The clothing and garment industry in Bangladesh has undergone a significant transformation since the 1980s. This industry has not only reshaped the country’s economy but also influenced societal norms by providing opportunities for millions of women. This article offers a comprehensive overview of the evolution and growth of this vital industry in Bangladesh.
Genesis of the Garments Industry in Bangladesh
In the early 1970s, Bangladesh’s gross domestic product (GDP) was a mere US$6.29 billion. However, over the ensuing decades, it experienced exponential growth, reaching $353 billion by 2021, with a considerable chunk of this economic surge attributed to the booming garment industry.
The late Nurul Quader Khan is often recognized as the garment industry’s pioneer in Bangladesh. He sent 130 trainees to South Korea in 1978, setting the foundation for the first garment factory, Desh Garments, dedicated to exports. This initiative sparked a wave of new businesses, with entrepreneurs setting up multiple garment factories across the country.
The Rise and Challenges of the Garment Industry
From its humble beginnings in the 1980s, the garment industry faced several hurdles but managed to establish itself as a global player. A significant turning point came in 1994 when the industry faced severe criticism over child labor. However, the industry responded swiftly, beginning earnest efforts to combat child labor by 1995.
The 1980s also witnessed major changes with the introduction of the New Industrial Policy (NPI) under President Hussein Muhammad Ershad. This policy spearheaded the privatization of the textile industry, the establishment of export processing zones (EPZs), and the attraction of foreign direct investment.
Emergence and Dominance of the Garment Industry Post-1980
The 1980s marked the emergence of the garment industry as the main export sector and a critical source of foreign exchange. By 2005, the ready-made garments (RMG) industry had become the only multi-billion-dollar manufacturing and export industry in Bangladesh. Today, garment exports primarily to the US and Europe constitute nearly 80% of the country’s export income.
Influence and Evolution of the Readymade Garment (RMG) Sector
The RMG sector began with small factories. However, with high profits and reinvestments, the sector grew with an emphasis on productivity and expansion. Foreign companies, especially Korean companies like Youngone, played a critical role in imparting technical and marketing expertise and promoting female employment.
As the industry expanded, subcontracting emerged as a crucial practice, balancing production capacity with order size. In recent years, factories have become larger, allowing for better compliance management and paving the way for increased automation. This shift towards automation is vital for maintaining competitiveness and facilitating higher wages.
The Role of International Trade Policies
International trade policies have significantly shaped Bangladesh’s garment industry. In 1985, the United States and Canada introduced import quotas on Bangladeshi textiles. Nonetheless, Bangladesh met each quota annually and negotiated higher quotas in subsequent years.
The WTO Agreement on Textiles and Clothing (ATC), active from 1995 to 2005, further bolstered the industry. This agreement enabled countries like Bangladesh to enjoy increased quotas for their textile exports, providing it with quota-free access to European markets and preferential quotas for American and Canadian markets.
Government Policies and Future Prospects
The Bangladeshi government’s policies have contributed significantly to the RMG sector’s growth and will continue to play a key role in its future prospects. The government has supported the industry’s expansion through favorable trade policies and initiatives aimed at improving safety standards and workplace environments. Such measures have not only fueled the industry’s growth but also have helped enhance Bangladesh’s global image as a responsible and competitive apparel exporter.
Today, the RMG sector provides employment to over 4 million workers. With a large labor pool, Bangladesh has the potential to further scale up its production capacity to meet growing international demand.
Furthermore, global economic dynamics could also bolster the future growth of the sector. Rising production costs in China, the world’s largest apparel exporter, may push international brands to diversify their sourcing to other countries. As the second largest apparel exporter globally, boasting a 6.8% market share as of 2016, Bangladesh is well-positioned to benefit from this potential shift.
Finally, the ongoing adoption of newer technologies and innovative practices within the sector is set to enhance productivity and competitiveness. As a result, it remains poised for substantial growth in the coming years, offering a promising future for the RMG sector in Bangladesh.
By ensuring structural transformation, including the closure of smaller factories and expansion of larger ones, the industry can reach its ambitious export target of $50 billion. This transition, expected to occur over the next six to seven years with careful planning and cooperation, will usher in a new era of prosperity for the Bangladeshi RMG industry.
From its humble beginnings in the 1980s to becoming the cornerstone of the country’s economy, the garment industry in Bangladesh has indeed journeyed a long way. Faced with numerous challenges, this resilient industry has not only thrived but also transformed societal norms by providing employment opportunities to millions, a significant proportion of whom are women.
Crucial to this growth and evolution has been a combination of factors – the visionary leadership of pioneers such as Nurul Quader Khan, the strategic establishment of garment factories across the country, the transformative impact of international trade policies, and the significant role of government initiatives. These factors have collectively established Bangladesh as a leading global exporter of apparel.
Looking ahead, the future of the Ready-Made Garments (RMG) sector in Bangladesh is promising. As the world’s second-largest apparel exporter, Bangladesh is well-positioned to capitalize on global market dynamics. Further, with continuous government support, adoption of advanced technologies, and ongoing enhancements in safety standards and workplace environments, the RMG sector is set to maintain its competitive edge and growth trajectory.
This journey of the garment industry is reflective of Bangladesh’s broader economic transformation from a predominantly agrarian economy to a manufacturing and export-oriented one. As such, the garment industry serves as a testament to the country’s resilience, adaptability, and unwavering pursuit of growth. Its evolution and future prospects stand as a beacon of hope for other sectors in the country, underlining the potential that lies within concerted effort and strategic planning.
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