment industry 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 suspect 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 in general 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 explore the market for Bangladesh in any nations of the North. Large sell trading fellowships placed in the United States and Western Europe give most orders for Bangladeshi garment products. fellowships like Marks and Spencers (Uk) and C&A (the Netherlands) control capital funds, in proportion to which the capital of Bangladeshi owners is patience. Shirts artificial in Bangladesh are sold in developed nations for five to ten times their imported price.

Collaboration of a native underground 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 industry 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 investment 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 considerable juncture, when import reforming was going on in this market following the signing of Mfa in 1974. Daewoo, a South Korean important exporter of garments, was in quest 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 occasion to export without any constraint and for this cause Daewoo was involved 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 market 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 slave who was seeking more entrepreneurial pursuits.

To fulfil this wish, Daewoo signed a collaboration contract with Desh Garment for five years. The contract also incorporated the fields of technical training, buy of machinery and fabric, plant preparation and marketing in return for a definite marketing commission on all exports by Desh during the contract 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 develop the plant for Desh. The end corollary 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 every year average rate of 90%, reaching more than million in 1986/87.

It is claimed that the Desh-Daewoo alliance is a considerable 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 occasion trainees most left Desh enterprise at any times to erect their own contentious garment companies, worked as a way of enthralling knowledge all straight through the whole garment sector.

It is considerable to identify the outcomes of the process of enthralling yield from high pay to low pay nations for both developing and developed 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 yield from developed to developing nations, in some circumstances, can have troublesome effects on social life if - in the absence of efficient 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 corollary is that the rise in employment and/or earnings is not unbelievable to be satisfactorily large and farranging to lessen inequality. In association with the negative results of relocation of manufacturing on employment in developed countries, we realize that in comparatively blue-collar industries, the growing imports from developing nations lead to positive losses in employment. It is held that development of trade with the South was a considerable suspect of the disindustrialisation of employment in the North over past few decades.

After all employees who are constantly 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 straight 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 health problems were more common diseases. The garment factories gave bonus of different diseases to the employees for working. With a view to looking out a link in the middle of these diseases and market threats, health 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 health before they entered the garment factory. The reasons of health declines were market threats, unfavourable working environment, and want of staff facilities, inflexible terms and conditions of garment employment, workplace pressure, and low wages. different work-related threats and their influence on health forced employees to leave the job after few months of joining the factory; the average distance 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 safety was the fire in November 2000, in which practically 50 workers lost their lives in Narsingdi as exist doors were closed.

From the above pathology 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 fellowships are guilty of pitiable working atmosphere in the garment sector. The developed nations want to make more behalf and therefore, force the developing nations to cut down the manufacturing cost. In order to survive in the competition, most of the developing nations select 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 contentious 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 industry of Bangladesh, we can say that this is the right time to corollary a contentious policy, which improves quality. If the Mfa opportunities are eliminated, will it be feasible to keep the competitiveness straight through low-wage-female labour or straight through supplementary drop in female wages? perhaps not. Since the labour charges are so minimal that with such wage, a laborer is not able to say even a family of two members. Improving the efficiency of female workers is the only clarification to increased competition. Proper education and standard training can help perform these positive results. To rule the global market, Bangladesh has to come out of low wage and low yield complicated in the garment industry. Bangladesh can heighten labour yield straight through constant training, use of upgraded technology and good working environment. Bangladesh should plan a strategy intended for promoting skill development, speeding up technology exchange and Improving productivity height of the workers.

Another method is to adopt best law or ethical course. Those companies, which react to heightened competition by stressing quality, rapid retort 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 ability over cost-reduction policy. The objective of turn efforts at the workplace has been modified over the time - from production the job humane in the 1960s, to job satisfaction and yield in 1970s, to ability and competitiveness in the 1980s. It is considerable for a enterprise to pursue a contentious procedure that improves quality, flexibility, innovation and customer care. If they rely on low costs by dropping labourers' wages and other services, they will be bereaved of labourers' dedication to work.

Strength

. considerable Qualified/keen to learn workforce ready at low labour charges. The recommended minimum average wages (which comprise Travelling Allowance, House Rent, curative 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, covering the Bepz the wages are about 40% lower:

. Power at low price

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

. Accessibility of fundamental infrastructure, which is about 3 decade old, in general 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 developed Country applicable (Duty free to Eu)

. Improved Gsp advantages under Regional Cumulative

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

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

. Opic's (Overseas underground investment Corporation, Usa) assurance and finance agendas operable

. Bangladesh is a member of Multilateral investment guarantee agency (Miga) under which safety and safety measures are available

. Adjudication service of the International Centre for the settlement of investment Dispute (Icsid) offered

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

. Frailness of currency against dollar and the health will persist to help exporters

. Bank interest@ 7% for financing exports

. Convenience of duty free practice bonded w/house

. Readiness of new units to heighten systems and create infrastructure accordant with product increase and fast reactions to circumstances

Weakness
. Lack of marketing tactics

. The country is deficient in creativity

. Absence of surely on-hand middle management

. A small whole of manufacturing methods

. Low acquiescence: there is an international pressure group to drive the local producers and the government to implement social 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 market workers, supervisors and managers.

. Autocratic arrival of nearly all the investors

. Fewer process units for textiles and garments

. Sluggish backward or forward blending procedure

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

. Speed money culture

. Time-consuming practice clearance

. Unreliable dependability regarding Delivery/Qa/Product knowledge

. transportation gap created by incomplete knowledge of English

. Field to natural calamities

Opportunity

. Eu is willing to develop industry in a big way as an selection to china particularly for knits, including sweaters

. Bangladesh is included in the Least developed Countries with which Us is committed to heighten export trade

. Sweaters are very economical even with china and is the prospect for Bangladesh

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

. Foundation garments for Ladies for the Fdi promise is considerable because both, the technicians and extremely developed machinery are considerable for good competence and output

. Japan to be observed, as conventionally they buy handloom textiles, home furniture and garments. This section can be encouraged and extensive with continued expand in quality

Threat

. The exporters have to get ready themselves to harvest the advantages offered by the opportunities.

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