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Whether Ready-Made Garments (RMG) Playing Role to

Alleviate the Poverty from Bangladesh

Presented ToMd Shoaib Ahmed

Senior Lecturer, School of BusinessASA University Bangladesh (ASAUB)

Presented By:Student Name: Md. Jabed Ali Sh@oN

Student ID: 091-12-0096Course Name: Bangladesh studies

Section: 6(C)

Date of Submission: July 30, 2009

ASA University Bangladesh


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Abstract

The analysts of Bangladesh economy says that the global recession impact for Bangladeshi

Garments and Textile sector will not affect downwards in some way it may bring positive result

also. Thats why I have chosen that Ready-Made Garments (RMG) Playing Role to Alleviate the

Poverty from Bangladesh.

After long analysing I have tried to create a good report about my topic. I have collected data

from Internet and general guide books for my topic. So I have used secondary method based on

the previous literature. After analysing I have found that Ready Made Garments (RMG) are

very important for Bangladesh to alleviate poverty. So I want to say that Ready Made Garments

(RMG) can alleviate the poverty from Bangladesh.


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Introduction

The economy of Bangladesh is largely dependent on agriculture. However, in recent

years, the Ready Made Garments (RMG) sector has emerged as the biggest earner of foreign

currency. The RMG sector has experienced an exponential growth since the 1980s.The sector

contributes significantly to the GDP. It also provides employment to around 2 million

Bangladeshis. An overwhelming number of workers in this sector are women. This has affected

the social status of many women coming from low income families. In the early 1980s, some

Bangladeshis received free training from Korean Daewoo Company. After these workers came

back to Bangladesh, many of them broke ties with the factory they were working for and started

their own factories. The countrys garment manufacturers will try hard to hang on to their last

years record earnings in the wake of falling export orders amid global trade collapse, officials

said Thursday. The financial crisis has already started to adversely impact our industry. So our

main target is to maintain the market share of US$11.88 billion, Abdus Salam Murshedy,

president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), toldreporters after attending a view exchange meeting with the representatives of buyers at his office

in the BGMEA Complex in the city. I have found from this topic, Ready Made Garments

(RMG) have survived for alleviating poverty.

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Overview of Bangladesh

Bangladesh achieved independence in 1971 to struggle against Pakistan. Bangladesh is

undeveloped country thats why our economic condition is not very good.

Although one of the world's poorest and most densely populated countries, Bangladesh has made

major strides to meet the food needs of its increasing population, through increased domestic

production augmented by imports. The land is devoted mainly to rice and jute cultivation,

although wheat production has increased in recent years; the country is largely self-sufficient in

rice production. Nonetheless, an estimated 10% to 15% of the population faces serious

nutritional risk. Bangladesh's predominantly agricultural economy depends heavily on an erratic

monsoonal cycle, with periodic flooding and drought. Although improving, infrastructure to

support transportation, communications, and power supply is poorly developed. Bangladesh is

limited in its reserves of coal and oil, and its industrial base is weak. The country's main

endowments include its vast human resource base, rich agricultural land, relatively abundant

water, and substantial reserves of natural gas.

The educational system in Bangladesh is three-tiered and highly subsidized. The government of

Bangladesh operates many schools in the primary, secondary, and higher secondary levels. It

also subsidizes parts of the funding for many private schools. In the tertiary education sector, the

government also funds more than 15 state universities through the University Grants

Commission. The educational system of Bangladesh faces several problems. In the past,Bangladesh education was primarily a British-controlled, upper-class affair with all courses

given in English and very little being done for the common people. The Bangladesh education

board has taken steps to leave such practices in the past and is looking forward to education as a

way to provide a somewhat poverty-stricken nation with a brighter future. Bangladesh has one of

the lowest literacy rates in South Asia. One study found a 15.5% primary school teacher absence

rate.

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Literature Review

Murshedy Salam Abdus said the sourcing trend of our major importing countries also

reveals dull picture as the US imports of knitwear and woven-wear have shrunk by 5.11 and 7.58

per cent respectively in January 2009 compared to January 2008 and the European Unions

import of woven garment dropped in terms of quantity, especially the last quarter of 2008 posted

a drop of about 5.0 per cent. All these figures are giving a very gloomy forecast for the apparel

market, at least for the year 2009.

He also said the manufacturers were experiencing tremendous pressure on prices over

the past few months in major apparel items they exported. Our factories have been operating

close to the break-even point and such pressure on price would soon turn them non-viable. He

said Bangladesh products are costlier than those of its competitors. So our regular buyers are

redirecting orders to China and Pakistan. It will be tough to do business, if prices are not made

competitive.

Conceptual Framework

I am following secondary method to conduct my research about Ready Made Garments (RMG).

After analysing I have tried to create a good report about my topic. I have collected data from

Internet and general guidebooks for my topic. So I have used secondary method based on theprevious literature. I can write that secondary method is very suitable for my topic.

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Result Analysis

The analysts of Bangladesh economy says that the global recession impact for Bangladeshi

Garments and Textile sector will not affect downwards in some way it may bring positive result

also .The news from Reuters as follows is also a sign to support this analysis:

From Reuters: Bangladeshs exports surged 11.86 percent to $1.378 billion year-on-year

in January on the back of increased sales of clothing and other textiles, data showed on

Thursday, after sales dropped 10 percent in December.

Data from the Export Promotion Bureau showed export earnings in the first seven months

of the 2008/09 fiscal years rose 18.16 percent to $9.13 billion.

Earnings from knit textiles during the period rose 26 percent to $3.8 billion from the

previous year, while exports of woven garments rose 20.6 percent to $3.39 billion.

Despite growth in clothes exports, foreign sales of frozen food, leather, jute goods,

electronics and other items declined as a deepening global slump slashes away at demand

for that items.

Some analysts said Bangladesh did not face any immediate upset in its prime readymade

garment exports yet because the country sells mostly basic and low-cost products.

Bangladesh has set a $16.3 billion export target for the year to June 2009. Exports in theprevious year to June 2008 hit $14.11 billion, of which almost $10.7 billion was from

garments. ($1 = 69 taka)

The countrys garment manufacturers will try hard to hang on to their last years record earnings

in the wake of falling export orders amid global trade collapse, officials said Thursday on 2 nd

July 2009.

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Bangladesh's story of exports can never be told without mentioning the main actor readymade

garments. The export of garment in Bangladesh rose to 10.7 billion U.S. dollars in the last fiscal

year (from July 2007 to June 2008) comparing with 9.3 billion U.S. dollars a year ago,

accounting for 76 percent of total export in the country. The garment industry of Bangladesh

employs around 2.5 million workers, 85 percent of them are women. More than 300,000 new

workers entered the garment sector last year and the total number of workers is now 2.8 million.

From this chart we are finding that, every year many unemployed people are reducing their

unemployment. So we can say that employment is increasing day by day.

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Concluding Remarks

The RMG sector is expected to grow despite the global financial crisis of 2009. As China

is finding it challenging to make textile and foot wear items at cheap price, due to rising labor

costs, many foreign investors, are coming to Bangladesh to take advantage of the low labor cost.

After doing this study I think that Ready Made Garments (RMG) are very important for

Bangladesh economy and alleviating poverty from our country. So I want to say that Ready

Made Garments (RMG) can alleviate the poverty from Bangladesh trough increasing there

activities.

References

Murshedy Salam Abdus, president of Bangladesh Garments Manufacturer and

Exporters association (BGMEA), 2nd July 2009 on meeting,

www.yahoo.com

www.google.com

www.wimax.com

www.educationboard.govt.bd.com

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http://www.yahoo.com/http://www.google.com/http://www.wimax.com/http://www.wimax.com/http://www.educationboard.govt.bd.com/http://www.yahoo.com/http://www.google.com/http://www.wimax.com/http://www.educationboard.govt.bd.com/


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