Back to Clip Index

Bangladesh should remove the obstacles to improving its' infrastructure as well as create an enabling environment for successfully facing the challenges of Multi-Fibre Arrangement (MFA) phase-out. Speakers at a dialogue in city Thursday called for concerted efforts to develop the country's $ 5.2 billion readymade garment (RMG) sector. The Centre for Policy Dialogue (CPD), the Citibank NA and the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) jointly arranged the dialogue titled 'Surviving in a quota-free world: Will Bangladesh make it? Research director of CPD Mustafizur Rahman presented the keynote paper at the dialogue. Executive director of CPD Debapriya Bhattacharya chaired the discussion meet. Making a very short speech, US Ambassador in Bangladesh Harry K Thomas Jr said Bangladesh has the capacity to withstand the quota-free regime beginning on January 1, 2005. "But the country should remove the problems of poor infrastructure, power crisis and corruption," Thomas said. Speaking as the chief guest at the function, Commerce Minister Amir Khosru Mahmud Chowdhury said the government does not see any necessity of fresh policy support for the survival of RMG sector. "Rather, we feel the necessity of playing a more facilitating role from the government and we have already taken some steps in this connection," the commerce minister said. According to Amir Khosru, the steps include reduction of port charge and interest rate and continued efforts to broaden the export market and to establish a central bonded warehouse. Asked whether the country's working women workforce of RMG sector will face unemployment in the quota-free regime, the commerce minister replied in the negative. "I don't see any such problem when our RMG sec-tor shows 18 per cent growth in its sales volume in the recent period," Khosru asserted. The speakers identified chronic problems in Chittagong port, telecommunications, power and banking sectors as major impediments and said solutions of these problems will be much helpful in with standing the post-MFA challenges. They said if the systems losses incurred due to these unwanted problems are removed, the RMG sector will continue to flourish and there will be no problem in the post-MFA era. CPD Research Director Mustafizur Rahman in his keynote presentation has suggested identifying the items that are demonstrating competitive strength creating a textile-RMG technology upgradation fund in line with India and investment in skill development. He also said Bangladesh's objective should be to retain the current share of 2.5 per cent in the US market during the first three years of phase-out (2005-2008). The market share then should be enhanced to three per cent and above, he added. The study also suggested a contingency plan to deal with the possible pessimistic scenario that might emerge in the post-MFA situation. "A safety net for the retrenched workers and a contingency fund could be other strategies to cope with the emerging challenges," Mustafiz added. Commenting on the possible challenge from China in the post MFA period, the CPD expert said China may account for up to 50 per cent of global export of apparels and textiles, from the current 20 per cent since she has the ability to make almost any type of textile and apparel products at any product level at competitive prices. China's share in the US baby garment market rose from three per cent in 2001 to 27 per cent in 2002 after quota was lifted in that market segment, Mustafiz said. This was a 306 per cent rise for China, while imports from Bangladesh fell by 16 per cent in the US market, he added. "China has a fully integrated cotton, textiles and garment industry, a deep pool of labour force and a system that allows manipulations with regard to cost and exchange rate," the dialogue was told. President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Anisul Haq placed a set of recommendations before the government to face the post-MFA challenge which included establishment of central bonded ware-house, setting up of dyeing, printing and finishing factories, change in monetary policy to facilitate credit for RMG exporters and strong lobbying for relaxation of rules of origin. The other recommendations are development of transport, implementation of New Mooring Terminal in' Chittagong, capacity building of Chittagong port, continuing the lobbying for duty-free and quota-free access of Bangladesh RMG to the US market and turning the diplomatic missions into export promotion centres. Citibank NA CEO Mamun Rashid said: "Removal of quota does not mean that we will lose our market. However, it offers higher competition in a more free market." "We need concerted efforts to understand our challenge better so that we may turn the dismal situation into an opportunity," Mamun added. Debapriya Bhattacharya pressed on intensifying more coordinated efforts towards gaining efficient and effective corporate governance, backward linkage, enhancing quality control and reduction in lead-time and manufacturing costs in the RMG and other sectors. The dialogue was also addressed, among others, by Monjurul Huq of BKMEA, Managing Director of Mercantile Bank Ltd Taheruddin Ahmed, Chairman of Bangladesh Shilpa Bank Abu Ahmed, former foreign minister Anisul Islam Mahmud and GM Quader MP.