Bangladesh textile industry
While agriculture for domestic consumption is Bangladesh’s largest employment sector, the money gained from exporting textiles is the single greatest source of economic growth in Bangladesh. Exports of textiles, clothing, and ready-made garments accounted for 77% of Bangladesh’s total merchandise exports in 2002.[1] Only 5% of textile factories are owned by foreign investors, with most of the production being controlled by families or Bangladeshi companies.[2]
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[edit] History of Textile Production in Bangladesh
Immediately after the founding of Bangladesh, tea and jute were the most export-oriented sectors. But with the constant threat of flooding, declining jute fiber prices and a significant decrease in world demand, the contribution of the jute sector to the country’s economy has deteriorated.[3] The garment industry in Bangladesh became the main export sector and a major source of foreign exchange starting in 1980, and exported about $5 billion USD in 2002.[4]
The industry employs about 3 million workers of whom 90% are women.[5] Two non-market factors have played a crucial role in ensuring the garment sector’s continual success namely (a) quotas under Multi- Fibre Arrangement1 (MFA) in the North American market and (b) preferential market access to European markets.[6]
[edit] Effect of the Agreement on Textiles and Clothing
From 1995-2005 the WTO Agreement on Textiles and Clothing (ATC) was in effect, wherein more industrialized countries consented to export fewer textiles while less industrialized countries enjoyed increased quotas for exporting their textiles.[7] Throughout the 10 year agreement, Bangladesh’s economy benefited from quota-free access to European markets and desirable quotas for the American markets.[8]
| export market | USA (textile) | USA (clothing) | EU (textile) | EU (clothing) |
|---|---|---|---|---|
| market share in 1995 | <3% | 4% | <3% | 3% |
| market share in 2004 | 3% | 2% | 3% | 4% |
As the above table shows, the market shares for Bangladeshi textiles in the USA and both textiles and clothing in the European Union have changed during the time period of the ATC.[9] It is uncertain whether these favorable export markets will remain since the expiration of the ATC in 2005.[10] Textile exports from Bangladesh to the United States did increase by 10% in 2009.[11]
[edit] Notes
- ^ "Textiles on the WTO Website". WTO Secretariat. http://www.wto.org/english/tratop_e/texti_e/texti_e.htm. Retrieved 2008-10-29.
- ^ "Garment industries in Bangladesh and Mexico face an uncertain future". Textiles Intelligence. 2003-10-15. http://www.textilesintelligence.com/til/press.cfm?prid=317. Retrieved 2009-08-07.
- ^ Spinanger, D. (1986). "Will the MFA keep Bangladesh Humble?". In the World Economy (Basil Blackwell Publisher) 10 (1): 75–84.
- ^ Mahmood, S.A. (2002). "How the Bangladesh garment Industry took off in the early eighties: The role of policy reforms and diffusion of good practices". Alochona Magazine (8).
- ^ Begum, N. (2001). "Enforcement of Safety Regulations in the Garment Sector of Bangladesh: Growth of Garment Industry in Bangladesh, Economic and Social Dimension.". Proceedings of a National seminar on ready-made garment industry: 208–226.
- ^ Bhattacharya, D.; Rahman, M (2001). "Bangladesh’s Apparel sector: Growth trends and the Post-MFA challenges". Proceedings of a National seminar on ready-made garment industry: 2–26.
- ^ "Textiles on the WTO Website". WTO Secretariat. http://www.wto.org/english/tratop_e/texti_e/texti_e.htm. Retrieved 2008-10-29.
- ^ "Garment industries in Bangladesh and Mexico face an uncertain future". Textiles Intelligence. 2003-10-15. http://www.textilesintelligence.com/til/press.cfm?prid=317. Retrieved 2009-08-07.
- ^ Hildegunn Kyvik Nordas (2004). "The Global Textile and Clothing Industry post the Agreement on Textiles and Clothing". WTO Secretariat. http://www.wto.org/english/res_e/booksp_e/discussion_papers5_e.pdf. Retrieved 2009-08-07.
- ^ Monfort Mlachila and Yongzheng Yang (2004). The End of Textiles Quotas: A Case Study of the Impact on Bangladesh. IMF. http://books.google.com/?id=eKnxEOhCGv8C&printsec=frontcover&q=. Retrieved 2009-08-07.
- ^ "Textile exports to US slip 12% in H1". The Hindu Business Line. 2009-08-05. http://www.thehindubusinessline.com/2009/08/06/stories/2009080652301500.htm. Retrieved 2009-08-05.
