Essay on Garments Business in Bangladesh

21239 Words Aug 29th, 2013 85 Pages
1. Introduction

After independence in 1971, Bangladesh moved to a private sector led export oriented economy in late 1970’s from a highly protected government led economy in search of prosperity and growth. Even though there was little growth and development in the country as a whole; one particular sector, the Readymade Garment (RMG) industry was the beneficiary of privatization. From 0.2 percent in 1980’s, it came to 75 percent in 2004-05 of country’s total export. This industry employs 1.8 million people of whom 90 percent are women. Trade liberalization as a form of globalization followed by the imposition of quotas by US was the key input while entrepreneurs played the anchor role to take advantage of these conditions. Government
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Section 3 reviews the literature related to the garment industry while section 4 and 5 discusses methodology and the information of the interviewees respectively. Section 6 and 7 examines how and why the firms started their garment business and the factors contributed to the rise of the RMG industry of Bangladesh respectively.

In section 8, based on the field work, the study analyses industrial upgrading that has taken place over the year in the apparel industry through global supply chain concept. The study explains the insertion of Bangladeshi firms into the global supply chain by the lead firms i.e. buyers of the developed world and the effects of insertion to the firms’ capability of survival and growth. Section 9 explains the key factors for the industry’s growth, which are infrastructure, compliance, information technology, capacity building and regional cooperation and searching for new markets especially China. Then section 10 concludes the dissertation.

2. Background

2.1. Global Picture of Apparel Trade before MFA

The apparel trade is considered as one of the most ancient and global export industries in the world (Dickerson 1999, USITC 2004). As a leading sector of globalization, the garment industry continues to increase its share in manufacturing communities in the world market. In fact, the growth is faster than any other trade in manufacturing activity (Ramaswamy and Gereffi 1998)

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