Is garment export paradox just a passing phase?

Dhaka,  Sun,  24 September 2017
Published : 15 Aug 2017, 20:46:00

Is garment export paradox just a passing phase?

Even though inspection has enhanced awareness about the stake involved in ensuring compliance standards, no fresh local investments could occur at a time when plenty of work orders were expected from not just China but also from the Western world, Japan and a few other emerging markets, writes Marksman
Recently, there have apparently been contrasting but mutually reinforcing reports in the media on the future of Bangladesh's garment sector. The common denominator around which crystal-ball gazing is taking place  is the potential replacement of China as the foremost supplier to the world's apparel market.  

China  has been  moving rapidly into up-end manufacturing ,high-tech industries away from labour-intensive sectors for quite a while. Such a trend has  coincided with high wage bills that even if theoretically Beijing would   stick with garments, she couldn't hope to be  competitive vis-a-vis   others. 

In this context , China is keen on passing the baton of its  predominant position  in the field  on to a deserving successor.She can do it in two ways: First transferring work orders   her factories have been receiving to other exporting countries. Secondly,on a permanent footing ,China could think of relocating some of her apparel industries ,if necessary under buy-back arrangements. Since the  balance of trade is heavily tilted towards Beijing,such an  option merits consideration by way of  bridging some of the prevailing inter-state  trade gap. 

Alternatively, Chinese investments in the Special Economic Zones that are said to be in the offing would be welcome. It is, however interesting, though not inexplicable to note  that investors from a number of countries  have been 'lobbying the governments over the years to get permission  to invest in garment factories outside of the export processing zones.'But as a matter of policy,FDIs have been confined to those zones.

Bangladesh  being the second largest exporter of garments ,knitwears etc in the world market,should be a natural contender for taking the Chinese place there. But Bangladesh RMG sector leaders know it full well that no one will offer that position on the platter; they have to deserve and earn it. Even China,for that matter, would place business ahead of any subjective considerations.

As if to prove this point, it is reported that Bangladesh is failing to take advantage of the shifting work orders from China. Ahsan H Mansur,executive director of the Policy Research Institute(PRI) was quoted as saying ,"Bangladesh  was supposed to get more of the shifted orders from China but unfortunately those were received by some other countries like Vietnam,Myanmar and Cambodia."

On top of that Chinese entrepreneurs  are said to have invested in Myanmar,Vietnam and Cambodia. If one  probes the matter, one finds that although China is willing to invest in Bangladesh she faces  hindrance in terms  of prompt availability of  land ,gas and power.

There is an issue with capacity as well. According to the Bangladesh Garment Manufacturers and Exporters Association( BGMEA), more than 1000 small factories had to shutter down 'due to strict inspection and remediation by the Accord and Alliance ,two foreign building oversight bodies.' Even though inspection has enhanced awareness about the stake involved in ensuring compliance standards, no fresh local investments could occur at a time when plenty of work orders were  expected from not just China but also from the Western world, Japan and a few other emerging markets.

In contrast,we have a report with an effusive   story-line saying, 'Bangladesh is buttressing  world's confidence in challenging  Chinese monopoly in readymade garments'. In an article by analyst Robin Harding titled "Manufacturing Focus to New Corners  of  Asia' published in prominent newspapers including The Financial Times  one comes by an observation reading-'in the last 20 years, Bangladesh has staged an economic miracle.'Adding it pointed out,'low labour cost is the moving force'  behind the garments wagon wheels.

Much as this factor is a strong point for us , it also enhances our obligations to  ensure   their safety and welfare for the sake of greater productivity and quality assurance.             

"Safari Hi"
Editor : A.H.M Moazzem Hossain
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