After an interval of almost three months the readymade garment (RMG) sector of the country has begun to come alive with work orders increasing. The sector began to see declining work orders last September putting apparel exporters in confusion regarding whether they could survive the global crisis.
It was completely uncertain when the country’s apparel sector would get a boost again. It has not only raised concern among the people involved in the sector but has also raised tension among the government higher ups. Naturally the government should have been under pressure due to less work order in the sector as it depends greatly on the sector for its foreign exchange earnings.
The sector contributes over $22 to $25 billion dollar to the Bangladesh Bank’s dollar reserve. The RMG sector contributes around 83 percent of all export earnings for Bangladesh. The recent decline in work orders must have resulted in worries in relevant government circles. Quite naturally the rise in work orders has also come as a relief to the government with its dwindling foreign currency reserves.
The decline in order began in last September when the sector saw 7.52 per cent negative export earnings. The month of August achieved only 3.27 per cent growth. Since September the RMG sector has experienced deteriorating situation as the work orders began to come down considerably. International Apparel Forum (IAF) told this newspaper: “Although the exporters are now navigating troubled waters because of the order shortage, I believe, it will no longer be the case in the coming days.”
However, the month of November is unlikely to see any big change in the sector. Moreover, gas and energy crises have thrown a big challenge for the sector. Exporters will have to face problems because of gas shortage, as when work orders will begin to come pouring in the gas crisis is unlikely to end and many of the exporters might miss the shipment deadline.
We think the government should take the issue into consideration before it is too late. And if it happens, increase in work orders will ultimately yield no good result.
Meanwhile, local denim has managed to maintain its top position in the US market which has grown by 42 per cent to $739 million in the first nine months of this year. It was $520.16 million during the corresponding period of the last year. In 2020 Bangladesh surpassed China, the largest garment exporter globally, in the US market in this sector.
Now, if we take it for granted that Bangladesh is going to regain its earlier position in the apparel sector and thinking hypothetically that there will be no gas and energy crises should the country depend largely on the RMG sector? Bangladesh obviously needs to diversify its products in the international market otherwise it might not survive the onslaught of the kind we are seeing today in the days to come. Not that everything will be set alright at one go. Crisis keeps coming one after another. If the government is not discreet and prudent enough to have an insight into the approaching crisis it may not be able to face it in future.
Several years back the government formulated a new export policy where as part of diversification of products 15 export items were planned to take to the international market to enhance competitiveness and strengthen the country’s economy.
Denim was one of them and now it has already grabbed the US market surpassing China. If the other products like Active Pharmaceutical Ingredients (API), light engineering products (motor cycle, battery), cashew nut (raw and processed), live and processed crabs and so on and so forth can be marketed overseas properly we don’t have to depend solely on the RMG sector. It will also protect our economy.