Clicky
Editorial

Address and fix the challenges in RMG sector

To seize the opportunities created by US-China trade war


Bangladeshpost
Published : 19 Jun 2019 05:40 PM | Updated : 05 Sep 2020 07:33 AM

As the US-China trade war intensifies, American retailers have started placing more work orders with Bangladesh in order to offset increasing tariffs. Experts opine that because of the widening trade dispute between the world’s two biggest economies, lion’s share of RMG exports from China to the US now would be diverted to Bangladesh and other potential RMG manufacturing countries like India, Vietnam, Chile and Mexico.  It is needless to say that such a situation has opened up a  window of opportunity for Bangladesh to give a boost to its export earnings. In this regard, Bangladesh needs to undertake massive plans to develop skilled manpower in Ready-Made Garments (RMG) in order to invite foreign investments.

The government has been developing new policies in a bid to invite more foreign investment, particularly focusing on capacity building of the factories overall.  Creating a good image across the world for running environment-friendly industry, the readymade garments industry has witnessed a steady growth over the last few years. Experts assert that Bangladesh needs over 13 per cent growth for achieving the USD 50 billion export target.



It is high time to address and 

fix the existing challenges in RMG 

sector so that we can reap benefit from the 

consequences of US-China trade war


But increasing production cost has become an overwhelming challenge to the country’s leading export earning RMG sector. A total of 18 percent increase in production cost has occurred over the last two years. Hence, it is high time for the authorities concerned to devise prudent actions to decrease the production cost. Also Bangladesh needs some fiscal support from the government, including reducing the timeframe to discharge export items from ports as well as improving communication systems which can help boost the export flow further.

Bangladesh has completed almost 90 percent of the requirements set by Accord and Alliance. The country had made impressive progress in addressing key Occupational Safety and Health (OSH) and working condition issues in the garment sector over the last four years.  But still there are numerous challenges like low productivity, shortage of mid-level management professionals and limited backward and forward linkages that need to be addressed for further expansion of the country’s RMG sector. Therefore, relevant authorities should come up with effective measures to address and fix the existing challenges in RMG sector so that Bangladesh can reap benefit from the consequences of US-China trade war.  Also new and potential markets must be explored for diversification and sustainability of the sector. It is crucial for Bangladesh to work on a favourable policy regime to seize new opportunities as they come by, and to provide enabling conditions for more foreign direct investments—all by avoiding unintended risks and consequences.