Written by Anaynna Mahjebin
Bangladesh stands as the 2nd largest exporter of garments or as said readymade garments provider in the world, securing its place tightly being a developed country around the globe. Through a lot of studies, it has been noted that 80% of Bangladesh’s total export earnings come from this RMG sector. Experiencing an annual increment from $19 billion to $34 billion according to an article by (IFC, World Bank Group). Though Bangladesh RMG industries did go through a lot of hurdles especially in the years 2012 and 2013, resulting in the loss of a huge amount of labor, Bangladesh was able to get back on its track booming its business once again to date. However, the recent pandemic did hit hard a little bit by bringing down 3% of the earning rate, still, the RMG industry is standing on its feet bringing growth in the economy of Bangladesh.
A lot of effects can be reported under this sector, however, today we will be specifically looking at some major impacts that the RMG industries brought in the GDP of Bangladesh. The readymade garments factories are a labor-intensive industry, needing very simple manufacturing processes to complete a final product. Thus, introducing us to our first contribution to the economy of Bangladesh.
CREATING JOB OPPORTUNITIES – LARGE LABOUR POOL
This is one of the biggest contributions the RMG industries provided to the economical growth of Bangladesh, creating a huge sector for employment for the locals starting from factory workers, supply chain workers & managers, executives, managers, accountants, back-office workers, data tracker, etc. Holding one of the top positions in the country in regards to opening up works for all levels of people including skilled workers, as well as, unskilled workers. In addition, another very important factor can be noticed, that is this industry created a huge opportunity for the female workers, providing them with jobs. Hence, the RMG industries are contributing both to the social development and economical growth of the country and showcasing an 80% increase in the female employment rate in recent years.
Furthermore, the industry has developed itself by furnishing better labor management through proper supervision and improving the safety context, with a better work atmosphere for the workers. This, however, is now attracting the young employers to join the big industry, allowing them to have growth in their career and safely landing the responsibilities onto the hands of educated young who are exemplified as the future of the nation. This in turn, also letting the industries know about new different technics, processes and the importance of providing training to the workers who can learn very easily through practical knowledge rather than theoretical lessons. Having said that, this does also have one downside which is getting cheaper labor, or the workers not being paid high, which can also be seen as a positive side for the industry owners.
LOCALS ENJOYING CHEAPER CLOTHES – SMALL RMG BUSINESSES BOOM
Moving onto our next endowment, these big RMG industries have been helping the locals to build up their small businesses within the cities or towns providing them with an earning source. Therefore, this, in turn, is also letting the people of Bangladesh buy good quality garment products at affordable prices, from its local marketplace. Hence, the locals are enjoying good clothing keeping them up to date with the new fashion trends at good prices.
To shed some more light on the factor that small business is booming, could be better understood by reading the following statement that was made by a local seller named Rohim who owns a small shop in the Noorjahan market, which is located just opposite of Dhaka New Market, the busiest market area of the capital Dhaka where the biggest crowds have been noted since previous two decades. Rohim a local who came to Dhaka from Jamalpur in search of work said “ I can run my household, and provide tuition fees for my daughters because of the opportunity that the garment industries gave us, by allowing us to buy good clothes in bulk amount and not charging much” (collected this information personally)- this gives us a more clear vision, how the RMG industries are not only developing in the export business but also ensuring the locals to set up businesses as an earning source.
EXPORT EARNINGS INCREASED- MORE FOREIGN CURRENCIES
Last but not the least, there is another major impact that the RMG industries have brought on the growth of the Bangladesh economy. In an article (Patwary,2019, Daily Sun) it has been pointed out that Bangladesh has earned foreign currency around $40.2 billion within the last fiscal year, crossing the target which was set by the government by $1.2percent more. Therefore, for the past 25years, foreign exchange has remained the main source of income for the Bangladesh economy.
The exporters are assuming that the inclination of safety and cooperativeness has been proving the growth in foreign earnings. They have also stated that the willingness of searching for new destinations to sell the RMG products and able to attract new buyers have also played a huge role in bringing more funds from overseas. Henceforth, capturing and earning a place in the global market by hunting down clients from around the world have proven a good technic.
This allowed the government to explore more sectors for improving the export industries of Bangladesh, and it can be mentioned that the export industry of Bangladesh will grow more with possible sectors like jute, pharmaceuticals, leather, and many more. Meaning more diversifications in products can increase the export market of Bangladesh within the coming years.
To summarize, it can be said that more incoming RMG earnings mean more growth in the economic sector of the country. More development of RMG industries regarding technology and sustainability will generate a strong position in the global market and more flourishment in the future.
References
Fathi, Nazila. “Safety first: Bangladesh Garment Industry Rebounds”. IFC Insights.
Uddin, Mostafiz. “RMG industry as the major employment sector”. The Daily Star, 17th February, 2019.
Patwary, Sohel Hossain. “RMG industry keeps dominance in export earning”. Business-Daily Sun, 8th July, 2019.
www.daily-sun.com/printversion/details/405464/RMG-industry-keeps-dominance-in-export-earning-
