Words seem inadequate to express the delight and pride we felt like the citizens of Bangladesh while celebrating the golden jubilee of our country’s independence. It’s Bangabandhu Sheikh Mujibur Rahman who led Bangladesh to rise from the rubble of a war. Bangabandhu is not only the architect of independent Bangladesh, he also envisioned building a prosperous country with economic emancipation and social justice for its people.
In pursuance of Bangabandhu’s dream, Honorable Prime Minister Sheikh Hasina, the daughter of Bangabandhu Sheikh Mujibur Rahman, has been spearheading Bangladesh’s journey towards development. Under her visionary and prudent leadership, Bangladesh has moved a step closer to the dream of being qualified to graduate from LDC to a developing country. While the achievement makes us immensely proud, the feat also inspires us to dream even bigger.
Indeed, we have reasonable grounds to pin our high hopes for our country. Bangladesh has drawn global appreciation for its consistent performance in terms of GDP growth and remarkable achievement in socio-economic development.
Despite various challenges, Bangladesh has been able to maintain an impressive growth rate of more than 7 percent on average over the last four years. Our current per capita income is USD 2,227 while it was USD 676 in the FY 2008-2009, poverty rate declined to 20.5%, our total trade balance increased from USD38 billion to USD82 billion during the same time, foreign exchange reserve is crossing the records every month which is now at USD48 billion. Our Foreign Direct Investment also increased to USD2370 million in FY 2019-20 from USD 961 million in FY 2008-2009.
Much of this development has been propelled by industrialization as the industrial sector’s contribution to GDP increased to 34.78 percent in FY2019-20 from 17.31 percent in FY1980-81.
After Vision 2021, Bangladesh has declared Vision 2041 and aligned its strategies to achieve it. In Vision 2041, Bangladesh aims to achieve high-income status through industrialization. The materialization of the Vision will hugely depend on strong and steady industrial growth. The ready-made garment (RMG) industry has both capacity and potential to supplement Bangladesh’s Vision 2041.
The RMG sector has been playing a crucial role in the development of Bangladesh over the last 40 years. Around 83 percent of the country’s total export earnings come from RMG exports, as well as 11% of GDP. The industry has generated employment for 4 million-plus people; 60% of them are women coming from rural parts of the country.
While making a tremendous contribution to the economic transformation of Bangladesh, the apparel industry has made unprecedented strides in the areas of workplace safety, environmental sustainability and workers’ wellbeing. Bangladesh is today recognized as one of the safest apparel manufacturing countries globally. The industry has also made progress in green industrialization.
Bangladesh has the highest number of green garment factories in the world with 150 LEED (Leadership in Energy and Environmental Design) certified green factories. The achievements have emanated from the continuous strive of the industry to remain as a preferred choice of global apparel brands and buyers and retain Bangladesh’s fame as a safe, ethical and sustainable sourcing destination in the world.
The RMG industry of Bangladesh has ample opportunities to take and more contributions to make. As we look forward, we will work to positively shift our RMG sector from labor-intensive manufacturing to innovation, high-value and modern manufacturing processes. We envision the sector to be more diversified in terms of products, material (fiber) and markets. The path is to graduate from original equipment manufacturer (OEM) to original design manufacturer (ODM) as we focus more on design development, innovation and end-to-end digital manufacturing.
Product diversification is an area of opportunity for the industry to work on as our RMG export still remains concentrated in five core products which are mostly cotton-based, whereas we have the potential to diversify our product basket in high-end and branded fashion segments like – suits/blazers, lingerie, jackets, workwear, etc.
Thirty years ago the global ratio of cotton-made yarn and artificial one was about 75: 25. In the last 30 years, the demand for cotton has continuously declined while the demand for man-made fibers (MMF) has gradually increased.
When 74% of international apparel markets have been captured by MMF-based products, about 75% of our apparel industry is cotton made. Since globally the consumption of non-cotton, especially MMF apparel is increasing, there is a huge opportunity of future growth in expanding and diversifying our manufacturing into MMF-based products, as well attracting foreign investment and expertise in creating backward linkage capabilities in MMF based textile industries.
Along with that, we are opting for new business strategies to make ourselves more efficient, sustainable and innovative which will certainly add value to our customers. Building the strategic relationship in terms of technological upgradation across the industry and capacity building of our workers is our key focus area and we are keenly working on this area. Investment, particularly in the area of forwarding and backward linkage, is absolutely necessary and buyers can step forward in this case.
To welcome foreign investments, Bangladesh is getting ready with its mega projects like the Padma Bridge, SEZs, LNG terminals, enhanced electricity generation, etc. to welcome new investments. Moreover, we are now passing through a golden age in terms of demographic dividends. Around 63.5 million people are economically active, and every year around 2 million people are joining the labor force. Around 60% of our employed population falls under the age of 40 years as per age group (Labour Force Survey 2016-17).
With only a 6.26% share of the world apparel market, the Bangladesh RMG industry has real opportunities ahead for further growth. It is not the race with other RMG manufacturing countries of the world that we are concerned about; rather we are putting emphasis on value addition into our export basket.
What does realizing the potential of the RMG sector means to us? It means more export earnings for the country; it means more employment; it means pulling up more people out of poverty; it means empowerment of more women; most importantly it means moving forward towards high-tech industrialization and knowledge-based economy – all needed to realize the vision of a more prosperous Bangladesh by 2041.