Better compliance to boost RMG exports by 10pc: Study

Dhaka,  Wed,  28 June 2017
Published : 10 Jan 2017, 00:31:25 | Updated : 10 Jan 2017, 12:06:40
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Better compliance to boost RMG exports by 10pc: Study

Garment 'Palli' to help fetch addl Tk 312b
FE Report


Better factory compliance across the garment sector can boost the country's readymade garment (RMG) export by around 10 per cent while return on investment made in ensuring such compliance can be 14 times higher, experts said at a seminar in Dhaka on Monday.

At the same time, establishment of a special zone for readymade garments like 'RMG Palli' can raise exports by around Tk. 312 billion while generating eight times higher return on investment, they said.

The estimates were made known at a seminar on 'Smart Interventions for 7th Plan Priorities' held at the BRAC Center Inn in the capital.

The findings were part of a research on 'Benefits and Costs of Building an Industrial Zone for RMG and Ensuring Compliance of all Factories in Bangladesh' conducted by Copenhagen Consensus Center and BRAC.

The researchers found that greater compliance reduces the probability of accidents, increases productivity, lowers employee turnover, and makes the sector more attractive to both existing and new buyers, said Hasanuzzaman of Copenhagen Consensus Center.

"At the same time, creating a special zone like RMG Palli (village) can reduce production cost, make pollution mitigation easier, promote other positive spillover effects while enabling simple transfer of knowledge and technologies", he added.

The research found that the proposed RMG Palli can host 250 factories with the total cost estimated to be Tk. 1.3 billion.

However, due to increased productivity and better capacity utilisation, total export earnings from these 250 factories can be around Tk. 312 billion.

A similar research carried out on Union Digital Centers (UDCs) found that adding a migration desk in the UDCs to facilitate international migration could generate 22 times return on investment.

Experts observed that adding Migration Desks at UDCs cost Tk. 785 million upfront in addition to Tk. 203 million per year in operating costs.

However, the cost of migration per person falls by around 83 per cent to Tk. 36,500, they said.

The research found that services accessed through UDCs greatly reduce time, cost and number of visits to government offices and investing in expanding services through UDCs would generate eight times return on investment.

Highlighting the need for institutional reforms to attain Sustainable Development Goals (SDGs), experts at the seminar also underlined the need of digitisation in government processes to bring such institutional reforms in the country.

Member of the Planning Commission Professor Dr. Shamsul Alam, who attended the event as the guest of honour, said digitisation is a must for better service delivery in the country. However, he also cautioned that the cyber security issues must be taken care of while moving for such digitisation.

He also called for more competitive recruitment and better transparency to enhance institutional reforms in the country.

Additional Secretary of the Ministry of Finance Muslim Chowdhury, Commissioner of Anti Corruption Commission Dr. Nasiruddin Ahmed and Policy Adviser of the Access to Information Project Anir Chowdhury also spoke on the occasion.

Executive Director of BRAC Institute of Governance and Development Dr. Sultan Hafeez Rahman chaired the event.  

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