The RMG industry
can then cut and stitch the finished product into apparel, which is
then marketed. In 1978 the RMG industry was established in Bangladesh
with nine enterprises and has grown at a blistering pace since. This
phenomenal growth is due largely to the simple level of technology
required in the industry. The machinery is relatively inexpensive and
easily available. In addition, garment producers can operate in smaller
premises than those required by most of the processes in the textile
industry. On top of this, Bangladesh has an abundant supply of cheap
labor consisting mostly of women for whom this is one of the most
suitable forms of employment.
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| Ready made Garments Industry ( RMG ) in Bangladesh |
These factors, as well as incentives
such as liberal trade policies, low tariffs on imported machinery, and
bonded warehouse facilities, which allow the importation of raw
materials to be processed for export have done much to facilitate the
growth of the garment industry. However, probably the most important
factor in this growth is the benefit of reserved markets that Bangladesh
enjoys under the Multi Fiber Arrangements, or MFA.
The Textile exporting nations in the world fall under the trading conditions determined by the MFA, which is included in the General Agreement for Tariff and Taxation, or GATT.
According to the MFA, developed nations are required to guarantee the import of a certain amount of their textile needs from developing nations. For example, the United States may have assigned the production of a certain amount of textiles to Bangladesh. This would mean that countries such as Bangladesh are assured a market for a specified number of yards of textiles each year. This agreement served to limit the dominance of the textile industries in the more developed world by limiting their share of the global market.
In addition, Bangladesh's garment exporters enjoy the privilege of quota-free entry into the European Union, or EU, whereas their major competitors, such as China, India, Indonesia, Pakistan, Sri Lanka, and Thailand, are subjected to the restrictions of an assigned quota. As a result Bangladesh is able to export everything that it produces, while its more developed competitors are limited to specific amounts assigned through quotas.
The Textile exporting nations in the world fall under the trading conditions determined by the MFA, which is included in the General Agreement for Tariff and Taxation, or GATT.
According to the MFA, developed nations are required to guarantee the import of a certain amount of their textile needs from developing nations. For example, the United States may have assigned the production of a certain amount of textiles to Bangladesh. This would mean that countries such as Bangladesh are assured a market for a specified number of yards of textiles each year. This agreement served to limit the dominance of the textile industries in the more developed world by limiting their share of the global market.
In addition, Bangladesh's garment exporters enjoy the privilege of quota-free entry into the European Union, or EU, whereas their major competitors, such as China, India, Indonesia, Pakistan, Sri Lanka, and Thailand, are subjected to the restrictions of an assigned quota. As a result Bangladesh is able to export everything that it produces, while its more developed competitors are limited to specific amounts assigned through quotas.
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