RMG Market
Bangladesh may lose out to other S Asian competitors
Fear exporters
Rafiq Hasan
Bangladesh's apparel exports tend to fall due to volatile politics followed by labour unrest for several months.The exporters fear about losing out its position as a RMG exporting country to other competitors in the South Asia region. They said Bangladesh secured the second highest position in the region last year in RMG exports fetching $ 8 billion after giant India, which earned around $12 billion. "The declining trend of RMG exports as observed during the October -December quarter this fiscal would be felt further in the next January-March quarter," said BGMEA president S M Fazlul Hoque. He, however, said the total figure of the garments export during the last quarter is yet to be compiled. The sector has been growing at a rate of 30 per cent for the last couple of years. The decline in the growth rate already surfaced in the export figure of October as the woven export growth came down to 22.70 per cent from 31 per cent in September. The exporters said they had experienced a very low placement of orders since the last quarter. The chief of the apex trade body of the sector said," A worse situation has prompted me to ask the government and financial institutions for providing soft term loans to the RMG exporters just to continue the workers' salary and thus help survive the industry." He alleged there is an international conspiracy to shift the export orders from Bangladesh to somewhere else in the pretext of political uncertainty in the country. "It will be difficult to retain the position as a RMG exporting country unless normalcy is back in the political arena," Annisul Huq, former president of BGMEA, said. He also lamented that the rivalry between the two political alliances in the country is pushing the economy towards a total deadlock. Annisul said some buyers have already shifted orders and many others are waiting before placing orders for import of apparels from Bangladesh. "This is not a good sign that the customers are hesitating while placing orders for importing apparel from Bangladesh," he observed. While taking to The Daily Star, he also cited an example that a major buyer of Bangladeshi apparels like Van-Heusen has already shifted 30 per cent of its orders from Bangladesh. Normally, the placement of export order remains low in the February- March period but this year it was the lowest in recent times. The former BGMEA chief also pointed out that the deadlock at the Chittagong port hampered garments exports badly. For example, Annisul said, "I received supply of yarn against an order in 30 days after shipment of the consignment due to the blockade at Chittagong port". Sources in the apparel sector said India earned $12 billion from apparel exports, while Pakistan earned $3 billion, Sri Lanka $ 4 billion, Cambodia $2.2 billion, Vietnam $5 billion and Nepal nearly $1 billion last year. According to the industry insiders, although Bangladesh is well ahead of many south Asian RMG exporting countries like Sri Lanka, Pakistan, Indonesia, Vietnam and Nepal, a sharp rise is anticipated in the item's exports from those countries and it is imminent that those countries would emerge as Bangladesh's strong competitors. The exporters claimed that the country can achieve a tremendous growth in garments export if the political situation and sea port remain normal. "We are hopeful that the export earning may reach $15 billion within the next five years, if the election takes place peacefully and the country survives from any major political uncertainty," S M Fazlul Hoque told The Daily Star. When asked, he said, "If the situation does not improve, we will simply lose the game". The country's apparel sector faced series of setback last year. In the middle of the year, the garments workers went for movements demanding salary hike and a new wage commission. They resorted to massive vandalism in the garments industry setting fire on dozens of factories. The volatile situation in the sector continued for several months. Later, a long container and ship congestion at the premier port Chittagong affected the industry badly as it delayed the supply of raw materials and shipment of manufactured items. The port remained closed for several weeks due to rail- road-port blockade programme by the major political alliance that demanded reforms in the caretaker government and electoral process.
|