"On an average, productivity at a foreign-invested garment company is 20 percent higher than that of a factory with domestic investment," said Hiau Looi Kee of development research group of the WB while presenting a keynote paper on foreign investment and firm productivity.

She presented the figure on the basis of a recent survey on 232 garment factories in the country.

The foreign-invested firms also attract more international buyers and train workers who later join domestic firms, she noted.

She said factories in the export processing zones (EPZs) are more capital-intensive compared to the non-EPZ ones.

Supporting more FDI in the garment sector WB Country Director Christine I Wallich said it would create competition. "Industries, which get protection become inefficient."

Besides, a central bonded warehouse (CBW) should be allowed and a textile sector up-gradation fund can be formed for the betterment of the sector.

The central bonded warehouse can make the garment items more competitive in the international markets, she added.

She also suggested lowering duty and tariff to boost the country's garment export.

Speaking as the chief guest Executive Chairman of Board of Investment and Advisor to the energy and mineral resource ministry Mahmudur Rahman told the seminar that there is no restriction on FDI in garment sector now.

However, restrictions on FDI in garments outside EPZs were imposed for various reasons.

In spite of withdrawal of quota facilities, garment sector in Bangladesh registered a significant growth, he pointed out.

"We are surviving due to our inherent strength," he said adding none of the least developed countries (LDCs) in Asia gets any duty concession to the US markets, which also contributed to a great extent.

Moreover, the country's knitwear sector witnessed a surge in recent times as the export earning from the sector rose to $2.9 billion from only $5 million in late 80s.

Tariff reduction, Rahman went on, will not be effective for the garment sector because it is being operated on back to back LCs (letters of credit).

British High Commissioner to Dhaka Anwar Choudhury suggested appointment of experts in private firms.

There should not be any negative notion that the foreign companies are always bad, he added.

More FDI can be encouraged in the RMG sector for capacity building of domestic firms, but the foreign investors must transfer effectively all kinds of technologies namely production, designing and marketing, said Prof Hafiz G A Siddiqui, vice chancellor of North South University.

"Otherwise, encouraged FDI will only benefit the foreign multinational companies and make the local firms permanently dependent on the foreign-invested firms," he added.

Prof M Musa, pro-vice chancellor of East West University, and Zaidi Sattar of the WB also spoke at the seminar.