Thousands of workers in Bangladesh protested violently demanding an increase in wages.

Workers stitching clothes for many Western brands showed their protest, making hundreds of garment factories to shut down temporarily hindering in the delivery of garments to big retailers such as H&M, Wal-Mart, and Tesco. Minimum wage in Bangladesh is the one of the lowest; globally ranging from Tk 1,662 for a month. The entry level salary for apparel workers in Bangladesh was generally set for Tk 1,200, and was later raised by the Government to Tk 2,500, which was to take effect from November, 2010. But, this did not satisfy the workers who were negotiating for Tk 5,000 as a minimum salary. Furthermore, they also demand holiday time, official union recognition, and sick pay. There is an increasing trend in the labor, and material costs in China. Apparel workers are getting attracted towards better salaried jobs such as making electronic spare parts, and automakers. Due to this, Chinese apparel makers are currently facing a shortage of workers. Bangladesh has good potential to leap at the opportunity, and capitalize on the rising costs of China, but the prevailing labor unrest would impede the foreign companies from considering this option. The current situation of labor unrest even pose a threat to the benefits brought by the economic recovery, which was providing a 15% increase in the apparel exports during April, and May. During 2009, apparel exports from Bangladesh accounted to 80% of the total exports, proving to be a key sector. Apparel exports have also augmented the economic future of the country. The spell of workers strike has incurred a loss of Tk 7.75 billion for the apparel manufacturers. The losses include; loss of production time, higher costs for sending the products through air freight instead of sea cargo, and the damages caused due to sabotage of the factory premises, and machineries. Apart from this, the readymade garment industries will have a hard time in keeping up with their international orders. Increasing the wages to Tk 5000 will be too heavy for the apparel industry to bear, as it has been crushed by the global turmoil recently, and is only recovering gradually. Domestic manufacturers are not ready to negotiate with unions, or workers, blaming on cost cutting, and Western buyers such as H&M, Carrefour, Tesco, Wal-Mart, and Levi Strauss. On the contrary, unions argue that manufacturers make the workers to work for 10 hours in a day, and six days in a week, thereby accumulating enormous profits. Workers and the union strongly assert that, while thousands of businessmen have become millionaires due to the endowment of Bangladesh apparel industry, lakhs of apparel workers have been condemned to perpetual poverty.Labor unrest is the most crucial issue facing

the apparel sector of Bangladesh. The Government, apparel manufacturers, and the workers should reach a compromise regarding fair wages.

References: 1. http://www.thejakartaglobe.com 2. http://libcom.org MITTWOCH, 21. JULI 2010 Recent unrest in garment sector in Bangladesh MediaWatch-Blog freut sich seinen LeserInnen einen Gastbeitrag aus Bangladesch prsentieren zu knnen, in dem die Hintergrnde der jngsten Streikwelle in der Textilindustrie des sdasiatischen Landes erlutert werden. Der Blog will damit eine der vielen und alltglichen Lcken der bundesrepublikanischen (und westlichen) Berichterstattung stopfen helfen: In diesem Fall geht es um die Zurckhaltung der Medien bei ausfhrlichen und mit den ntigen Hintergrnden versehenen Berichten ber Arbeitskmpfe (nicht nur im Ausland). Lesen Sie also einen Beitrag von Khorshed Alam Alternative Movement for Resources and Freedom Society (AMRF) The garments sector witnessed recurring violence in Bangladesh. In recent times (June-July 2010), strings of incidence had taken place. Some incidents have paralyzed the whole Dhaka city. The workers took street, ran amok. Police violently swooped on them, water canon, rubber bullets and baton charges could not stop the workers from staging spontaneous demonstration. Generally in Bangladesh, the major reasons of sudden outburst, against the backdrop of accumulated anger and immeasurable plight of the workers, are directly linked to low wage, unpaid wages and overtime.

Low wage, irregular pay and sudden closure of the factory without any prior notification compel the workers to take the street. When Wage Board is haggling over the fixation of minimum wage and the owners volubly and vehemently opposes it. Bangladesh has now around 4,500 garment factories which employ over 3 million workers. The minimum monthly wage of a garment worker is now 1,662 taka (about $24) a month. The garment industry accounts for about 40% of Bangladesh's total industrial workforce. A survey released last month by the Bangladesh Factory Inspection Department which showed that almost 15 % of employers did not pay their workers on time between January and May. Many other factory owners did not pay overtime, while several continued to pay less than the government's minimum wage. The government marks time The government is worried about global media, and how they are reporting. Government expresses concerns over irking of western companies; they are hardly worried about the causes of the workers. After the incidences, the government reacted sharply and assured the companies not to be worried.

Khandker Mosharraf Hossain, the Labor and Employment Minister appeared in media and informed that negotiation for raising wages is making good progress and we expect a settlement before the end of this month [July 2010]. Hossain argued that any negotiation, particularly on sensitive issues, takes time. Reviewing the wages of several million workers will take time...It cant be done hurriedly, and a minimum wage cant be foisted on the workers and the industry injudiciously. The Bangladesh Parliamentary Standing Committee on Labor and Employment urged the government to declare a time befitting minimum wage structure by July 29. The committee also emphatically underscored that the government should take urgent measures to resolve all the other problems in the garments sector. EU asks if there is exploitation The European Union expressed concern over growing labor unrest in the readymade garment sector over wages. A three-member team led by the head of the EU Delegation to Bangladesh, Stefan Frowein, met Hossain to know about the alleged labor exploitation in the export-oriented apparel industry. The European Union is concerned about labor unrest in the readymade garment sector. They wanted to know

what move the government has initiated to increase the minimum wages for garment workers. The ambassadors also wanted to know whether the garment workers were being exploited. The minister told the delegates that included ambassadors of the Netherlands and France in Dhaka that isolated incidents of violence might take place in such a large industry as the growing garment sector in which around 4 million workers were employed. I told them that unrest at one or two readymade garment factories out of 3,500 is nothing unusual It is nothing serious if 400-500 workers out of four million stage demonstrations in any situation. They [EU] have understood it, the labor minister was quoted. It appears that government is trying to deny the movement as a broad spontaneous protest of workers. Wage Debate The ongoing negotiation at the Minimum Wage Board for increasing the wages of garment factory workers has gained momentum after nine sittings in five months that were made fruitless by the reluctance of owners to raise wages by a reasonable extent. It is apparent from the statements of the government officials and Ministers that the owners are seemingly softening their position in the wake of fear that the unrest may spark off any time, if the demands of workers are undermined. As we came to know from various sources including media coverage that high ups of the government is exerting pressure on the owners to come down to a realistic and acceptable level of mark up of wage. Government sources are in apprehension that fixing even Tk. 2500(US$ 35) would not be reasonable amount for the workers to appease; angry protest will be triggered once again. The flexibility that they are showing in terms of settling a threshold point of minimum wage is also as meager as it was before. The owners association is striving hard to keep the mark up of wage within Tk. 2500 per month. In the beginning stage of wage negotiation the owners representative even proposed that the revised minimum wage should be around Tk 2,000 ($29) but it was rejected outright by the workers and other stakeholders. After that meeting, further escalation of protest by workers worried the government and the factory owners, who realized

that an inadequate increase of wages might cause severe protests and jeopardize the whole industry. The owners lobby is now trying hard to ensure that the minimum wage will be no more than Tk 2,500 per month. Garment factory workers demand Tk 5000 fixed as minimum monthly wage of an entry-level garment worker, pointing out that the existing minimum wage of Tk 1,662 or $25 that was fixed in 2006, can no longer sustain a person because of the constant rise in the cost of living. The minimum wage of an entry-level Chinese worker is $166, of a Vietnamese $90, of an Indian $130 and of a Cambodian $66. The top brass of the government wish the minimum wage to be at least Tk 3,000 for an entry-level worker, and bills for overtime must be added to the take-home salary between Tk 4,000 and Tk 5000. Even if the aforesaid amount (Tk 2,500) is paid to workers, this is not going to help climbing out of abject poverty ladder. The price hike of essentials has drastically plummeted down the real wage. It is widely recognized that the workers movement for a livable wage cannot be undermined as stray incidents; neither can be termed as a conspiracy. The wage board for the garment sector, comprising representatives of workers, owners and an independent member, first sat on the 28th of January 2010. According to the law, it will have to come to a decision by the 28th of July. According to government prediction, in case of any delay in announcing revised minimum wage before the Eid Festival (September), a major workers unrest will take place. Many incidences in 2010 The recent incidences triggered over wage is a common and overarching demand of the workers. This is not the problem of one or two factories as Minister for Labour described to European Commission delegation. Statement of top brass of the government and Ministers are full with paradox- on the one hand they are always skeptical of recognizing the fact that workers can independently mobilize, spontaneously rise and press their demand home. One quarter of government is blaming the apparel scrap traders. Sometimes, some of the high ups are also alluding

to inhuman minimum salary as cause for unrest. Seventy two incidents of labour unrest had taken place from January 1 to June 30, 2010. The incidents left at least 988 workers injured in police actions while 45 workers were arrested and more than 10,000 were sued and at least 78 workers were sacked. A series of incidents had also taken place in and outskirts of Dhaka until mid- July leaving hundreds of workers injured. A total of 41 incidents occurred in connection with the demand for payment of their dues. In 13 cases, the workers took to streets to protest at the killing or torture on their colleagues. Among others, declaration of lay-off or closure, and termination and curtailment of leave or holiday were the causes of demonstrations and unrest. Of the incidents, 13 occurred in January, three in February, seven in March, twenty-two in April, eleven in May and sixteen occurred in June. The apparel sector experienced a severe labor unrest in the beginning of this year. In the first week of January, thousands of workers in Mirpur and Pallibi areas of Dhaka took to streets to protest at the killing of a worker inside a factory. Workers from most of the factories around joined them in the demonstration. Eight incidents of unrest occurred in Mirpur zone in Dhaka city during the period while 16 incidents took place in Savar-Ashulia area including the Dhaka Export Processing Zone, outskirts of Dhaka, 19 incidents in Gazipur-Kaliakoir area, 12 in NarayanganjFatullah area, three in Rampura-Banani area, six in Chittagong and four others occurred in Comilla, Narsingdi, Demra and Tejgaon areas. Factories are being closed Authorities suddenly shut down the factory without notifying workers. As the closure was unannounced and uninformed workers who came to attend work in fine morning found a notice hanging in the factory gate and factory gate was closed. Factory was closed without paying monthly wage of the workers. The notice saying that factories would remain closed until further notice. Workers who came to join the factory

gathered in the street. Police intervened and attempted to disperse the workers using excessive force. Violent attempt of police to disperse the workers enraged the workers. The workers of other factories of this sprawling garment belt, stretching a radius of 10-12 sq.km, where hundreds of factories are located, took to street. Clash spread in the whole area. The workers locked in clashes with police was intimidated and brutalized by the law enforcers. The police fired teargas shells and used water cannon to disperse the demonstrators. The factories' owners complained of "panic and anarchy" and the government sent hundreds of riot police. The cops fired rubber bullets and tear gas. The workers hit back by hurling rocks and torching cars. The workers of other factories rallied behind the demonstrators. The intervention of police was so brutal and heinous. Thousands of workers took the street and demonstration continued for days. Owners have hired their own gangs to protect their production units. Sudden stoppage of production of hundreds of garment factories by the authorities for the days and police action on apparel workers demonstrating for wage increase also added new dimension to the whole problem. However, the main slogan chanted by the workers was on fixing TK 5,000 (US$70) as minimum wage. Conclusions

Rising food and essentials prices are making the garment workers plight worse. The low wages have a disastrous effect on workers' livelihoods.The workers especially women are struggling to feed themselves and their kids, and their anger is boiling over.

Companies have broken their promises and pledges. Companies pay hardly any attention to miseries of the workers. In the absence of any stewardship of movement, a network has developed among the workers which is expanding and growing.

Government promised that workers wages would be substantially increased, but the statements and arguments on fixation of wage clearly demonstrate that the government is not going to keep its promise.

Non-existence of union and organization left no option for the workers but to take streets in protest of torture, low wage and non-implementation of labor laws.

All the Memorandum of Understanding ( MOU) in a series of tripartite negotiations, which took place over the last couple of years, were not respected by the Bangla Desh Garment Manufacturers and Exporters Association (BGMEA) and Government;

The role of the labour department of government is fuzzy and dubious. Not a single Workers Participation Committees are allowed to function properly in the factory

Labor unrest in Clothing Industry: Reasons and Solutions

Clothing industry is one of the most labor-intensive sectors in the world. The industry is most labor-intensive sector in Bangladesh due to very less use of technology. This industry is the backbone of our export economy, which in turn is supported by more than 3 million workers. Being an integral part of the industry, labors deserve to get higher consideration by the manufacturers. Unfortunately, the manufacturers cannot take their matters into priority; resulted in present unrest. Frequent labor unrest in clothing manufacturing sector; strikes by labors & their unions; has become common in Bangladesh. Most obvious reason for the unrest is wages & increments up to a level, which could help them to live a minimal life. Is it legal demand of the labors or labor unions to raise their monthly wages from Tk.1600 (US$ 25) to Tk.5000 (US$ 70)? In fact with

the high inflation in food and energy price, it is getting difficult for the workers to live with the present lowest monthly wage of Tk.1600. Most of the owners of the clothing factories can realize the reality, but they are unable to increase the wages as demanded by the labor unions. They are not making such a high profit to meet their demands. Could minimum wage announcement by Wage Board of Bangladesh solve the labor unrest in Bangladesh? I doubt because; if the Wage Board announces minimum wage more than present limit, then present clothing industry might get one big shock, which could lead the clothing industry of our country in the verge of destruction. There could be few possible outcomes, following implementation of the announcement. The first one is the premium organizations of the sector; namely BGMEA and BKMEA; can ask the government for monetary stimulus package to full fill higher wages. Other most likely consequent is permanent stoppage of the clothing factories. Apart from this, wage increment might lead to market inflation, especially in food. Therefore, we should go thorough diagnostic consideration to find out hidden problems, and possible solutions to save our billion dollar clothing industry: Bangladesh enjoys the lowest wages in clothing sector in the world, but cost of living has been increasing gradually; most likely at significantly higher rate in the world. Thus; demand of increasing monthly wages is obvious, creating labor unrest. The second factor is wages discrimination; e,g toplevel employees draw more than 100 times monthly salaries than low-level employees, plus other companys benefits in the hierarchy. This in turn develops non-motivation among the fellow workers; create jealousness among them, consequently less productivity of worker by unrest in the production environment. A successful organizations practice few common formulas to reduce discrimination of salaries or wages. By reading the mind of the most employees and workers, a factory creates hierarchical organogram where wages discrimination is not visible. As; in those cases; some top and midlevel employees are more efficient in their respective job fields, so they deserve higher salaries. Thus, the owners keep personal contact with those employees, and pay them cash incentive secretly. Other reasons for the labors non-satisfaction may be other mismanagement of the industry, resulting in frequent unrest of workers; like fire security, fraction salary payment, zero payments for over time, no festival bonus, and

lay off of factories without prior announcement. Some experts of the sector believe; internal political environment, national or international politics; like creating labor unions; industry waste or Jhoot trading issues etc, are also contributing in unrest. I like to recall about steady destruction of our labor market in mid-east countries. Compatriots of India and Pakistan using mass media has tried several times to destroy images of Bangladeshi workers, in order to keep their labor demands higher there. Visiting clothing factories personally experienced me that there are some distorted minded workers, especially boy workers (aged 17 to 25) in almost all clothing factories who miss lead other workers to strike to enjoy break and check their influences in the existing environment. Workers wage comes from the income, including expected profit, an individual factory earns. Our clothing sector is still disorganized even after more than three decades of the commencement. During this long run; this national industry loses its competitiveness in profit, despite of having no core competence. The reasons can be identified as due diligence of the government and industry owners towards our competitors; thereby international clothing buyers. As a result; the buyers who are educationally sound and master in business strategy, are using our strengths; like cash incentive from government, GSP facilities from the USA and European Union; as our weaknesses. Consequently, the buyers are gaining in price bargaining of clothing orders! Clothing factories collect orders in two general ways- one is direct contact with the international clothing buyers, and the other is through middle men or buying houses. To work directly with buyers, the factory need efficient, well converse, and effectively communicative team in the top managementlevel. But most of the clothing factories failed to build up such a good team, thus those factories ask the middle-men/buying houses to work for themwhich I describe as indirect way. The direct way of working with buyers is always better than working with the help of middle-men as the factories could save the commission of the middle-men. The commission accounts about 10% of total working value; ejection of which in turn could increase profit of the factories. Apart from this, the factories get ensured of the having regular working order from the respective buyers. Because of the mentioned weaknesses of Industry Owners; buyers are interested to place orders through their liaison offices or buying houses. Buying houses could read the buyers mind; regarding their demand of product quality, consistency and lead-time. As the middlemen are playing

leading role in export by gaining commission; the profit margin or income of the industry falls. In addition, Power and gas crisis; hampering production; are among many other reasons, indirectly manipulating profit of clothing industries. Lack of managerial skills of the top-management in clothing factories causes in failing on-time shipment and thus rejection of orders from buyers, are one among many reasons which affect profit margin of the factories. High labor fluctuation does affect the productivity. The productivity of individual labor in clothing sector is one of the lowest in the world, as no concept of labor training exists here. This results into lack of workers motivational in the respective factories. The latter matter is the best example of managerial weakness. We can sum up the main reasons for minimal profit in the clothing industry as: 1)due diligence of our humble people to the buyers, 2) presence of commission of middlemen or buying agents, 3) shortage of power and gas utilities in the industry, 4) higher labor fluctuation, untrained labors, lower productivity of individual labor; resulted from managerial weakness; 5) seasonal natural disasters, 6) volatile and unpredictable backward linkage markets. Now question is: how the industry creates higher revenues; that means expected profit; to full fill higher wages demands? I already have pointed out some above-mentioned hurdles and appropriate measures against those hurdles must ensure higher revenues. One of the accurate measures is to develop potential in the sector, through restructuring the industry. At the factory level, the top and mid-level management need not to be well conversed and communicative only, with their respected buyers. But they should also gain expertise in understanding the needs and demands of their labors. And accordingly take initiative to satisfy them. It is comparatively better to have due-diligence with their workers than the buyers. We can restructure individual factorys hierarchical structure; including labors training and create an environment; making labors feel as they are part of the management. Such an approach may result in decreasing labor strife, increase productivity of each labor, thus higher turnover. Factory owners should avoid hard-line policy and have to have patient and listen to labors as well. To cover up with power and gas supply, the clothing industrys premium bodies like BGMEA, and BKMEA, should come up with actually regular demands of power and gas in the industry as well as proposed ways to fight

the problems. As the crisis is a national problem; the BGMEA and BKMEA would have to come up with any alternative or innovative way. The sector is lagging behind in training of its stakeholders. There is no established training institute in the country to train their top-level, mid-level, and low-level managements. Training makes human resource efficient; makes business competitive, and creates core competences in complete supply chain. Industrial management knowledge is most important for top and mid-level employees while proper operations of machines by operators are crucial for operators productivity. Regular basis training in Training Institutes can ensures both better industrial management environment and higher productivity. Higher productivity means high revenues, thus profits, which in turn could ensure better wages. Thus training significantly contributes to controlling Labor Unrest! In my summery, we need a common platform for owners and labors, where both parties raise their problems, and therefore find instant better solutions. The platform should be consisted not only with owners and labors representatives, but also experts from research organizations (like CPD, BIDS) should be included for better performance of the platform. Government with the consultation of respective stakeholders of the industry should create Textile and Clothing Police; like Bangladesh Railway Police to protect railway sector of the country; to tackle unrest in the sectors, if any. The clothing sector is not much less important for the nation than the Railway one! According to me, Identification of real garment workers and picketers during unrests is very difficult, as there is no way to create identity of each and individual worker. Therefore, registering their names and issuing them ID cards have become essential. Establishment of an organization to issue ID card is getting important for our T&C sectors future prospects and faster growth. Issuing ID cards or ID numbers to garment labors, would help in many aspects like food rationing, counting number of garments workers in the sector, finding out life details in case of labors death, or labor criminal activities. It could be a step ahead in organizing the Textile & Clothing sectors. Personally I dont believe that only wages issue creates labor unrest, and therefore increasing demanded wages will not help to stop frequent labor unrest in the industry. I believe that labor unrest is the final explosion created by uncountable mistakes, misbehavior, mismanagement, and over exploitation of labors by authority. I like to summarize my writing in the following table:

Reasons for Labor Unrest Low wages Higher wages discrimination/gap in organizational hierarchy

Lack of compliance (no weekly day off, no festival bonus, compulsory over-time, but fraction payment or no payment) No responsible organizations who A neutral organization to be will listen labors needs and formed (taking members from demands BKMEA, BGMEA, labors unions, and government employee from labor ministry) who listen them. Death of any garment labors in Train labors techniques how to the factory premises, could be by save themselves; construct fire-smoke, electrified and labor production plant accordingly; keep pain for pregnant women contractual agreement with nearest doctors in the locality, in case of unable to ensure 24 hours doctor. Distorted minded boys/males In case of recruiting boys/males, labors create havoc of unrest to scrutinize them properly. press their illegal demands Local influential (could be Needs to formulate garment police mastans) trading of garment to tackle such occurrences (like wastes/jhoot, sometimes creates Railway Police to guard unwanted unrest in the clothing Bangladesh Railway) manufacturing areas. Some believe international politics In such cases, government and willing creates labor unrest, thus media could play vital role. They intentionally spread the news of should go depth in the matter, labor unrest in the industry to and thus broadcast real pictures take unprivileged advantages. (hidden cases) culty of Business Administration and Management

Proposed Solutions Control food and power abnormal inflation; readjust wages Restructure factory hierarchy organogram; provide incentive to deserving employees but keeping salary indiscriminate level Ensure social and environmental compliances in the clothingmanufacturing sector.

Gro up: 01( War rior) Lev el3, Sem este rIIFa

4 |P

Patuakhali Science and Technology University Acknowledgement At first we desire to express our deepest sense of gratitude of almighty Allah.With profound regard we gratefully acknowledge our respected course teacher M.Anisur Rahaman, Lecturer , Department of Management Studies , Faculty of Business,Administration and Management for his generous help and day to day suggestionduring preparation of the report.We like to give thanks especially to our friends and many individuals, for their enthusiastic encouragements and helps during the preparation of this report us bysharing ideas regarding this subject and for their assistance in typing and proof reading this manuscript. 5 |P a g e Table of Contents Abstract.. 01 Introduction...,,....02 Literature Review......,,....02 Limitation of the Study.,.... 04Analysis Technique & Report Writing..,.04 Description The Bangladesh Garment Industry..,......05 Contribution of the RMG Industry ...07 Exporting Condition of Garments Industry................08 Company profile.........12 Problems Regarding With RGM....14 Bangladesh Faces the Challenge of Globalization.............19Prospects of the RMG Industry... 20Supportive Government Policy......23 Recommendations ........ 24Suggestions Regarding Fire Safety .....25Conclusion .... 26References ..... 27 6 |P a g e Chapter1Chapter 2Chapter 3Chapter 4

Appendix ....... 28 Abstract The phase-out of the quota is likely to have particular significance for the export of Bangladesh apparels to the US market. MFAs impacts are not much related to a questionof our $2 billion exports

to the USA; or the $5 billion worth of exports made by Bangladesh globally. Rather, it is a question of how Bangladeshs entire economy will beaffected by the issue of quota phase out. RMG exports constitute about 75% of Bangladeshsannual export and provide direct employment to 1.5 million females and indirectly anadditional 8 to 10 million people. The global clothing trade is evolving on a continuous basisand that the phase out of quota restrictions and forming of trade blocs has become a reality.Moreover Bangladesh is convulsed by fierce class struggles, centered on the countrys garment industry. Many tens of thousands of workers have gone on strike, blocked roads, attacked factories and other buildings, demonstrated, fought the police and rioted in the streets. Every day comes news of fresh strikes in a variety of industries mainly the ready-made garment (RMG) sector, but also mill workers, river transport workers, rail workers, journalists, lecturers and teachers. The revolt began on 20 May2006 with garment workers strikes in the Bangladeshi capital Dhaka beginning in a small number of factories over issues including the arrest of worker activists and non-payment of wages. By23 May2006 this struggle had been generalized, with action at a much larger number of factories and demonstrations across the city. A massive army and police presence around garment factories, in some cases completely blockading and creating check points for entryto Export Processing Zones, temporarily calmed things; but strikes continued to take placeat numerous factories, leading to solidarity strikes from nearby workplaces and semi- spontaneous demonstrations. 7 |P a g e

Introduction The tremendous success of readymade garment exports from Bangladesh over the lasttwo decades has surpassed the most optimistic expectations. Today the apparel exportsector is a multi-billion-dollar manufacturing and export industry in the country. The overall impact of the readymade garment exports is certainly one of the most significantsocial and economic developments in contemporary Bangladesh. With over one and a h al f m i l l i on wom en workers em pl o yed i n sem i -ski l l ed and ski l l ed j obs produci n gclothing for exports, the development of the apparel export industry has had farreachingimplications for the society and economy of Bangladesh. Literature Review Several authors have analyzed aspects of the garment industry in Bangladesh. Of thevari ous aspe ct s of t he i ndust r y, t he p robl em s and t he wor ki ng condi t i ons of fem al e workers have received the greatest attention. There are several studies including theBangladesh Institute of Development Studies (BIDS) study by SalmaChowdhury and Protima Mazumdar (1991) and the Bangladesh Unnayan Parisad (1990)study on this topic. Both of these studies use accepted survey and research methodologyt o an al yz e a weal t h of dat a on t he soci al a nd econom i c ba ck gr ound, probl em s and prospects of female workers in the RMG sector. Professor Muzaffar Ahmad looks at theindustrial organization of the sector and discusses robustness and long-term viability of apparel manufacturing in Bangladesh. Wiigton (2000) provides a good overview of thisindustry, especially the developments in the early years. One of the few studies on theBangladesh apparel industry to be published in a reputed journal in the U.S. is that of Yung Whee Rhee (2003) who presents what he calls a catalyst model of development.The B an gl ade sh P l anni ng C om m i ssi on under t he Trade and Indust ri al P ol i c y (T IP ) project also commissioned several studies on the

industry. Hossain and Brar (2004)consider some labor-related issues in the garment industry. Quddus (2006) presents a p rofi l e of t he appa rel sect o r i n Ban gl ad esh and di s cusses som e ot her aspe ct s of t he industry. Quddus (2006) presents results from a survey of apparel entrepreneurs andevaluates the performance of entrepreneurs and their contribution to the success of thisindustry. Islam and Quddus (2006) present an overall analysis of the industry to evaluateits potential as a catalyst for the development of the rest of the Bangladesh economy. 8 |P a g e Data Collection For the assessment, both primary and secondary data was collected. F o r t h i s w e interviewed 5 garments company through using a structured questionnaire. Personalinterview technique was applied while fill up the questio nnaire on respondents. Thesample garments companies who are interviewed are given in a chart: Name of the Garments Company Millenium Garments Limited RAHAN GARMENTS (PVT) LTD ALAM FIBER IMPEX Ltd. FABRICS AND COMMODITIES EXCHANGE LTD.TOKIO MODEL LIMITED. Sampling plan Garments Company of Dhaka are constitutes as the study area, because of convenience of the field work and easy communication. For the crisis condition of Bangladesh it wasdifficult for us to collect data form more samples. Above it, we go for different garmentscompany and the company who intended to talk with us is taken as a sample. I tried to getrid of any kind of personal biasness and taking true information. Data analysis We analyzed the data by averaging the response of the sample. Most of the analysis anddiscussions of this study have been made on the basis of the information obtained fromthe interview with the questionnaires. Besides, observation of the interviewers has also been an important component of analysis and discussion. Scope of the Study This study has focused upon the various problems regarding with the garments companyand the prospect of these industries. We have taken 5 garments company to gather data onthe present situation of the garments industries as well as problem regarding and thefuture of the industries. 9 |P a g e Limitations of the Report Since our study is based on both primary and secondary data, there is a possibility of get t i n g fak e i nform a t i on. If t he su rve yed personnel provi de u s wi t h an y fabri c at ed information about their opinion of their organization, then the report findings may beerroneous. Above all, this study is weak in some points. The notable ones are as under: The survey was conducted in a very short time so we were not able to collect moreinformation. This survey made on crisis situation of Bangladesh, so it was difficult to collect more samples.

 Only the big and the reputed Garments Company consider here as sample. The ques t i onnai re c ont ai ns som e quest i ons t hat , i f answer e d properl y, m i ght damage the companys image. In this type of questions, the respondents might provide socially acceptable answers. This risk was unavoidable. Anot her l i m i t at i on of t hi s st ud y i s t he pe rsons pri vat e i nfo r m at i on were n o t disclosing some, data and information for obvious reasons, which could be verymuch useful. Lack of experience in this field. Lack of proper authority to conduct the interview program. Analysis Technique & Report Writing At fi rs t , we went t o di fferent garm ent s c om pan y and col l ect i nform at i on from t he personnel. In preparing this report, we approached according to the following procedure: 10 |P a g e Select the topicConduct surveySorting informationAnalysis and evaluation of the informationReport writing and presenting The Bangladesh Garment Industry For Bangladesh, the readymade garment export industry has been the proverbial goose thatlays the golden eggs for over fifteen years now. The sector now dominates the moderneconomy in export earnings, secondary impact and employment generated. The events in1998 serve to highlight the vulnerability of this industry to both internal and externalshocks on the demand and supply side. Given the dominance of the sector in the overallmodern economy of Bangladesh, this vulnerability should be a matter of some concern tothe policymakers in Bangladesh. Although in gross terms the sectors contributions to thecountrys export earnings is around 74 percent, in net terms the share would be much less part i al l y b ecaus e t h e backw ard l i nka ges i n t ex t il e have bee n sl ow t o devel op. Thedependence on a single sector, no matter how resilient or sturdy that sector is, is a matter of policy concern. We believe the policymakers in Bangladesh should work to reduce thisdependence by moving quickly to develop the other expo rt industries using the lessonslearned from the success of apparel exports. Support for the apparel sector should not bereduced. In fact, another way to reduce the vulnerability is to diversify the product and themarket mix. It is heartening to observe that the knit products are rapidly gaining share inoverall garment exports as these products are sold in quota -free markets and reflect thestrength of Bangladeshi producers in the fully competitive global apparel markets.Preliminary data and informal evidence indicate that this sector seems to have weatheredthe devastating floods relatively well. The industry is one hundred percent exportorientedand therefore insulated from domestic demand shocks; however, it remains vulnerable todomestic supply shocks and the smooth functioning of the banking, transportation andother forward and backward linkage sectors of the economy. The Dhaka-Chittagong roadremains the main transportation link connecting the production units, mostly situated in andaround Dhaka and the port in Chittagong, where the raw material and the finished productsare shipped in and out. Despite increased dependence on air transportation, trucks remainthe main vehicles for transporting raw materials and finished products for

Bangladeshgarment exports. The floods disrupted the normal flow of traffic on this road.Eventually, this road link was completely severed for several days when large sections of the road went under water for a few weeks during the latter phase of the floods. Thisdelinking of the road connection between Dhaka and the port in Chittagong was as seriousa threat as one can imagine for the garment exporters. The industry responded by callingupon the Bangladesh navy to help with trawlers and renting a plane from Thai Air that wasused to directly fly garment consignments from the Dhaka airport to the Chittagong airportseveral times a day. 11 |P a g e Picture : Garments products of Bangladesh Contribution of the RMG Industry RMG business started in the late 70s as a negligible non-traditional sector with a narrow export bas e and b y t he ye ar 1983 i t em erged as a prom i si ng ex port earni n g se ct or; pres ent l y i t 12 |P a g e contributes around 75 percent of the total export earnings. Over the past one and half decade,RMG export earnings have increased by more than 8 times with an exceptional growth rate of 16.5 percent per annum. In FY06, earnings reached about 8 billion USD, which was only lessthan a billion USD in FY91. Excepting FY02, the industry registered significant positive growththroughout this period In terms of GDP, RMGs contribution is highly remarkable; it reaches 13 percent of GDPwhich was only about 3 percent in FY91. This is a clear indication of the industrys c o n t r i b u t i o n t o the overall economy. It also plays a pivotal role to promote t h e development of other key sectors of the economy like banking, insurance, shipping,hotel, tourism, road transportation, railway container services, etc.A 1999 study found the industry supporting approximately USD 2.0 billion worth of economic activities (Bhattacharya and Rahman), when the value of exports stood at a little over USD 4.0 billion.One of the key advantages of the RMG industry is its cheap labor force, which providesa com pet i t i ve edge over i t s com p et i t ors. The sect or h as cre at ed j obs for about t womillion people of which 70 percent are women who mostly come from rural areas. Thesector opened up employment opportunities for many more individuals through directa n d i n d i r e c t e c o n o m i c a c t i v i t i e s , w h i c h e v e n t u a l l y h e l p s t h e c o u n t r y s s o c i a l development, woman empowerment and poverty alleviation. Exporting Condition of Garments Industry The Ready-Made Garments (RMG) industry occupies a unique position in theBangladesh econom y. It is the largest exporting industry in Bangladesh, which 13 |P a g e experienced phenomenal growth during the last 20 years. By taking advantage of aninsulated market under the provision of Multi Fibre Agreement (MFA) of GATT, itattained a high profile in terms of foreign exchange earnings, exports, industrializationand contribution to GDP within a short span of time. The industry plays a key role inemployment generation and in the provision of income to the poor. Nearly two millionworkers are directly and more than ten million inhabitants are indirectly associated withthe industry. Over the past twenty years, the number of manufacturing units has grownfrom 180 t o over 3600. The s ect or h as al so pl a ye d a si gni fi cant rol e i n t he soci o -economic development of the country.The Agreement on Textile and Clothing (ATC) introduced in 1994, aimed at

bringingtextiles and clothing within the domain of WTO rules by abolishing all quotas by theend of 2004. It provides an adjustment period of 10 years, so that countries affected byt he M FA coul d t ak e t he necessa r y st eps t o a dj ust t o t he new t ra di ng env i ronm ent . Liberalization of trade following the Uruguay Round agreement presents opportunitiesas well as challenges for a developing country like Bangladesh in RMG sector. In thePost-Uruguay Round period, traditional instruments of trade policy such as tariffs,quotas, and subsidies will become less feasible and less relevant. In a liberalized traderegime, competition among textiles and clothing exporting countries is likely to becomeintense. The objective of this paper is to identify the prospects of RMG industry after theMFA phase out by analyzing the current scenario along with different policy measuresand the available options in order to be more competitive in the new regime.The export made by Garments Industries of Bangladesh is improving year after year e x cept som e of t he ye a r. S t ri ke, l a yout , shut down of com pa n y, pol i t i cal probl e m ,econom i c probl em , i nfl at i on e t c. are t he p ri m e cau se of dec reasi n g ex port i n t hi s important sector. But above it, Readymade Garments Industries is the leading sector inexport sector. Year Export (in US $ million) Percentage change 1991 92 624.16 32.491992 93 866.82 38.881993 94 1182.57 36.431994 95 1445.02 22.191995 96 1555.79 7.671996 97 2228.35 43.471997 98 2547.13 14.11 14 |P a g e 1998 99 3001.25 17.831999 00 3781.94 26.012000 01 4019.98 6.292001 - 02 4349.41 8.192002 03 4859.83 11.742003 04 4583.75 5.682004 05 4912.12 7.212005 06 5686.09 15.83 Figure: Year Export by the garments industries (in US $ million) Average Quota Prices of Selected Garments Items Exported by Bangladesh, 2006 Table: Quota Prices of Selected Garments Items ExportedPosition of Bangladesh is exporting product in USA is not very satisfactory but this situation is better than any other condition of the previous time. But if our Governmentt a k e s o m e e s s e n t i a l l a w a n d b r e a k o u t t h e w a l l o f b i a s n e s s t h e n t h e p o s i t i o n o f Bangladesh in Garments sector would be hope to better. 15 |P a g e Table: Exports of Knit and Woven Garments to the United States (Source: Export Promotion Bureau of Bangladesh ) Findings 16 |P a g e From the survey we have found some tremendous information that help to build our practical knowledge about the garments industry of our country. Through our survey wetry to bring out the present situation, problems and the prospects of these industries. Inthese aspects we divided our finding into three main parts. First part contains the generalinformation about the garments industries of our country and the other second and third part contains the problems and the prospects of these industries sequentially. Thesetopics are discussed belowCompany profile

We take information from five leading garments company to identify the problem of thissector. Short profile of the Company are given belowMillenium Garments Limited It is a manufacturing company, established in 1990. More than 1200 employees foundtheir working place in this organization. Different types of modern equipment in here to 17 |P a g e run the production smoothly. Such as- 450 pcs of different type of cutting, sewing andfinishing machines supplied by mostly Singer and Brother. Its main market for exportingis European Countries, USA. And the other customer groups are Ekinsa, Spain; Vesage,UK; Etam, Singapore; Vetura, France; Amcobus, U.S.A; Miles, Germany; Star Wear,U.S.A. It is one of the leading exports Garment Company of our country. RAHAN GARMENTS (PVT) LTD It was founded i n 1993. R a han st art ed m anuf ac t uri ng and ex port i ng from 1995.M anufact u rer and ex port er of al l t yp e o f appa rel s, spe ci al i z ed i n under ga rm ent s , sportswear and knit & woven garments. The total working area comprises of 29,000square feet in one floor. Their plant and office is located in the central part of the city.Thi s gi ve se curi t y and conveni en ce f or t he t ransport at i on of goods and al l ki nds of supports needed for daily production and financial facility. TOKIO MODEL LIMITED. The company was established in 1990 as a Public Limited Company. The companyauthorized capital was in US $ 12.7 Million. Its production capacity is 29,000 Doz/Month Approx. Oven & Knitwear Items. More than 750 employees participate here inthe manufacturing activities. It is another leading Garment Company of our country.F a b r i c s & C o m m o d i t i e s E x c h a n g e L t d s a w e l l r e p u t e d G a r m e n t s E x p o r t e r s i n Bangladesh. Accordingly as a first step of their customer familiarization process, theywould like to brief with their business process and how this could be of any interest totheir organization. Based in Dhaka, Bangladesh they manufacture over 200,000 units amonth including Knit, Woven and Sweater. A highly qualified team of QA foresees themanufacturing process. Reliability and cost effectiveness are on the utmost prioritywhile we provide value added services to our vast growing client list. ALAM FIBER IMPEX LIMITED 18 |P a g e Alam Fiber Impex is one of the leading Exporter and Manufacturer's agents inBangladesh. It was established in 1988. It basically works w i t h t h e p r o d u c t o f - RAWJUTE (JUTE FIBER) JUTE YARN / JUTE TWINE JUTE CLOTH (HESSIAN /CBC) JUTE BAG / JUTE SACKS HANDICRAFTS READY-MADE GARMENTS . They demand they offer reasonable price for their products. There stay some motto withwhi ch Al am Fi ber Im p ex wi l l i ng t o run - W e m a i nt ai n qual i t y prope rl y, w e neve r

com prom i se wi t h qual i t y, Ti m el y shi pm ent i s our busi ness e t hi cs, and C us t om ers satisfaction is our motto. Problems Regarding With RMG The garment industry of Bangladesh has been the key export division and a main sourceof foreign exchange for the last 25 years. National labor laws do not apply in the EPZs,l e avi ng BEP ZA i n ful l cont r ol over work condi t i ons, wa ges and b ene fi t s. Garm ent factories in Bangladesh provide employment to 40 percent of industrial workers. Butwithout the proper laws the worker are demanding their various wants and as a resultconflict is began with the industry.Low working salary is another vital fact which makes the labor conflict. Worker madestrike, layout to capture their demand. Some time bonus and the overtime salary are theimportant cause of crisis. Insufficient government policy about this sector is a great problem in Garments Company.There are some other problems which are associated with this sector. Those are- lack of marketing tactics, absence of easily on-hand middle management, a small number of m a n u f a c t u r i n g m e t h o d s , l a c k o f t r a i n i n g o r g a n i z a t i o n s f o r i n d u s t r i a l w o r k e r s , supervisors and managers, autocratic approach of nearly all the investors, fewer processuni t s for t ex t i l es and garm ent s, sl u ggi sh backward o r for ward bl endi n g pro ce dure, incompetent ports, entry/exit complicated and loading/unloading takes much time, time-consuming custom clearance etc. 19 |P a g e Picture : Labor- Management conflict in Garments Industry According to our survey in five leading Company we found some problem which aregiven in a chart with their percentagePrimary Problems P r o b l e m s h i g h m e d i u m l o w t o t a l 01.Rawmaterials3 2 0 5 6 0 % 4 0 % 1 0 0 % 02. Marketing problems1 3 1 5 2 0 % 6 0 % 2 0 % 1 0 0 % 03. Machinery problem5 0 0 5 1 0 0 % -

1 0 0 workforce3 2 0 5 % 4 0 % 1 0 0 % problem1 1 3 5 2 0 % 6 0 0 % 06. Quota problem4 1 0 5 % 2 0 % 1 0 0 % policy3 2 0 5 % 4 0 % 1 0 0 % unrest/strike5 0 0 5 0 % 1 0 0 Chart: Primary problems of Garments Industries20 |P a 0204060801001201 3 4 6 7 PPs e )m co r r nb ae t l g e ( % m i r P e l b o y a s High Medium Low Graph: Primary problems of Garments Industries Secondary problems P r o b l e g h m e d i w t o t a l affect1

04. Inefficient

0 05. Licensing

2 %

0 1

% 0

0 07. Poor government

6 08. Labor

1 % g e 2 5 8

m s u m 01.Middle man

h l

i o

3 1 5 2 0 % 6 0 % 2 0 % 1 0 0 % 02. Sluggish business linkage0 2 3 5 4 0 % 6 0 % 1 0 0 % 03. Unloading(RM) takes time2 2 1 5 4 0 % 4 0 % 2 0 % 1 0 0 % 04. Time consuming schedule2 3 0 5 4 0 % 6 0 % 1 0 0 % 05. Communication gap1 2 2 5 2 0 % 4 0 % 4 0 % 1 0 0 % 06. Dependency on foreign market5 0 0 5 1 0 0 % 1 0 0 % 07. Trade block 0 2 3 5 4 0 % 6 0 % 1 0 0 % 08. Credit problem2 3 0 5 4 0

% 6 0 % 1 0 0 % Chart: Secondary problems of Garments Industries21 |P a g e 0204060801001201 2 3 4 5 6 7 8 PPs e )m co r r nb ae t l g e ( % m i r P e l b o y a s High Medium Low Graph: Secondary problems of Garments Industries Safety Problems Safety need for the worker is mandatory to maintain in all the organization. But withoutthe facility of this necessary product a lot of accident is occur incurred every year in most of the company. Some important cause of the accident are given below- Routes are blocked by storage materials Machine layout is often staggered Lack of signage for escape route No provision for emergency lighting Doors, opening along escape routes, are not fire resistant. Doors are not self-closing and often do not open along the direction of escape. Adequate doors as well as adequate staircases are not provided to aid quick exit Fire exit or emergency staircase lacks proper maintenance Lack of proper exit route to reach the place of safety 22 |P a g e Parked vehicles, goods and rubbish on the outside of the building obstruct exits to theopen air Fi re i n a B an gl ade sh fact or y i s l i kel y t o spread qui ckl y be cause t he pri nci pl e of compartmentalization is practiced Lack of awareness among the workers and the ownersBut now the situation is much improved and we found, all the surveyed garments arefulfilling the requirement of emergency exit. It is provided in all the cases, signage is present and fire fighting equipments are up to date, a departure from the past. Even firedrill is held once in a month. Fire safety in garments industry: Necessary Design matters 23 |P a g e Picture: Training are now providing to the workers about what they do when the fire drill isheld in garments industry. Bangladesh Faces the Challenge of Globalization Bangladesh faces the challenge of achieving accelerated economic g r o w t h a n d alleviating the massive poverty that afflicts nearly two-fifths of its 135 million people.To meet this challenge, market-oriented liberalizing policy reforms were initiated in themid-1980s and were pursued much more vigorously in the 1990s. These reforms were particularly aimed at moving towards an open economic regime and integrating with theglobal economy. 24 |P a g e During the 1990s, notable progress was made in economic performance. Along withm a i n t a i n i n g e c o n o m i c s t a b i l i z a t i o n w i t h a s i g n i f i c a n t l y r e d u c e d a n d d e c l i n i n g dependence on foreign aid, the economy appeared to begin a transition from stabilizationto growth. The average annual growth in per capita income had steadily accelerated

fromabout 1.6 per cent per annum in the first half of the 1980s to 3.6 percent by the latter half of the 1990s. This improved performance owed itself both to a slowdown in populationgrowth and a sustained increase in the rate of GDP growth, which averaged 5.2 percentannually during the second half of the 1990s. During this time, progress in the humandevelopment indicators was even more impressive. Bangladesh was in fact among thetop performing countries in the 1990s, when measured by its improvement in the HumanDevelopment Index (HDI) as estimated by the United Nations Development Project ( U N D P ) . I n t e r m s o f t h e i n c r e a s e i n t h e v a l u e o f H D I b e t w e e n 1 9 9 0 a n d 2 0 0 1 , Bangladesh is surpassed only by China and Cape Verde.While most low-income countries depend largely on the export of primary commodities,Bangladesh has made the transition from being primarily a jute-exporting country to agarm ent - ex port i ng one. Thi s t ransi t i on has been di ct at ed b y t he coun t r y's r esourc e endowment, characterized by extreme land scarcity and a very high population density,making economic growth dependent on the export of laborintensive manufactures.In the wake of the 2001 global recession, Bangladesh's reliance on foreign countries as amarket for exports and as a source of remittances has become obvious. If Bangladesh isto become less vulnerable to the economic fortunes of others, it will need to strengthenits domestic economy, creating jobs and markets at home. A strong domestic sector andan i m proved ove r al l i nvest m ent envi ronm ent wi l l provi de a m ore st abl e s ource of income - like what the garment industry has provided so far - and will rekindle andsustain Bangladesh's economic growth. Prospects of the RMG Industry Despite many difficulties faced by the RMG industry over the past years, it continued toshow its robust performance and competitive strength. The resilience and bold trend inthis MFA phase-out period partly reflects the imposition of safeguard quotas by US andsi m i l ar r est r i ct i ons b y EU adm i ni s t rat i on on Chi na up t o 2008, whi ch has been t he largest supplier of textiles and apparel to USA. Other factors like price competitiveness,enhanc ed G S P faci l i t y, m arket and produ ct di versi fi cat i on, che a p l abor, i ncre ased backward integration, high level of investment, and government support are among thekey factors that helped the country to continue the momentum in export earnings in theapparel sector. Some of these elements are reviewed below. 25 |P a g e Market Diversification Bangladeshi RMG products are mainly destined to the US and EU. Back in 1996 97,Bangladesh was the 7th and 5th largest apparel exporter to the USA and European Unionrespectively. The industry was successful in exploring the opportunities in markets awayfrom EU and US. In FY07, a successful turnaround was observed in exports to thirdcountries, which having a negative growth in FY06 rose three -fold in FY07, whichhelped to record 23.1 percent overall export growth in the RMG sector. It is anticipatedthat the trend of market diversification will continue and this will help to maintain thegrowth momentum of export earnings. At the same time a recent WTO review points outthat Bangladesh has not been able to exploit fully the dut y free access to EU that itenjoys. While this is pointed out to be due to stringent rules of origin (ROO) criteria, therelative stagnation in exports to EU requires further analysis. Product Diversification The growth pattern of RMG exports can be categorized into two distinct phases. Duringthe initial phase it was the woven category, which contributed the most. Second phase isthe emergence of

knitwear products that powered the recent double digit (year-on-year)growth starting in FY04. In the globalized economy and ever-changing fashion world, product diversification is the key to continuous business success. Starting with a few items, the entrepreneurs of the RMG sector have also been able to diversify the product base ran gi n g from ordi nar y shi rt s , T s hi rt s , t rousers, short s, paj am as, l adi es andchi l drens wea r t o sophi st i cat ed hi gh val ue i t em s l i k e qual i t y sui t s, bran ded j eans, jackets, sweaters, embroidered wear etc. It is clear that value addition accrues mostly inthe designer items, and the sooner local entrepreneurs can catch on to this trend the brighter be the RMG future. Backward Integration RMG industry in Bangladesh has already proved itself to be a resilient industry and can be a catalyst for further industrialization in the country. However, this vital industry stilldepends heavily on imported fabrics. After the liberalization of the quota regime some of the major textile suppliers Thailand, India, China, Hong Kong, Indonesia and Taiwan increased their own RMG exports. 26 |P a g e Figure: Trend to back-to-back linkageIf Bangladesh wants to enjoy increased market access created by the global open marketeconomy it has no alternative but to produce textile items competitively at home throughthe establishment of backward linkage with the RMG industry. T o some extent theindustry has foreseen the need and has embarked on its own capacity building. Flow of Investment It is plausible that domestic entrepreneurs alone may not be able to develop the textileindustry by establishing modern mills with adequate capacity to meet the growing RMGdemand. It is important to have significant flow of investment both in terms of financea n d t e c h n o l o g y . Figure 3 indicates that the investment outlook in this sector i s encouraging, although the uncertainties before the MFA phas e-out period caused asluggish investment scenario. In part the momentum in the post-MFA phase-out period isi n d i c a t i v e o f t h e e f f o r t s u n d e r w a y t o w a r d s c a p a c i t y b u i l d i n g t h r o u g h b a c k w a r d integration. This is evident in the pace of lending to the RMG sector an d in the risingimport share of RMG related machinery. However further progress would be necessaryto improve and sustain competitiveness on a global scale. Policy Regime of Government Government of Bangladesh has played an active role in designing policy support to theRMG sector that includes back-to-back L/C, bonded warehouse, cash incentives, exportcredi t gua rant e e schem e, t ax hol i da y and rel at ed faci l i t i es. At pre sent gove rnm ent oper at es a cash com p ensat i o n schem e t hrou gh w hi ch dom est i c s uppl i ers t o ex por t -oriented RMG units receive a cash payment equivalent to 5 percent of the net FOB valueof exported garments. At the same time, income tax rate for textile manufacturers wereredu ced t o 15 per cent fr om i t s earl i er l evel for t he peri od up t o J une 30, 2008. T hereduced tax rates and other facilities are likely to have a positive impact on the RMGsector. 27 |P a g e Infrastructural Impediments The existence of sound infrastructural facilities is a prerequisite for e c o n o m i c development. In Bangladesh, continuing growth of the RMG sector is dependent on thedevelopment of a strong backward linkage in order to reduce the lead time. However,other

factors constraining competitiveness of Bangladeshs RMG exports included theabsence of adequate physical infrastructure and utilities. Labor Productivity The productive efficiency of labor is more important determinant for g a i n i n g comparative advantage than the physical abundance of labor. In Bangladesh, the garmentworkers are mostly women with little education and training. The employment of anuneven number of unskilled labors by the garment factories results in low productivityand comparatively more expensive apparels. Bangladesh labor productivity is known to be lower when it compared with of Sri Lanka, South Korea and Hong Kong. Bangladeshmust look for ways to improve the productivity of its labor force if it wants to competere gi onal l y i f not gl obal l y. B ec ause of cheap l abo r i f our c ount r y m ak es t he l a bor product i vi t y i n t he apex posi t i on, t hen we t hi nk t he f ut ure of t hi s s ect or i s hi ghl yoptimistic. Research and Training The country has no dedicated research institute related to the apparel sector. RMG ishighly fashion oriented and constant market research is necessary to become successfulin the business. BGMEA has already established an institute which offers bachelors de gr ee i n fas hi on desi gni n g and BKME A i s pl anni ng on set t i ng u p a rese arch and t r a i n i n g i n s t i t u t e . T h e s e a n d r e l a t e d i n i t i a t i v e s n e e d e n c o u r a g e m e n t p o s s i b l y intermediated by donor-assisted technology and knowledge transfer. A facilitating publicsector role can be very relevant here. Supportive Government Policy In contrast to the public sector-led import-substituting industrialization strategy pursuedduring the first few years after independence, the industrializ ation philosophy of thegovernment changed rather dramatically from the late 1970s when the emphasis was onex port -ori ent ed gr owt h t o be spearh ea ded b y t h e pri vat e s ect or. Tow ards t hi s end,vari ous pol i c y r eform s w er e i m pl em ent ed i n t he 19 80s and 1990s. S om e of t hesere for m ed pol i ci es cont ri b ut ed consi derabl y t o t he gro wt h of t he R M G i ndust r y i n Bangladesh.During the 1980s, a number of incentives were introduced to encourage export activities.Some of them were new like the Bonded Warehouse Facility (BWF), while others likethe Export Performance License (XPL) Scheme 28 |P a g e 37 were already in operation and were improved upon. Also, rebates were given onimport duties and indirect taxes, there were tax reductions on export income, and exportfinancing was arranged. Under the XPL scheme, exporters of non-traditional productsreceived import licenses for specific products over and above their normal percentageallotment based on the f.o.b. value of their exports. Under the Duty Drawback System,exporters of manufactured goods were entitled to get refund of duties and taxes paid onimported inputs used in export production, and also all excise duties paid on exportedfinished goods. For certain fast-moving items such as RMG, a notional system of duty payments was adopted in 1982-83. Under this system, exporters were exempted from paying duties and taxes on imports used in export production at the time of importation, but were required to keep records of raw and 21packaging materials imported. The duties and taxes payable on the imports were kept in a suspense account. Liabilities to pay the amounts in suspense were removed on proof of exports.The discussion in this section clearly points to the positive contribution made by policyreforms to the growth of the RMG industry in Bangladesh. In particular, two policies the SBW facility and the back-to-back L/C system- led to significant

reduction in costof producing garments and enhanced competitiveness of Bangladeshs garments exports.It also allowed garment manufacturers to earn more profit which, when necessary, could be used to overcome difficulties arising from weak governance. Furthermore, poor gove rnanc e, r efl ect e d i n t he l eaka ge o f dut y -f ree i m port ed f abri cs i n t he dom es t i cm arket , par adox i cal l y enou gh a l so hel ped t he garm ent m anufact u rers t o earn ex t ra profit and thereby enabled them to absorb the high cost of doing businesses a fall outof bad governance. Recommendation Bangladesh economy at present is more globally integrated than at any time in the past.The MFA phase-out will lead to more efficient global realignments of the Garments andClothing industry. The phase out was expected to have negative impact on the economyof Bangladesh. Recent data reveals that Bangladesh absorbed the shock successfully andindeed RMG exports grew significantly both in FY06 and (especially) in FY07. Due to anumber of steps taken by the industry, Bangladesh still remains competitive in RMG exports even in this post phase-out period.Our Garments Industries can improve their position in th e world map by reducing theove ral l p robl em s. S uch as m a nagem ent l abor conf l i ct , proper m ana gem ent pol i c y, efficiency of the manager, maintainable time schedule for the product, proper strategic plan etc.Government also have some responsibility to improve the situation by providing- proper policy to protect the garments industries, solve the license problem, quickly loadingfacility in the port, providing proper environment for the work, keep the industry free 29 |P a g e from all kind of political problem and the biasness. Credit must be provided when theindustry fall in need.To be an upper position holder in the world Garments Sector there is no way exceptfollow the above recommendations. We hope by maintaining proper management and policy strategies our country will take the apex position in future. Suggestions Regarding Fire Safety We need to remember that when there is a fire, the first thing one should do is to runawa y from i t . An d t hi s i s what ever yone does i n such a s i t uat i on. But t he s i t uat i on become dangerous and tragic when the escape doorways and gates are found locked.Precautionary should need to be adopted are given below: Building should be constructed with fire resisting materials Adequate exits and proper escape routes should be designed Protection against fire and smoke should be ensured Electrical wiring must be properly designed, installed and maintained Escape routes should be lighted at all times, kept clear, be indicated by signs Regular fire drills should be held Doors should be protected and should open along the direction of escape Doors should not open on the steps and sufficient space should be provided. 30 |P a g e Smoke/Fire alarm systems must be installed adequate number of extinguishers should be provided Prior relationship with local Fire services should be established Conclusion The Ready-Made Garments (RMG) industry occupies a unique position in theBangladesh econom y. It is the largest exporting industry in B a n g l a d e s h , w h i c h experienced phenomenal growth during the last 25 years. By taking advantage of aninsulated market under the provision of Multi Fibre Agreement (MFA) of GATT, itattained a high profile in terms of foreign exchange earnings, exports,

industrializationand contribution to GDP within a short span of time. The industry plays a key role ine m p l o y m e n t g e n e r a t i o n a n d i n t h e p r o v i s i o n o f i n c o m e t o t h e p o o r . T o r e m a i n co m pet i t i ve i n t he post -MFA phas e, B an gl adesh needs t o rem ove al l t he st ruc t ural impediments in the transportation facilities, telecommunication network, and power supply, management of seaport, utility services and in the law and order situation. Thegove rnm ent and t he R MG sect or woul d have t o j oi nt l y wo rk t oget he r t o m ai nt ai ncom pet i t i veness i n t he gl ob al R MG m arket . Gi ven t he rem a rkabl e ent rep reneu ri al i n i t i a t i v e s a n d t h e d e d i c a t i o n o f i t s w o r k f o r c e , B a n g l a d e s h c a n l o o k f o r w a r d t o advancing its share of the global RMG market. 31 |P a g e 32 |P a g e References 1.Abdullah, Md. Abu Yousuf, 1997, International Trade Implications a n d F u t u r e o f Ready-Made Garments Sector of Bangladesh Journal of Business Administration, Vol.23, No. 3 & 4, Page 41-69.2 . A z i m , M . T a h l i l , a n d N a s i r U d d i n , 2 0 0 3 , C h a l l e n g e s f o r G a r m e n t s S e c t o r i n Ban gl ad esh Aft e r 2004: Avenues for S urvi val and Growt h Ban gl ad esh Inst i t ut e of International and Strategic Studies Journal, Vol. 24, No. 1, Page 49-82.3.Bhattacharya, D and M. Rahman, 1999, Female Employment Under Export-PropelledIndust ri al i z a t i on: P rospect s for Int ern al i z i ng Gl obal Opport uni t i es i n Ban gl ad esh 's Apparel Sector, UNRISD Occasional Paper.4. Bha t t achar ya, D and M. R ahm an, 2000, Ex peri enc e wi t h Im pl em ent at i on of W TO -ATC and Implications for Bangladesh, CPD Occasional Paper Series, Paper 7.5.Bhattacharya, D, M. Rahman and A. Raihan, 2002, Contribution of the RMG Sector tothe Bangladesh Economy, CPD Occasional Paper Series, Paper 50.6.Bow, J. J, 2000, Bangladeshs Export Apparel Industry into the 21stCentury the NextChallenge, The Asia Foundation.7.Centre for Policy Dialogue, 1999, The Textile and Clothing Industry of Bangladesh: Ina Changing World Economy, CPD Dialog Report No. 18, Dhaka, Bangladesh, 2003,C opi ng wi t h P o s t -MF A C hal l enges: S t rat egi c R esponses for B an gl adesh R M G Sector, CPD Dialog Report No. 55, Dhaka, Bangladesh.8. Isl am , S adequl , 2001, The T ex t i l e and C l ot hi ng Indust r y o f Ban gl ad esh i n a C ha ngi n g World Economy, CPD and The University Press Ltd.9 . J a h a n , S a r w a t , 2 0 0 5 , T h e E n d o f M u l t i - F i b e r A r r a n g e m e n t : C h a l l e n g e s a n d Opportunities for Bangladesh, WBI Policy Note.10.Katti, Vijaya and Subir Sen, 2000, MFA Phasing Out and Indian Textiles Industry:Selected Issues for Negotiation, Foreign Trade Review, Vol. XXXIV No. 3 & 4, Page102-120.1 1 . M a n n u r , H . G . , 2 0 0 0 ( s e c o n d r e v i s e d e d i t i o n ) , I n t e r n a t i o n a l E c o n o m i c s , V i k a s Publishing House Pvt Ltd., India.12.Mlachula, Montfort and Yongzheng Yang, 2004, The End of Textiles Quotas: A Case Study of the Impact on Bangladesh, IMF Working Paper WP/04/08. .13.World Trade Organization, 2006, Trade Policy Review, Geneva