Garments Industry of Bangladesh
Employee Monitoring Software
Bangladesh is mostly known as agriculture based country. Since the liberation from Pakistan, most economic development plans therefore had been planned based on the agricultural sector. But later on Bangladesh started focusing on the export industry; specifically in jute and tea. Throughout late 1970s and 1980s, jute and jute made goods were the most exported products.
But now things are different. Due to the key factor of cheap production cost, Bangladesh has made tremendous amount of progress in exporting ready-made garments. Over a very short period, a ready-made garment has become the number one exporting industry. In fact, Bangladesh is currently the second largest RMG exporting country in the world.
More than three million people are working actively in this sector. It has played a big role in the empowerment of women as 90% of the workers in garments factories are women. Currently the industry is producing approximately $6 billion of product every year. Two very important elements have played a significant role in making garments industry so big in this country. These are: – Multi-Fibre Arrangement for North American market and special entry in EU countries.
There are several reasons why RMG industry of Bangladesh achieved so much success in so little time. These are:
1. Bangladesh has one of the cheapest workforces in the world. Apparel labor cost in USA is $10.12 per hour but it is just $0.30 per hour in Bangladesh. The set minimum wage within Export Processing Zones include house rent, medical allowance, travelling allowance, festival allowance, overtime bonus and maternity allowance. Average wage is 40% lower outside EPZs.
2. The cost of energy and fuel is very low.
3. FDI is encouraged by the government and several privileges are awarded to 100% foreign invested companies.
4. Chittagong and Mongla sea ports are used greatly for the purpose of shipping garments products.
5. Duty-free for the European Union countries.
6. Transportation infrastructure is easily accessible
7. Very close to Duty-free access to the North American market
8. Just 7% bank interest for export oriented companies
There is a possibility that Bangladesh will soon become the largest RMG exporting country as the current number one China, started to outsource their orders. The production cost in China is rapidly increasing due to the usage of eco-friendly machineries. Therefore importers are starting to back out of China and move towards Bangladesh.
Till this date political instability and power crisis remains the biggest hindrance for the full progress of garments industry. Once these two issues are sorted out, things will be even better. The economic development of Bangladesh is depending heavily on the garments industry. Therefore it is of utmost importance to remove those two factors as soon as possible so that RMG industry of Bangladesh reaches its peak of success.
A Software & Application Development Company