Cotton Bangladesh (CBD) :
Readymade garment (RMG) alone earned about 78% of the yearly
foreign exchange earning of the country reflecting on how it is
an important contributor to our national economy. How has the
government been facilitating this revenue-generating sector?
MD. Shafiul Islam (SI):
Government has been very supportive to BGMEA for a long time. We
started the journey in 1980s. All throughout we had different
types of support, but in the last ten months especially, we have
experienced a phenomenon growth. Behind this achievement, there
are a lot of factors involved, a lot of problems which had to be
overcome, and a lot more that we have been faced with this year.
Recently, there was an unprecedented price hike of raw
materials, which lead to an increase in our importation cost by
75%. So, even though our export has increased by nearly 42%, the
increase in importation cost, transportation costs, port
charges, banking charges, and the overall cost of doing business
has gone up, leading to an increase in the risk factor has gone
up by 30 to 35 %. Currently, we are experiencing a clear decline
in our RMG export.
CBD: How many locals are
currently employed in the RMG sector?
SI: 3.5 million people of
the entire population of Bangladesh are currently employed in
the RMG sector.
CBD: What is our current
amount of export?
SI: We have already crossed
14 billion dollars, and we are expecting to shift to 16 billion
dollars by the end of this year. As mentioned earlier, the scope
for development is immense, but there are certain factors that
need to be overcome.
CBD: What percentage of the
global garment demand is Bangladesh satiating at this point?
CBD: What is the role of
BGMEA is primary, secondary and tertiary levels of production,
and in the ultimate export of the goods?
SI: We are providing service
to our members, and we are giving facilities like regulating
certain authorities of the government. We mostly engage
ourselves for the welfare of our workers, safeguarding the
industry, co-operating with the government with the making of
policy, and suggesting when not to adopt certain policies that
affect the RMG sector.
CBD: How did the recent
Budget reflect the problems of the RMG sector, and is it
facilitating the growth of this sector?
SI: In this year's budget,
we have been noticing the reflection of this present situation.
The unsold inventory, the high competition with neighboring
countries like China, India, etc., who are trying to grab their
buyers, are leading to a decreased export for Bangladesh, as
buyers are shifting to the countries with the competitive edge.
Moreover, the recovery from recession of USA has not taken
place, and economists are suggesting chances of a double-dip
recession. If we compare with last month, their unemployment
rate had risen and is now at 9.1%, and this is indicating a
scary situation in the US economy which is bound to affect our
RMG exports. Then, there's the issue of world fuel price, and
the volatile political conditions in the Middle-east, we can not
expect the fuel prices to go down any time soon.
If we look at Europe: Greece, Portugal and Ireland are in debt,
and the other wealthier countries like Germany and France are
trying to rescue them. So, the overall world consumption of
apparel has gone down, unlike what we had expected for this
decade. At the same time, Turkey has imposed a safe guard duty,
which was a potential market for us. Japan has opened up for us
bilaterally, but India has the same access to export their goods
with zero duty, so we may lose to the competition. So, the
proposed budget has imposed duty from 0.40 to 1.5, which is a
very dangerous step for the government to take, which may become
suicidal for the RMG sector.
CBD: How can we overcome
these hurdles and gain a competitive edge over neighboring
SI: In Bangladesh, we have a
resilient entrepreneur, and hard working workers. These are the
only two things that we have. We do not have uninterrupted
electricity or gas supply, we have numerous infrastructure, the
Dhaka-Chittagong Highways problem, traffic in the city, and so
on. Every single day, we are fighting these hurdles and remain
competitive. But ultimately, these elements will stand in the
way for future growth.
Positive Steps From The Government:
1. Development of Infrastructure is being dealt with by the
government. They have allocated a higher budget for electricity
2. Dhaka-Chittagong highway is being changed from two lanes to
four lanes. We think that current requirement is nearly six
lanes, but still it is a good improvement.
3. 1400 MW has been added in national grid of electricity
Negative Thing about the Government:
1. Huge budget deficit is around 45 thousand crores, and we did
not see any sort of proposal as to how they are going to
negotiate the present inflation.
2. In the future, there will be a huge pressure on the foreign
currency, especially on two sectors: RMG industry and
remittance. However, in the near future, we do not see any
chance of these sectors blooming.
3. Gas sector is still a big failure for the govt., affecting
the RMG sector, and very soon investment will decrease, because
infrastructure is of utmost importance.
CBD: RMG is a controversial
sector when it comes to labour rights. What is the role of the
BGMEA when it comes to protecting the rights of the RMG workers?
SI: The wage board has
announced the new wage, which is an 80% increase in their
salary, so the question of financial deprivation does not arise
anymore. And like I said, the BGMEA is always looking out for
its workers by suggesting policy changes.
CBD: as the newly elected
president, what new policies do you plan to implement to help
BGMEA and the Bangladeshi garment sector move forward?
SI: Just like my
predecessors, my goal is simply to serve the industry, remove
the barriers of industrialization, pursue and lobby the
government regarding our sector, and help in designing policies
which will make a business friendly environment. So, we act as a
facilitator and service provider for our members. ¨