Situated in South Asia adjacent to India, Bangladesh was ranked as the 48th largest economy in the world in terms of gross domestic product (GDP) by the
International Monetary Fund (IMF) in 2008. The country’s per capita
income was US$ 621 in the financial year (FY) of 2008-09, with an
increase of US$ 62 compared to the previous year (2007-08), according
to figures of the Bangladesh Bureau of Statistics (BBS) announced in
June 2009 The textile and apparel industry is one of the biggest sources of
national economic revenue. About 75% of Bangladesh’s total export
earnings come from ready-made garment exports, according to experts at
the World Bank. The major markets are North America and Europe. .Ready-made
garment made in the country are mainly divided into woven and knit
products. Wovens are usually shirts, T-shirts and trousers, whereas
knits from Bangladesh are mainly intimate wear, stockings, sweaters and
casual wear Bangladesh’s textile and apparel industry has been greatly benefited
from quotas under Multi- Fibre Arrangement (MFA) in the North American
market until 2005 and the preferential market access to the European
Union. The apparel sector thereby grew phenomenally from US$3.5 million
in 1981 to over US$10 billion per annum in recent years..In the
fiscal year ended June 30, 2009, Bangladeshi knitted and woven apparel
exports reached US$12.35 billion, the government’s Export Promotion
Bureau said…Industry observers believed that as a number of
Asian textile and apparel factories closed down partly due to higher
wages and costs, some buyers shifted orders to new global sourcing
destinations. Bangladesh was one of the beneficiaries…Looking
ahead, Bangladesh has opportunities to boost apparel exports to the US
and the EU countries where the demand for low cost apparel is
increasing. However, it remains unsure how far the two major markets
will improve their economies in 2010…Public policy is also
crucial to boost Bangladeshi apparel industry. The government policy of
liberalization of the economy encouraged private sector investments.
Low cost energy and natural gas provides Bangladesh’s textile industry
with a competitive advantage in producing labor-intensive goods. A
large domestic market is also an advantage for the country’s apparel
industry…Cheap and abundant labor forces have been an advantage
for Bangladesh’s apparel industry. Wage of the garment workers was last
reviewed in 2006 to Tk 1662. With the rising living cost in these years
and unrest among the workers during 2008 and 2009, a number of leading
international buyers, including WalMart, H&M, Levis, Nike and
Tesco, expressed concerns in early January over the issue of wages in
the country. They wrote a letter to the country’s Prime Minister for
this matter. The wage issue, affecting over 4,000 factories and three
million workers, was yet to be settled by the end of January.