Space For Rent

Space For Rent
Tuesday, March 31, 2015, Chaitra 17, 1421 BS, Jamadius Sani 9, 1436 Hijr


Emergence of RMG and economic emancipation
Published : Tuesday, 31 March, 2015,  Time : 12:00 AM,  View Count : 42
Omar Gias
One of the aspirations of the War of Liberation in 1971 was to achieve economic emancipation which will lead to a happy and prosperous Bangladesh. It is true that after the nine-month Liberation War we achieved independent Bangladesh but at the same time inherited a shattered economy. The country had one of the lowest levels of urbanization and industrialization in the world. Its economy was heavily dependent on agriculture. Newly independent Bangladesh had a very few export-oriented industries as major industries were developed in the then West Pakistan due to attitude and policies of the government of the then West Pakistan. Its average GDP growth rate was only 2.4 per cent while the export earnings were US$ 327 million. Even cynics regarded the country as 'basket case' that was likely to remain dependent on foreign aid.
The war had destroyed the country, not our morale. We started our new struggle for rebuilding the war-ravaged country from the rubble and achieving economic emancipation. But the task appeared herculean with limited resources. That time jute industry was the major foreign exchange earner that contributed to the mountainous task of rebuilding the war-torn country. But the 'Golden Fibre' lost its golden days. To accelerate the GDP growth and to create employment for a huge populace with low rate of literacy (on liberation of Bangladesh, literacy rate was only 18 per cent) were the biggest challenges for Bangladesh. Some entrepreneurs with patriotic zeal wanted to do something big to transform the economy of Bangladesh. They thought readymade garment industry (RMG) as the best solution to the problem and as the catalyst for revolutionary socio-economic change in Bangladesh. Nurool Quader, a former civil servant, was the pioneer of our readymade garment industry. He had a vision of how to transform the country. In 1978, he sent 130 trainees to South Korea where they learned how to produce readymade garments. With those trainees he set up the first factory namely Desh Garment to produce garments only for export. Following his footstep other prudent and hardworking entrepreneurs started RMG business in the country. Since then Bangladesh garment industry needs not to look behind.
The readymade garment (RMG) sector which emerged as a small non-traditional sector of export gradually has become crucial to our economy as the main source of export earnings and employment generation. Now, the apparel industry is Bangladesh's biggest export earner with value of over US$ 24.49 billion of exports in 2013-14, which is 81 per cent of the total export earnings of our country. Braving all limitations and obstacles the RMG sector has become the second largest exporter of garment products in the world within three decades. The contribution of industry to the GDP of the country is around 10 per cent. Besides, banks and insurance companies earn around Tk 40 billion, shipping Tk 25.5 billion, transportation Tk 10 billion and ports earn Tk 12 billion from the RMG industry per year.
The industry is crucial not only in terms of export earnings but also for employment generation. The sector has created employment for around 4.4 million people and lifted them from the abyss of poverty. The sector has been playing an outstanding contribution to poverty alleviation as the sector has employed a large number of people, mostly poor, giving the opportunity to free themselves from the curse of chronic poverty. For example, in the 2008-2009 fiscal the total RMG export earnings were US$ 12.35 billion while the poverty rate was 40 per cent. After five years in 2013-14 FY the size of the RMG industry has almost doubled with total RMG export earnings of US$ 24.49 billion and the poverty rate has decreased to 26 per cent.
Another significant contribution of RMG industry to socio-economic change in the country is women's empowerment. It is the RMG sector that alone has created employment for 3.6 million women, which is undoubtedly significant in their lives. Since most of these women have mainly come from rural areas and have little or no education at all, their employment in any formal sector would have been impossible had there not been the readymade garment industry in Bangladesh. Now, our women RMG workers, who once were treated as a burden on their families and had no say in their family matters, have become asset to their families with their earnings. This financial capacity has made them self-reliant and given a dignified life. Their lives have changed -- they can go to markets and buy according to their necessities and wishes with their own money; they can help their parents and siblings by sending money to them; they can save money to secure their future.
Bangladesh is most likely to graduate to the list of Low Middle Income Country (LMIC) this July or next because her per capita annual Gross National Income (GNI) is of about US $1100 in FY 14 which is well above the current LMIC threshold of US $1045 per capita per annum. However, to graduate ourselves to an Upper Middle Income Country the per capita GNI need to touch US $4125 per annum. Here the RMG industry can play a crucial role.
Bangladesh has set the vision of achieving US$ 50 billion of RMG export by 2021 when the country will celebrate her 50th anniversary of independence. So, the conspirators who still cannot accept the independence of Bangladesh may use their vicious weapon anytime to injure this lifeline industry of our economy. In the recent past we also observed the sector destabilized very frequently. So, while a semblance of order need to be established within the industry, all the patriotic citizens of the country need to be vigilant to save this industry from any unwanted disturbance.
Omar Gias is a freelance contributor. E-mail: [email protected]

















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