Ready-Made Garments (RMG) Sector Of Bangladesh

Ready-Made Garments (RMG) firmament Of BangladeshIntroductionEntirely merchandise oriented Ready-Made Garments (RMG) vault of heaven of Bangladesh has see a noteworthy enhancement since its commencement in last one-half of 1970s. Strangely enough, though this major exertion is now totally establish on buck private entrepreneurial efforts, its inauguration was rooted into an export despatch of Shirt which was done by Trading Corporation of Bangladesh (TCB), the state operated calling agency, in mid 70s. The export consignment held with somewhat East-European countries. However, the entrance of private entrepreneurs in this domain gifted it with a tremendous boost.Background meliorate domestic policy and the international Multi-Fiber Agreement (MFA) are the key procedures that ameliorated the correspond of Bangladeshi RMG export (Quddus and Rashid, 2000).In the decade of 80s, Bangladesh adopted a lay outing in national economic policy to run its thriftiness low the tutel age of World Bank and International Monetary Fund (IMF). substantiation of Export Processing Zones (EPZ) channeled foreign direct investment in this sphere of influence (Bhattacharya, et al., 2001, p.2-26). Money-spinning facilities like cash assistance, income revenue enhancement rebate, freight and power rate rebate, tax holiday, loans at let down rate, provision of back to back Letter of credit rating (LC), guarantee scheme for export credit, decreasing interest rate in export credit, reducing harbor charges, bond facilities for warehouse, duty free imports of crude materials and productive machineries, were offered to export oriented RMG industries (Mayumi, 2004)The MFA was an agreement of World Trade institution (WTO), done in 1974 which set quotas for export of textile and garments related products from the evolution countries (Rahman, 2004). Under this agreement, USA and Canada, the then largest RMG importers, imposed quota restrictions and maintained a limit in impor ting products from countries such as Hong Kong, Singapore, Thailand, South Korea, Sri-Lanka, India, Taiwan, Malaysia and Indonesia. Moreover, some countries had similarly major internal problems, like, sudden increase in labor make up in Sri-Lanka (Siddiqui, 2003). As a result, for minimizing the cost, the importers started looking for alternative sources and Bangladesh became a compensable source for them for facilities like low labor cost and large export quotas (Wigg, 1990, p.154-159). Bangladesh received preferential treatment by USA and European Union, as a less developed nation. Paradoxically, within 1985, Bangladesh appeared as a demon in international apparel sector and became a major contest for the suppliers in USA, Canadian and European market. Thus, the bed rock of this major industry of Bangladesh was set down and slowly gradually this industry has become the midpoint of the national economy. Later, RMG sector also received other facilities like generalised Syst em of Preferences (GSP) from USA and UK.Major problems of RMG industry of BangladeshIn spite of exis ecstasyce the main source of the money stream in internal economy of Bangladesh, the Ready-Made Garments sector is in continuous threat by some major and crucial factors. As a result, the whole sector is in risk and in a volatile situation which may ingloriously collapse the whole sector as well as the countrys economy. These problems or threats can be categorized in pursuit sectionsCritical political conditionIn-apt workersLack of straightlaced in-work precautionary surety measuresWorkers Dissatisfactioni. Critical political conditionInternal political instability and auspices threats due to such instable condition has become a serious refer for the RMG industry. If we focus on recent situation, only during the political hullabaloo in October and November, 2013, this industry had to count a loss of minimum TK. 2000 corer and orders worth $2.40 zillion were cancelled by the buyer only in first ten days of December, 2013. Moreover, due to the rail-road blockade, the exporters had to do air shipment which also compelled them to substantiate an extra expense of $0.9 million. For grasped shipment the exporters experienced a price cut by $4.65 million as orders valuing $6.6 million were supplied in delay (Bangladesh Sangbad Sangstha, December 12, 2013).ii. In-apt workerBangladesh is now a major competitor in international RMG market. This makes it compulsory to maintain the quality of the product. Quality control in production unit largely depends on while to time fosterage and workshop programs organized for the workers. But, ironically, such initiatives are absent in Bangladesh. As a result, the qualities of the products are degrading which sometimes result in cancellation of the consignment and creates a negative image in the international market.iii. Lack of proper in-work precautionary security measuresThe nigh serious issue regarding the RMG sec tor of Bangladesh is most of the factories lack proper safety measures once against any unwanted perils. This is making the works zone immensely risky which also violates the rules and regulations of International Labor governing body (ILO). Such irresponsible attitude of the factory owners is the key reason tramp many accidents in recent years which have taken colossal tolls of life. In past 11years, approximately 730 workers were blazed and killed and about 4700 workers were injured in some(prenominal) fire accidents in garments factories. The amount of deaths and casualties in building collapse is numerous. hardly in the building collapse on April 24, 2013 of Rana Plaza in Savar, 1,130 nation were reported to be dead and approximately 2,515 injured people were reported to be rescued from the building (New Age, April, 2013). Continuous accidents like Spectrum jump shot Industries, Phoenix Garments, Smart Export Garments, Tazreen Fashion, Garib Garib, Matrix Sweater, Ha-Me em Group and many to a greater extent has made the foreign buyers too much concerned about the issue.iv. Workers DissatisfactionThe RMG sector has faced several incidents of strikes by the workers for the issue of inadequate payment. The workers belong to the lower income group of the society. Although, this sector is the backbone of the countrys economy, the radar of the sector, the workers, are not even paid the minimum to keep their heart and intelligence together. The sector became volatile due to labor unrest for the first time in 2006 and since then it has become a regular phenomenon. In 2006 the unrest condition was mitigated by discussion with the labor representatives and the minimum pay rate was decided to be Tk. 1662.50. But the agitation aroused again in 2010 and the rate was revised to Tk. 3000 per month which came into effect in November 2010 (The periodic Star Forum, elevated 2012). But, if we consider the current inflation and living cost, the reasonable minimum plight should be higher. According to Center for Policy intercourse (CPD), the minimum wage of a worker is shown belowIssuesTk.Daily nutriment be (average of male and female)108Monthly Food Costs3240Monthly Non-Food Costs (52% of total cost as per the FGD)3510Food + Non Food Costs6750 involve Monthly Minimum Wage=(Food costs + Non-food costs)6750*Moazzem, K.G. and Raz, S., 2013, Revision of the minimum wage in RMG sector, pp.28.ConclusionIn current perspective, RMG sector is the lifeblood of the economy of Bangladesh. two GDP and GNP depend on this sector. As a result, for the approach of the national economy its must to strive to alleviate the problems of this sector. Moreover, the sector currently employs about 4.2 million workers whose fate directly depends on the founding of RMG sector.ReferencesMoazzem, K.G. and Raz, S., 2013. Revision of the minimum wage in RMG sector, pp.28Mridha, R.U., 2012, Causes of RMG unrest. The Daily Star Forum, internet August on tap(predicate ) at http//archive.thedailystar.net/forum/2012/August/rmg.htmAccessed 4 March 2014Alamgir, M. and Haque, M., 2013. RMG workers killed in fires, factory collapses in 11 years. The Daily New Age, internet 25 AprilAvailable at http//www.newagebd.com/detail.php?date=2013-04-25nid=47200Accessed 4 March 2014