Owners, experts cautious to react
Labour leaders on Thursday doubted the World Bank’s latest observation on Bangladesh’s apparel sector while trade experts and businessmen gave cautious reactions.
The World Bank in its latest report released on Wednesday in Washington DC said that impending political transition and damaged image of the apparel sector due to recurring accidents were leading Bangladesh’s economy to uncertainty.
The apparel exports accounted around 80 per cent of the country’s $27.05 billion export earnings in the last fiscal.
The sector may become a $36-$42 billion revenue earner by 2020 if it can prevent the recurrence of the horrors seen in the Tazreen Fashions and Rana Plaza disasters, said the report titled the ‘South Asia Economic Focus—A Wake-Up Call.’
The report said that safety concern might prompt the international buyers to cut their reliance on Bangladesh, or even abandon the country altogether.
Garment Sramik Oikya Forum president Mushrefa Mishu told New Age that she doubted the report on the country’s apparel sector and their international buyers.
She said that there was no sign from the international buyers to cut their reliance on Bangladesh for apparel products because of cheap rate.
The country’s exports grew 21.24 per cent year-on-year between July-September despite two factory disasters and labour unrest, she added.
A study by consulting firm McKinsey & Co in the last month revealed that Bangladesh’s $20 billion garment business came out ahead of smaller rivals Vietnam and Cambodia in the ranking of countries with the highest potential for future sourcing.
‘Bangladesh is still number 1,’ said Achim Berg, a partner in McKinsey`s German office, and the author of the study.
‘Recent events present a challenge for everyone, but there is no alternative for doing big production volumes,’ he said.
Bangladesh Garment Sramik Trade Union Centre general secretary Kazi Mohammad Ruhul Amin said that the World Bank report would help the international buyers in price negotiation.
The local apparel factory owners may delay pay hike of the workers on pretext of the negative outlook, he said, adding that the wages of the most of the apparel workers were lower than that of the workers of other mills and factories.
World Bank had projected bleak feature about the apparel sector in the post Multi-Fibre Arrangement under which developed countries maintained quota for importing apparels from least developing countries including Bangladesh, he said.
Belying the projection, Bangladesh’s apparel sector recorded robust growth with the phase out of the MFA in 2004. Within four financial years apparel exports reached $10.7 billion in 2007-08 from $5.6 billion in 2003-04.
Bangladesh Garment Manufacturers and Exporters Association president Atiqul Islam said that the present situation was more critical than ever for the apparel sector.
He said that the report on the country’s economy due to political uncertainty had already expressed by the businessmen.
The impressive export earnings in the first quarter do not reflect the actual position of the apparel sector which is facing many challenges including workers unrest, he said.
Centre for Policy Dialogue executive director Mustafizur Rahman, however, termed the export earnings growth in the first quarter as impressive.
He attributed to the impressive export growth for the global economic recovery. He admitted that cheap labour was still a big advantage for the country’s apparel sector.
He, however, supported the concerns expressed by the World Bank in the report saying political uncertainty would cost the nation dearly.
He said that local apparel sector might face the adverse impact in future because of depreciation of Indian currency against the US dollar sharply.
Courtesy of New Age
