Policy Dialogue Series
No. 20
21 August 2007

Title of the presentation: Prospects of RMG Sector in Bangladesh
Speaker: Md. Fazlul Hoque, President, BKMEA
The Ready Made Garments (RMG) industry is the most
important sector driving the economy as a whole.
During the last fiscal year, the RMG’s total export worth
was $9.2 billion. In context of Bangladesh’s total export,
RMG’s contribution is approximately 76%. Over the
years, this sector has had around 18% growth rate.

Md. Fazlul Hoque, President, BKMEA

The RMG sector faced several problems in the last fiscal
year of 2006. In May 2006, there was labor unrest and
the last quarter of 2006, witnessed political unrest as
well. Because of these reasons, some buyers shifted their
order to other countries like China and Cambodia.

The garments industry has suffered because of the warmer winters in the western
countries. For example, during the second week of January, it was around 12-14
degrees in Europe whereas 5 degrees in some places of Bangladesh. Usually, orders
are placed during the terms of March to June. However, because of the various
problems, there was less order placed for the winter clothes. Due to these problems,
for the first time in 5 years, the RMG sector could not reach its set target.
The RMG sector was also affected by the 9/11 which had an impact on the world
economy. The national growth rate was 5-7% and during the last 10 years, knitwear’s
growth has been around 28%. However, despite the various challenges, RMG has had
a significant contribution to the economy of Bangladesh. It has generated
employment and contributed to trade.
Potential problems to the RMG sector:
The main problems highlighted by the speaker were:
1. EU and China
2. Investment
3. Social Compliance
EU and China: The strategic partnership between China and the EU is of
immense importance, not just in terms of trade but also in terms of the effect it
will have on other...