The readymade garment (RMG) industry in Bangladesh is one of the largest in the world, and it is the largest export earning sector of the country. The industry employs over 4 million people, and it contributes significantly to the GDP. The RMG industry in Bangladesh is known for its low cost of production, and it is able to compete with other countries in the global market. The industry is also known for its quality, and it is able to meet the demands of the global market.

History:

The RMG industry in Bangladesh started in the early 1970s. At the time, the country was still recovering from the Bangladesh Liberation War, and the economy was in a shambles. The government of Bangladesh saw the RMG industry as a way to create jobs and boost the economy.

Late 1970s:

• The RMG industry in Bangladesh began to take shape in the late 1970s, driven by the availability of cheap labor and the country's aspiration to boost export earnings.
• Initially, a few small-scale factories started producing basic garments, such as shirts, trousers, and T-shirts, to meet the demand from Western markets.

1980s:

• In the 1980s, the RMG industry experienced significant growth as more factories were established and production capacities expanded.
• The government of Bangladesh played a crucial role in supporting the industry by offering various incentives and trade policies that attracted foreign investments.
• The sector started to attract attention from international buyers due to its competitive pricing and potential for large-scale production.

1990s:

• During the 1990s, the RMG industry in Bangladesh continued to flourish, becoming one of the major contributors to the country's export earnings.
• The industry focused on diversifying its product range and exploring new markets. It expanded beyond basic garments to include more complex items like knitwear, sweaters, and denim products.
• Bangladesh benefited from the Multi-Fiber Arrangement (MFA), which imposed quotas on textile and garment exports from developing countries to developed countries. The MFA provided Bangladesh with preferential access to Western markets and further fueled the industry's growth.

Early 2000s:

The early 2000s marked a turning point for the RMG industry in Bangladesh. The MFA was gradually phased out, leading to the removal of quotas on garment exports.

The industry faced increased competition as countries like China, Vietnam, and India became major players in the global garment market.

However, Bangladesh managed to maintain its competitiveness through its low-cost labor advantage, efficient supply chains, and the establishment of industrial clusters specializing in garment manufacturing.

Recent Years:

• In recent years, the RMG industry in Bangladesh has faced various challenges and undergone significant transformations.
• Tragic incidents, such as factory fires and building collapses, drew international attention to safety and working conditions in the industry. These incidents prompted efforts to improve workplace safety standards and enforce compliance measures.
• The industry has focused on enhancing sustainability practices, adopting eco-friendly technologies, and promoting ethical sourcing and production.
• Bangladesh has diversified its export markets beyond traditional destinations, such as the United States and Europe, by exploring emerging markets in Asia, Africa, and the Middle East.

Growth:

The ready-made garment (RMG) industry in Bangladesh has experienced impressive growth over the years, establishing itself as a global leader in apparel manufacturing. Here are some key aspects of its growth:

1) Exponential Export Growth: The RMG industry in Bangladesh has witnessed substantial growth in export volumes and earnings:

• Rapid expansion: The industry's export growth has been exceptional, with annual export earnings increasing significantly over time.
• Increased market share: Bangladesh has captured a significant share of the global apparel market, becoming the world's second-largest exporter of ready-made garments after China.
• Diversification of export destinations: While traditional markets such as the United States and Europe remain significant, Bangladesh has also successfully diversified its export destinations, tapping into emerging markets in Asia, Africa, and the Middle East.

2) Employment Generation: The RMG sector has been a crucial source of employment in Bangladesh:

• Massive job creation: The industry has created millions of jobs, primarily for women, contributing to poverty reduction and women's empowerment.
• Rural-urban migration: The availability of employment opportunities in garment factories has led to significant rural-urban migration, driving economic growth in urban areas.

3) Investment and Infrastructure Development: The growth of the RMG industry has attracted both domestic and foreign investments, leading to infrastructure development and technological advancements:

• Foreign Direct Investment (FDI): Bangladesh has attracted FDI in the RMG sector, allowing for the establishment of modern factories and the adoption of advanced production technologies.
• Industrial clusters: The concentration of garment factories in industrial clusters, such as Dhaka, Gazipur, and Chittagong, has facilitated economies of scale and increased production efficiency.

4) Government Support and Policy Reforms: The Bangladeshi government has actively supported the growth of the RMG industry through various initiatives:

• Policy reforms: The government has implemented policies to attract investments, simplify trade procedures, and improve business conditions in the sector.
• Infrastructure development: Infrastructure projects, including the establishment of specialized economic zones and industrial parks, have been undertaken to support the RMG industry's growth.

5) Skill Development and Technological Advancements: Efforts have been made to enhance the skills of the workforce and promote technological advancements in the industry:

• Training programs: Skill development programs and vocational training initiatives have been introduced to improve the capabilities of workers and managers.
• Technological upgrades: The industry has gradually adopted advanced machinery and technologies to enhance productivity and meet international quality standards.

Contribution:

The RMG industry in Bangladesh has made a significant contribution to the economy. In 2021, the industry contributed $28.1 billion to the GDP, which is about 8.5% of the total GDP. The industry also employs over 4 million people, which is about 14% of the total workforce.

The ready-made garment (RMG) industry in Bangladesh has made a significant contribution to the country's economy, export earnings, employment generation, and social development. Here are some key contributions of the industry:

Economic Contribution:

• Major Export Sector: The RMG industry is the largest export-oriented sector in Bangladesh, accounting for a significant portion of the country's total export earnings. It contributes around 84% of Bangladesh's total export revenue.
• Foreign Exchange Earnings: RMG exports have been a vital source of foreign exchange for Bangladesh, helping to strengthen its balance of payments and stabilize the economy.
• GDP Growth: The industry's robust growth has contributed to the overall economic growth of the country, making it a key driver of Bangladesh's GDP.

Employment Generation:

• Job Opportunities: The RMG industry is a significant source of employment, particularly for women. It has created millions of direct and indirect jobs, providing livelihoods to a substantial portion of the population.
• Women's Empowerment: The industry has played a pivotal role in empowering women by offering them employment opportunities, economic independence, and improved social status. Women constitute a majority of the RMG workforce, enabling them to contribute to their families' well-being and societal development.

Poverty Reduction and Social Development:

• Rural-Urban Migration: The availability of employment in the RMG sector has driven significant rural-urban migration, reducing poverty levels in rural areas and promoting economic development in urban centers.
• Social Mobility: The industry has enabled upward social mobility by creating opportunities for individuals from lower socio-economic backgrounds to access better jobs, education, and healthcare.

Skill Development and Human Capital:

• Skill Enhancement: The RMG industry has contributed to the development of a skilled workforce in Bangladesh. Workers have gained valuable technical and managerial skills, enhancing their employability and promoting industrial growth.
• Technology Transfer: The industry's engagement with foreign investors and global buyers has facilitated the transfer of technology, knowledge, and best practices, fostering technological advancements in the country.

Women's Empowerment and Gender Equality:

• Gender Equality in the Workplace: The RMG industry has been instrumental in promoting gender equality by providing equal job opportunities and wages for women. It has challenged traditional gender roles and empowered women to become financially independent.
• Social Impact: Increased employment of women in the RMG sector has led to positive social changes, including improved access to education and healthcare for women and their families.

Challenges:

The RMG industry in Bangladesh is facing some challenges. One of the biggest challenges is the rising cost of raw materials. The price of cotton, for example, has increased significantly in recent years. This has put pressure on the margins of garment manufacturers.

Another challenge is the increasing competition from other countries. Countries like Vietnam and Cambodia are now major exporters of RMG, and they are able to offer lower prices than Bangladesh.

Despite the challenges, the RMG industry in Bangladesh is expected to continue to grow in the future. The industry has a number of advantages, including the low cost of labor, the availability of skilled workers, and the government's support. The industry is also expected to benefit from the increasing demand for RMG from developed countries.