Ready Made Garments (RMG) in Bangladesh

Ready Made Garments (RMG) in Bangladesh

The Ready Made Garments (RMG) sector has emerged as the backbone of our economy and as a catalyst for the development of our country and the biggest earner of foreign currency. The “Made in Bangladesh” tag has also brought glory for the country, making it a prestigious brand across the globe.

In 1972, the World Bank approximated the gross domestic product (GDP) of Bangladesh at USD 6.29 billion, in 2014, the GDP stood at USD 173.82 billion, growing by almost 27 times in a matter of four decades.

Bangladesh’s exports industry alone comprised USD 31.2 billion in FY 2014-15, 81.69% of which was made up by ready-made garments. On its own, the knitwear sector encompasses 39.83% of total exports—a staggering USD 12.43 billion.

The RMG sector has experienced an exponential growth since the 1980s.The country with its limited resources has been maintaining 6% annual average GDP growth rate and has brought about remarkable social and human development. It also provides employment to around 4.2 million Bangladeshis, mainly women from low income families.

History Of Ready Made Garments (RMG) Bangladesh:

The 60th decade of 19th century was first established of the foundation of textile sector. 1950 was the beginning of Ready Made Garments (RMG) in the Western world.For the first time, the industry exported shirts (Mercury shirt) to the European market in 1965-66, which was produced from Karachi. In order to control the level of imported Ready Made Garments (RMG) products from developing countries into developed countries, the Multi Fibre Agreement (MFA) was made in 1974. The MFA imposed an export rate 6 percent increase every year from a developing country to a developed country.

In the latter, 9 exporting industries were available in 1977-78. The three largest industries in that time were Riaz Garments, Jewel Garments and Paris Garments. Among those, Riaz Garments was the most famous and oldest industry in that time. In the early 1980s Bangladesh started receiving investment in the RMG sector. Some Bangladeshis received free training from the Korean Company Daewoo. After these workers came back to Bangladesh, many of them broke ties with the factory they were working for and started their own.

With those trainees, he set up the first factory “Desh Garments” to produce garments for export. At the same time, the late Akhter Mohammad Musa of Bond Garments, the late Mohammad Reazuddin of Reaz Garments, MdHumayun of Paris Garments, Engineer Mohammad Fazlul Azim of Azim Group, Major (Retd) Abdul Mannan of Sunman Group, M Shamsur Rahman of Stylecraft Limited, the first President of BGMEA, AM Subid Ali of Aristocrat Limited also came forward and established some of the first garment factories in Bangladesh.Ready made garments (RMG) in Bangladesh

Following their footsteps, other prudent and hardworking entrepreneurs started RMG factories in the country. Since then, Bangladeshi garment industry did not need to look behind. Despite many difficulties faced by the sector over the past years, it has carved a niche in world market and kept continuing to show robust performance.

Since the early days, different sources of impetus have contributed to the development and maturity of the industry at various stages. We learned about child-labour in 1994, and successfully made the industry free from child labour in 1995

Women In The Ready Made Garments (RMG) Industry:

The Ready Made Garments (RMG) Industry is, and has historically been, one of the most female-dominated industries in the world.The garment industry in Bangladesh has played a significant role in economically uplifting a large cohort of poor and vulnerable women. The opportunity to be gainfully employed has served as a repellent against early marriage and in turn reductions in fertility. Today, more than 70% of garment workers in China are women, in Bangladesh the share is 85%, and in Cambodia as high as 90%.

For these women, development is closely linked to their conditions at work. It’s about gaining a decent pay, working under dignified conditions and having basic work security. It’s about moving out of poverty, being able to provide children with education, and to become more independent and grow as an individual.

The reality for most garment workers in the Global South is far from here. Although producing for some of the most profitable companies in the world, they are working for poverty wages, under dreadful conditions, and they have to undertake an excessive amount of overtime. In Bangladesh (the world’s second largest exporter of clothe) the minimum wage for garment workers is 5,300 taka (£45/€62) per month which is far from the 8,900 taka (£75/€104) that are needed to cover a worker’s basic needs, and even further away from a living wage. Many garment workers are working between 60 and 140 hours of overtime per week and it is common to be cheated of the overtime pay. Health and safety are often neglected, workers are denied breaks, and abuses are common – to mention a few of the problems in the industry.

 

Wages & Efficiency In The Garments (RMG) Industry:

In Bangladesh in BBW factories the project found no incidence of forced labour, non-payment of minimum wage, child labor and harassment and reduced incidence of coached workers, double books and hours over 60 per week, whereas in non-BBW factories, we found forced labour, in the form of illegal deductions from salaries, in 50% of sites, non-payment of minimum wage in 11%, child labour in 13%, harassment in 57%, coached workers in 18% and double books in 43%.

The lives of RMG sector employees in Bangladesh are not up to the standard it should be. In addition to the financial concerns that have been the primary focus of this paper to here, they are also deprived of indirect benefits that they are supposed to have. Some of the major sufferings of this sector’s employees are discussed below.

Minimum Wage in Bangladesh’s Ready-made Garment Sector: Impact of Imbalanced Rates on Employee and Organization Development (PDF Download Available). Available from: https://www.researchgate.net/publication/299411195_Minimum_Wage_in_Bangladesh%27s_Ready-made_Garment_Sector_Impact_of_Imbalanced_Rates_on_Employee_and_Organization_Development [accessed Jul 25, 2017].

TOTAL EXPORT OF The Ready Made Garments (RMG) Industry Bangladesh

The Ready Made Garments (RMG) was recorded that in FY 1983-1984 RMG sector contributed only 3.89% (RMG export value was 31.57m USD and total export value was 811.00mUSD) of total export of Bangladesh [4]. But it changes phenomenally in last three decades. In FY 2012-2013 RMG contributed 79.63% (RMG export value was 21515.73m USD and total export value was 27018.26m USD) [2]. In the month of July’13 to Apr’14, it contributed more than 80% of total export value [2]. So In fiscal year 2013-2014 hopefully it will contribute more than 80% of total export of Bangladesh.

Ready Made Garments (RMG) in Bangladesh

COMPARATIVE STATEMENT ON TOTAL EXPORT OF BANGLADESH AND EXPORT OF RMG

YEAR EXPORT OF RMG TOTAL EXPORT OF BANGLADESH % OF RMG’S TO TOTAL EXPORT
(IN MILLION US$) (IN MILLION US$)
1983-84 31.57 811 3.89
1984-85 116.2 934.43 12.44
1985-86 131.48 819.21 16.05
1986-87 298.67 1076.61 27.74
1987-88 433.92 1231.2 35.24
1988-89 471.09 1291.56 36.47
1989-90 624.16 1923.7 32.45
1990-91 866.82 1717.55 50.47
1991-92 1182.57 1993.9 59.31
1992-93 1445.02 2382.89 60.64
1993-94 1555.79 2533.9 61.4
1994-95 2228.35 3472.56 64.17
1995-96 2547.13 3882.42 65.61
1996-97 3001.25 4418.28 67.93
1997-98 3781.94 5161.2 73.28
1998-99 4019.98 5312.86 75.67
1999-00 4349.41 5752.2 75.61
2000-01 4859.83 6467.3 75.14
2001-02 4583.75 5986.09 76.57
2002-03 4912.09 6548.44 75.01
2003-04 5686.09 7602.99 74.79
2004-05 6417.67 8654.52 74.15
2005-06 7900.8 10526.16 75.06
2006-07 9211.23 12177.86 75.64
2007-08 10699.8 14110.8 75.83
2008-09 12347.77 15565.19 79.33
2009-10 12496.72 16204.65 77.12
2010-11 17914.46 22924.38 78.15
2011-12 19089.73 24301.9 78.55
2012-13 21515.73 27027.36 79.61
2013-14 24491.88 30186.62 81.13
2014-15 25491.4 31208.94 81.68
2015-16 28094.16 34257.18 82.01
2016-17 28149.84 34835.09 80.81

Source: Data Source Export Promotion Bureau Compiled by BGMEA