Report on Internship

Term Paper on

Garments Industry & Withdrawal of

Quota : Its Impact on Bangladesh

Submitted by :

Dr. Md. Golam Mawla

Roll # 26

19th Foundation Training Course (BCS Health)

Academy for Planning & Development

Sonargaon Road, Nilkhet

Dhaka

Garments Industry & Withdrawal of

Quota : Its Impact on Bangladesh

Introduction:

The readymade garments (RMG) industry has grown as the largest export category in terms of foreign exchange earning (about 76%) during the 1990s that spurred export oriented industries (about 3,800) and increased employment opportunities (1.8 million). The domineering importance of RMG to the export earnings of Bangladesh has made our export configuration precarious and fragile. Our RMG export is characterized by lack of diversification in terms of product variety and export destination. In other words, high concentration on low-value added products, heavy dependence on imported raw materials and monumental (about 94%) reliance on few export destinations, mostly catering the needs of EU, USA and Canada have patterned our industry most vulnerable in the aftermath of MFA (Multi-Fibre Agreement) quota termination.

Growth of RMG sector in Bangladesh

RMG is the fastest growing industry in Bangladesh accounting for more than 75% of total exports. Bangladesh is best placed in the region for textile and garments. The phenomenal growth during the last one and a half decade is based upon low labour costs, large quota allotments from the US and GSP facility provided by the EU. But the overwhelming dependency on the export of low-cost products, employment of about 1.8 million workers in nearly 4000 factories, 90% of whom are women, low wage, low productivity, etc. are limiting the competitive advantage of the RMG sector, if any, that might be gained from low-cost production.

Bangladesh was enjoying quota-restrained export market in...