The Garments Industry in Bangladesh

Fukunishi ed., Dynamics of the Garment Industry in Low-Income Countries: Experience of

Asia and Africa (Interim Report). Chousakenkyu Houkokusho, IDE-JETRO, 2012.

Chapter 6

The Garment Industry in Bangladesh

Mohammad Yunus and Tatsufumi Yamagata

Abstract

The garment industry in Bangladesh has been expanded almost uninterruptedly since

the late 1970s. It survived Multi-Fiber Arrangement (MFA) phase out at the end of

2004, and remains internationally competitive to date. In this chapter, sources of

competitiveness of the industry were discussed. There are three potential strengths, i.e.

market force, government policy and dynamism inside the industry. Market force,

which is represented by low wage of labor, is surely fundamental to the

competitiveness. The roles of the government, industrial associations and technology

transfer are still contentious issues to be discussed in the final report.

Keywords: Garment industry, Bangladesh

1 Introduction

Everywhere, the industrial sector has been the driver of growth as countries have moved

from low- to middle-income status. Bangladesh as a country with a poor land-person

ratio is unlikely to prosper through agricultural growth alone. The average productivity

of industry is higher than in agriculture. As people move out of agriculture into industry,

the sector can provide high-wage employment for large numbers of workers and can

raise social productivity by producing high-value goods on a mass scale. Besides, poor

countries can also earn valuable foreign exchange by exporting manufactured products

and the ensuing foreign exchange can be used to invest in new vintage of machines and

technologies so that a rapid move up the technology ladder becomes possible. The

1

importance of industrial development as an engine of Bangladesh's economic growth is

also reinforced by a growing realization that the development of agriculture sector, one

of the mainstays of the country's economy, critically...