The first statement can be supported by the anticipated "Power Rehabilitation Program," worth Tk. 100 crore, only for the repair and maintenance of old power plants. With the constant power crisis, large garment factories are switching to gas-operated generators, as operating diesel-run generators is becoming expensive.

On average, owners pay an overhead cost of Tk. 4,000 to Tk. 6,000 per day for diesel-operated generators. Although the cost of gas is low compared to the price of fuel, switching to and maintaining gas-operated generators would be a high overhead cost for medium and small sized firms that play an effective role in the total export earnings.

This has a negative impact on medium and small sized knitwear manufacturers, as their total labour supply and number of active machines substitute each other in the sense that most industries pay at a per piece rate.

Despite knitwear exports nearly reaching woven export level and our neighbours taking giant steps to capture a larger share of international apparels market, RMG industry that regularly accounted for more than 75 percent of export earnings and elevated standard of living of a social class, making appropriate investments in accordance with our neighbours' standards does not seem to be on the agenda of our government.

While Pakistan plans supplying gas to 425 towns and villages during the next two years, India reduced its customs duty on natural gas from 10 percent to 5 percent, somewhat decreasing dependence on fuel and stabilising its rising price. Sri Lanka has initiated Thulhiriya Complex -- a dedicated textile zone in addition to Horana Textile Processing Zone -- ensuring stable power and water supply, thereby reducing internal lead-time. India has also increased its spending on Technology Upgradation Fund (TUF) by 19 percent for textile sector and plans to launch Jute Technology Mission by the end of this year. Unsurprisingly, our government seems ignorant of the setting up of proposed garment villages by various important bodies.

Withdrawal of duties on yarn, spare parts and raw materials provide a responsive avenue for "tailors" at the possibility of "cultivators" encountering an external shock relating to the price of yarn and other raw materials in the international apparels market. Extension of tax exemption and rebate for two years till June 2008 bestowed the textile industries with a larger degree of advantage in a comparatively protected domestic market, supported by complexities in importing raw materials at entry ports.

Interestingly, as the prices of exported finished apparel items are descreasing, the volume exported and the prices of raw materials that are imported have been, simultaneously, increasing.

Therefore, if the textile industries produce inferior yarn compared to our neighbours, its adverse effect will be felt right across the apparel value chain and Bangladesh will successfully maintain status quo in the lowest category of finished products chain. If Bangladesh retains its position in such category of low value-end items, the RMG sector would be in a stalemate situation with its competitors, whereby no market or product diversification would be necessary to facilitate further development.

No solution has been found to the existing power supply crisis in areas such as Narayanganj, a hub of medium and small sized knitwear firms. Switching to solar power, as an effect of Energy Development Fund, would only be sweeping dirt already under the carpet. For the last two years, several garment owners (mainly medium and small sized firms) failed to meet shipment deadlines due to inconsistent power supply.

Consequently, some of them forced workers to work irregularly, in order to maintain an economic break-even situation, and a satisfying image. With the prices of finished apparel items decreasing and volume exported increasing, together with a price-hike of essential commodities, in conjunction with an unreliable power supply, the on-going dilemma between owners and workers can be viewed as a cumulative causation of the consequences of government inaction.

The budget has allocated Tk 20 crore for skill development programs for RMG workers; however, lack of appropriate monitoring administrative bodies has made it difficult for economists to assess its effectiveness in apparel industry. Whereas India has increased provision for handloom sector by almost 20 per cent, Sri Lanka has adopted measures for the development of its fisheries sectors; conversely, we have overlooked potential sectors that could have a thriving role in global market, for example, handloom sector.

Chittagong and Benapole ports, which in economics logic substitute for each other as access for importing raw materials and other accessories, have become complementary as consequence of facing higher lead time. Furthermore, the political dilemma regarding form of ownership of the New Mooring Terminal coupled with the clash between feeder-vessel operators and BGMEA members are a few examples that demonstrate barriers to an effective economic port for exporters, particularly for medium and small sized RMG firms.

On the other hand, given Bangladesh's minimal role in negotiating successful deals at international conferences, regarding progress and diversification of RMG sector, it is safe to state that Bangladeshi exporters could be in a deadlock situation after 2008. The Tariff Relief Assistance for Developing Economies (TRADE) bill, initiated two years ago for free access of Bangladeshi goods to the US, along with so-called lobbyists to serve domestic exporters' interest is relevant to our insignificant role in international trade deals.

Safeguards imposed by the United States and the EU against China till 2008 will allow exporters to exploit international apparels market in a determined category of low value-end products in terms of both large volume and low price. Interestingly, during early 2005, China shipped an amount to the US that Bangladesh could not produce in last three years combined, the direct consequence of uninterrupted power supply to Chinese exporting sector.

Many doomsday predictions had been made in regards to the apparel sector. However its auspicious, and persistent, growth set all cynical theories at bay, to the credit of the knitwear division. This is being done at the cost of low priced items and large volume of exports, by virtue of which, medium and small sized firms are withheld from meeting worldwide compliance standards, whereby they may disappear in the long run. One could argue that amount fixed for renovation of power and energy sector is crucial in realising its potential level for appropriate utilisation; however, such measures are direct cause of white-collar crime and also inadequate in meeting increasing demand for power generation.

Given the close-door policy nature for power and energy sectors, alongside facilities provided to other sectors, one can only predict a continuous volume increase in knitwear exports, with prices decreasing whereby it becomes a game for "survival of the largest." Knitwear exporters have exported their products even to China, and its position of low-value end products in the apparel value chain will trigger future challenges and remain questionable regarding its inferior apprehension. Woven exports urgently need resourceful and continuous backward linkage support externally from our cotton producing neighbours, if medium and small sized firms, who cannot afford to be composite on their own, are to take part in the long-run.

Hasanuzzaman is continuing his Masters at the London School of Economics and Political Science.