Maintaining the compliance issues and avoiding the possible political unrest will be the key challenges to the country’s readymade garment sector in 2015 after a year of sluggishness in export, said economists and exporters. The country’s export earnings largely depend on the RMG sector and the challenges of the sector are the main challenges for the export in 2015, they said.In 2014, the export earnings registered slow growth due to impact of political turmoil and two major industrial accidents — Tazreen Fashions fire and Rana Plaza building collapse.
In the first six months of 2014 the export earnings registered a single-digit growth due to political turmoil centring national elections and the last five months registered below 1 per cent growth due to impact of factory fire and building collapse, the exporter said.
Export earnings in January-June period amounted to $14.42 billion, according to the statistics of the Export Promotion Bureau.
In the second half of 2014 the readymade garment sector straggled with shortfall of order due to
non-compliance issues as after Rana Plaza tragedy buyers shifted their orders from the factories housed in shared buildings.
The export earnings in the July-November period of 2014 grew by only 0.92 per cent to $12.07 billion.
‘The successful completion of ongoing remedial process is one of the key challenges to the country’s export in the new year,’ Mustafizur Rahman, executive director of the Centre for Policy Dialogue, told New Age on Wednesday.
The global economy is being recovered and Bangladesh will get advantage of it, he said. ‘But it will take more months to upturn the export earnings growth of RMG,’ he added.
Mustafiz suggested for product and market diversifications and said Bangladesh would have to emphasise on the south-south trade potential.
Former president of the Bangladesh Garments Manufacturers Exporters Association Anwar ul Alam Chowdhury Parvez said poor infrastructure, possible political unrest and high interest rate of bank loan would be the main challenges to the readymade garment sector in 2015.
Though a stable situation is prevailing in the country the international community feared instability due to some recent events, he said.
The government will have to address the situation and to increase diplomacy to raise confidence of the international community, Parvez said.
He said low-cost remediation financing was an important issue for the exporters to retain the production capacity of the factories.
‘This is the time that the retailers groups Accord and Alliance should issue certification to the factories on the outcome of their inspections,’ Parvez said.
He urged the government to appoint lobbyist in the US to boost the export in the market in the new year.
‘Good governance might be another challenge for the export in 2015,’ Parvez added.
Policy Research Institute executive director Ahsan H Mansur said the challenge the garment sector would face in the new year was that the sector would have to recover the lost momentum in the period.
The appreciation of the local currency taka against the US dollar will also trouble the RMG makers, he said.
Mansur suggested the government and large-scale factory owners to take proper initiative to make the medium- and small- scale factories compliant to bring them under order book as the buyers were reluctant to place orders with those factories.
If the medium- and small-scale factories are forced to go beyond production, a big export market might be lost, he said.
‘If we can recover the lost momentum, the buyers will back and export will rebound in 2015,’ Mansur hoped.
Mohammed Hatem, former vice-president of the Bangladesh Knitwear Manufacturers and Exporters Association, said poor infrastructure, shortage of gas and electricity and possible political unrest would be the main challenges to the readymade garment sector in 2015.
‘Entrepreneurs are capable enough and we are ready to face the challenges but the government will have to provide policy support,’ he said.
Successful completion of the remedial process suggested by the retailers groups might be another challenge for the sector in the new year, Hatem added.
-With New Age input
