RMG export set to continue negative growth in October

[bluesky]

RMG export set to continue negative growth in October

Earlier in September, the shipment of the major exporting items posted a negative growth of 7.52%, dipping for the first time after 13 months since August last year

www.dhakatribune.com

RMG export set to continue negative growth in October​

Earlier in September, the shipment of the major exporting items posted a negative growth of 7.52%, dipping for the first time after 13 months since August last year

Mahmud Hossain Opu/Dhaka Tribune
Saddam Hossain
October 26, 2022 12:50 AM

The readymade garment (RMG) export of the country is set to post further negative growth in October like the previous month September, as demand declines in the West due to high inflation.
According to the NBR data compiled by the Bangladesh Garment Manufacturers and Exporters Association, the country's apparel exports experienced a downturn in the first 20 days of October by 18.67% to $1.77 billion, lower than $2.17 billion in the mentioned period of 2021.

Earlier in September, the shipment of the major exporting items posted a negative growth of 7.52%, dipping for the first time after 13 months since August last year.


According to the Export Promotion Bureau (EPB), Bangladesh earned $3.16 billion in September of 2022, down from $3.41 billion in the same period of the last year.
Apparel manufacturers said that the export witnessed negative growth due to the war-related crises, global economic turmoil, and record inflation affecting retail businesses.
A number of global brands were suffering from a decline in sales and unsold stocks, compelling many to halt current orders and production at the manufacturers' end.


Moreover, they also predicted a few months ago, as orders are going down, the growth would be negative from September, and it has happened.
Domestic issues like power rationing, load shedding and severe gas crises also impacted the sector.
Talking to Dhaka Tribune, Mohiuddin Rubel, director of the BGMEA said that they already shared early indications of growth slowdown from September onwards, which is now reflected in export data for September.


“This downtrend may continue for the coming months as the global retail market is disrupted by many challenges and then anticipated recession in the global economy, which is halting retail sales and demand for clothing,” he added.
He also warned that if the ongoing Russia-Ukraine war prolongs, the global economic situation will further deteriorate.

“The normalcy in the global economy heavily relies on the war issue. If the war ends fast, then the situation may revive within four to five months,” he added.

Regarding the ongoing energy crisis, he said that Bangladesh should try to be self-reliant in energy by exploring gas and addressing renewable energy sources in massive aspects.

“Factories can use their rooftop to set up the solar panels,” he added.
According to the manufacturers, the apparel sector of the country is fearing another drop in orders as rising fuel prices and inflation have cut the consumers' purchasing power in European countries and decreased the demand for clothing products.
The inflation rate in the European Union (EU), the largest destination of the country's apparel items, reached 9.9% in September this year.

Moreover, the European countries will face further catastrophes as Russia reduces gas supply and leaks surface on two Nord Stream pipelines in the Baltic Sea, which may impact the inflation rate further in the upcoming winter and consumers may be forced to cut their shopping expenses during Christmas.

According to various projections, European shoppers are likely to reduce their Christmas purchases by up to 22% which will disallow the top brands, importers of Bangladeshi apparel products, to clear their whole stock.

Industry insiders said that the situation may not change this year and if the brands can clear most of their stocks during Christmas, only then they will place more orders.
However, they also said that the sector needs a few more months, at least till March of 2023, to recover from the losses.

In this situation, manufacturers repeatedly urged the government to ensure uninterrupted gas and electricity supply so that they can meet the demands of clients on time.

 

[Bilal9]

I don't believe the doomsayers.

Bangladesh mostly exports low tier affordable items found at Walmart, Target and the like.

I don't know what the EU and UK supershop/ retail equivalents are.

22% inflation reduction or not, these low priced items (knit underclothes, foundational apparel items like t-shirts, home fashions like bedsheets, household towels etc.) are relatively immune from inflationary pressures.

Bangladesh is not producing and exporting aspirational items like $500 leather jackets or $400 Air Jordan Basketball shoes. for the most part.

Although some ARE MADE and sold locally.

 

[BananaRepublicUK]

I don't believe the doomsayers.

Bangladesh mostly exports low tier affordable items found at Walmart, Target and the like.

I don't know what the EU and UK equivalents are.

22% inflation reduction or not, these low priced items (knit underclothes, foundational apparel items like t-shirts, home fashions like bedsheets, household towels etc.) are relatively immune from inflationary pressures.

Bangladesh is not producing and exporting aspirational items like $500 leather jackets or $400 Air Jordan Basketball shoes. for the most part.

Although some ARE MADE and sold locally.

Same idiots predicted gloom during covid and before that losing GSP privilege in USA.

Both times BD smash the numbers.

 

[bluesky]

Vietnamese exports of garments are rising. Is it possible that Vietnam is taking away the market from Bangladesh? If so, the authorities should think about how to overtake the aggressive Vietnamese exports.

Vietnam textile and apparel exports hit record high in first half

Southeast Asian country's trade pacts contribute to 23% on-year increase

asia.nikkei.com

 

[Bilal9]

Vietnamese exports of garments are rising. Is it possible that Vietnam is taking away the market from Bangladesh? If so, the authorities should think about how to overtake the aggressive Vietnamese exports.

Vietnam textile and apparel exports hit record high in first half

Southeast Asian country's trade pacts contribute to 23% on-year increase

asia.nikkei.com

Vietnamese garments and shoe labor costs are way higher than Bangladesh, I'd say twice as high.

This is from 2015/16 and still true, though China and India wages (especially China) has moved up quite a bit. China avg. salaries are on avg. $6.50 an hour for high class garments factories while Vietnam is $3 an hour.

Side-by-Side: Top 4 Asian Countries for Manufacturing Garments

Where should you source your garments? Find out the pros and cons for garment importers of each of these top 4 Asian countries for manufacturing garments!

www.intouch-quality.com

However Vietnam's efficiency is also a bit higher compared to Bangladesh.

Their workers are educated and intelligent, while ours are mostly uneducated women hired at low salaries.

Vietnam concluded FTA's with EU countries which helps their exports over ours.

Plus they can easily source inputs from the industrial juggernaut next door which is China. They don't need backward integration like spinning, weaving etc. which is done in Chiina.

For us, back-to-back LC is needed which introduces a 20~30 day sourcing delay from China. However a lot of inputs are increasingly sourced locally in Bangladesh especially textiles. We have a much larger textile backward integration scenario compared to Vietnam.

 

[Bilal9]

BTW to understand why RMG prospered in China/Bangladesh and not in India, here is a story on the reason Indian inefficiency failed to have their economy take off while China went gangbusters.

Read the story and understand urbanization trends are an indicator.

Bangladesh urbanization rate and amount is slightly higher than that of India now and increasing a lot faster..... make your own conclusions.

Bangladesh - urbanization 2023 | Statista

The share of urban population in Bangladesh increased by 0.8 percentage points (+2.01 percent) in 2023.

www.statista.com

----------------------------------------------------------------------------------------------------

Politics, Productivity & Population: Why The Chinese Economy Flew and India's Just Grew​

Garth Friesen
Contributor
New! Follow this author to stay notified about their latest stories. Got it!
Follow
Mar 21, 2019,08:00am EDT

Construction of the new district of Kangbashi in Ordos, Inner Mongolia, China. Photographer: Nelson... [+]

2011 BLOOMBERG FINANCE L.P.

The two countries have roughly the same population, similar average unemployment rates and current GDP growth rates that are among the highest in the world. Yet China’s economy is almost five times larger than India’s. The GDP per capita for China and India in 1985 was approximately $293 per person. According to 2017 data from the World Bank, China’s GDP per capita has ballooned to $8,827, and India’s has climbed to $1,942. Both countries have made tremendous progress, but the growth in China has been miraculous. Why such a significant difference? How did China outpace India to become the second largest economy in the world? The answer lies in the differences between politics, productivity and population trends.

China's GDP per capita growth has outpaced India's
WORLD BANK, III CAPITAL MANAGEMENT

Politics
The Chinese Communist Party (CCP) governs the country with few barriers. When the government decides on a course of action, few obstacles stand in its way. For example, China spent more than a decade building the Three Gorges Dam, the world’s largest hydropower project. The massive undertaking displaced more than 1.2 million people and flooded 13 cities, 140 towns and 1,350 villages. The dam, despite its enormous social and environmental cost, provides China with a source of clean energy and brought thousands of jobs to the Chinese interior. When it comes to rapid development in such scale, an authoritarian political system is a definite advantage.

India is a democracy. It has regional parliaments and a federal parliament with many assemblies. This system is all-inclusive, but a nightmare for development. It can take decades to make a decision. For example, it took 16 years for the Indian parliament to pass a tax reform bill (2016). A project like damming the Yangtze River could not happen in India. Plagued by corruption at all levels, the divided political landscape would kill the project before it began. Politics prevent spending on infrastructure. Estimates suggest that the lack of adequate infrastructure investment reduces India's annual GDP growth by 1-2 percent. Physical infrastructure, such as electricity, railways, roads, ports and airports has not kept pace with the growth of the Indian economy. India has underinvested in these massive projects and the consequences have curtailed economic growth compared to China; some argue China has overinvested. China’s willingness and ability to build out its infrastructure, via a centrally controlled political system that is not afraid to accumulate debt, has helped propel China ahead of India.

Productivity
Higher productivity growth in China relative to India can help explain the increase in the GDP per capita differential between the two countries. Productivity measures how efficiently production inputs, such as labor and capital, are used in an economy to produce a given level of output. Productivity growth is a byproduct of infrastructure investments mentioned above. The hydroelectric power created from the Three Gorges Dam provides low cost, uninterrupted power to hundreds of Chinese factories. The efficient rail and road networks allow speedy transportation to distribution centers and ports. By comparison, India is far behind. In the annual World Economic Forum Global Competitiveness Report, India lags China in every infrastructure category. The relative growth in productivity is another factor behind the meteoric rise in GDP per capita of China.

Population
Another component of China’s ascent is a massive urbanization. In 1969, 17.5% of the population in China lived in cities, compared to 19.5% in India. Today, the urbanization rate is 58% in China and roughly 37% in India. In both countries, tens of millions of people have left the agricultural sector and moved to cities in search of higher wages — it just happened at a much faster pace in China. A worker in a factory is more “productive” than a farmer, meaning that there is a higher economic value to manufactured goods than farm goods. The desire to relocate the Chinese population to focus on manufacturing required huge infrastructure spending. India’s strategic focus on the development of its service sector did not necessitate such a large agrarian-to-urban migration.

Data suggests a strong link between GDP per capita growth and the rate of urbanization.
WORLD BANK, III CAPITAL MANAGEMENT

A political system that bypasses the laws and bureaucracy associated with democracy, a strategy to invest in infrastructure to develop a manufacturing juggernaut despite the social and environmental cost, along with policies to mass-urbanize the population, have compounded over the last several decades to propel China ahead of India in GDP per capita growth. Fast forward to today, and there is considerable debate whether the policies that lifted China so far ahead of its emerging market peers are sustainable. China’s private sector debt has more than doubled as a percentage of GDP; India’s is unchanged. Eventually, further investment in roads, bridges and airports will hurt productivity rather than add to it.
Indeed, China is shifting its focus to the service sector and away from its reliance on exports and manufacturing, while India is attempting to improve its infrastructure to promote growth outside of services. Both nations have prospered. Both countries are moving up the GDP per capita ladder. China’s unique combination of politics, people and strategy help explain how China skipped a few steps, but skipping steps on a ladder can be dangerous. We will have to wait another few decades to appreciate the consequences.

 

[bluesky]

Plus they can easily source inputs from the industrial juggernaut next door which is China. They don't need backward integration like spinning, weaving etc. which is done in Chiina.

For us, back-to-back LC is needed which introduces a 20~30 day sourcing delay from China. However a lot of inputs are increasingly sourced locally in Bangladesh especially textiles. We have a much larger textile backward integration scenario compared to Vietnam.

It seems Bd will have a long way to go to become efficient in the production of garments while its competitor Vietnam is already ahead of BD.

 

[BananaRepublicUK]

It seems Bd will have a long way to go to become efficient in the production of garments while its competitor Vietnam is already ahead of BD.

No! Mistri!

As Bilal explained, Vietnam’s value add in garments is significantly lower than ours.

That’s because Vietnam doesn’t have the local sourcing that we do.

In summary, we make a lot more money from garments than Vietnam because we source stuff locally.

 

[renhai]

BTW to understand why RMG prospered in China/Bangladesh and not in India, here is a story on the reason Indian inefficiency failed to have their economy take off while China went gangbusters.

Read the story and understand urbanization trends are an indicator.

Bangladesh urbanization rate and amount is slightly higher than that of India now and increasing a lot faster..... make your own conclusions.

Bangladesh - urbanization 2023 | Statista

The share of urban population in Bangladesh increased by 0.8 percentage points (+2.01 percent) in 2023.

www.statista.com

----------------------------------------------------------------------------------------------------

Politics, Productivity & Population: Why The Chinese Economy Flew and India's Just Grew​

Garth Friesen
Contributor
New! Follow this author to stay notified about their latest stories. Got it!
Follow
Mar 21, 2019,08:00am EDT

Construction of the new district of Kangbashi in Ordos, Inner Mongolia, China. Photographer: Nelson... [+]

2011 BLOOMBERG FINANCE L.P.

The two countries have roughly the same population, similar average unemployment rates and current GDP growth rates that are among the highest in the world. Yet China’s economy is almost five times larger than India’s. The GDP per capita for China and India in 1985 was approximately $293 per person. According to 2017 data from the World Bank, China’s GDP per capita has ballooned to $8,827, and India’s has climbed to $1,942. Both countries have made tremendous progress, but the growth in China has been miraculous. Why such a significant difference? How did China outpace India to become the second largest economy in the world? The answer lies in the differences between politics, productivity and population trends.

China's GDP per capita growth has outpaced India's
WORLD BANK, III CAPITAL MANAGEMENT

Politics
The Chinese Communist Party (CCP) governs the country with few barriers. When the government decides on a course of action, few obstacles stand in its way. For example, China spent more than a decade building the Three Gorges Dam, the world’s largest hydropower project. The massive undertaking displaced more than 1.2 million people and flooded 13 cities, 140 towns and 1,350 villages. The dam, despite its enormous social and environmental cost, provides China with a source of clean energy and brought thousands of jobs to the Chinese interior. When it comes to rapid development in such scale, an authoritarian political system is a definite advantage.

India is a democracy. It has regional parliaments and a federal parliament with many assemblies. This system is all-inclusive, but a nightmare for development. It can take decades to make a decision. For example, it took 16 years for the Indian parliament to pass a tax reform bill (2016). A project like damming the Yangtze River could not happen in India. Plagued by corruption at all levels, the divided political landscape would kill the project before it began. Politics prevent spending on infrastructure. Estimates suggest that the lack of adequate infrastructure investment reduces India's annual GDP growth by 1-2 percent. Physical infrastructure, such as electricity, railways, roads, ports and airports has not kept pace with the growth of the Indian economy. India has underinvested in these massive projects and the consequences have curtailed economic growth compared to China; some argue China has overinvested. China’s willingness and ability to build out its infrastructure, via a centrally controlled political system that is not afraid to accumulate debt, has helped propel China ahead of India.

Productivity
Higher productivity growth in China relative to India can help explain the increase in the GDP per capita differential between the two countries. Productivity measures how efficiently production inputs, such as labor and capital, are used in an economy to produce a given level of output. Productivity growth is a byproduct of infrastructure investments mentioned above. The hydroelectric power created from the Three Gorges Dam provides low cost, uninterrupted power to hundreds of Chinese factories. The efficient rail and road networks allow speedy transportation to distribution centers and ports. By comparison, India is far behind. In the annual World Economic Forum Global Competitiveness Report, India lags China in every infrastructure category. The relative growth in productivity is another factor behind the meteoric rise in GDP per capita of China.

Population
Another component of China’s ascent is a massive urbanization. In 1969, 17.5% of the population in China lived in cities, compared to 19.5% in India. Today, the urbanization rate is 58% in China and roughly 37% in India. In both countries, tens of millions of people have left the agricultural sector and moved to cities in search of higher wages — it just happened at a much faster pace in China. A worker in a factory is more “productive” than a farmer, meaning that there is a higher economic value to manufactured goods than farm goods. The desire to relocate the Chinese population to focus on manufacturing required huge infrastructure spending. India’s strategic focus on the development of its service sector did not necessitate such a large agrarian-to-urban migration.

Data suggests a strong link between GDP per capita growth and the rate of urbanization.
WORLD BANK, III CAPITAL MANAGEMENT

A political system that bypasses the laws and bureaucracy associated with democracy, a strategy to invest in infrastructure to develop a manufacturing juggernaut despite the social and environmental cost, along with policies to mass-urbanize the population, have compounded over the last several decades to propel China ahead of India in GDP per capita growth. Fast forward to today, and there is considerable debate whether the policies that lifted China so far ahead of its emerging market peers are sustainable. China’s private sector debt has more than doubled as a percentage of GDP; India’s is unchanged. Eventually, further investment in roads, bridges and airports will hurt productivity rather than add to it.
Indeed, China is shifting its focus to the service sector and away from its reliance on exports and manufacturing, while India is attempting to improve its infrastructure to promote growth outside of services. Both nations have prospered. Both countries are moving up the GDP per capita ladder. China’s unique combination of politics, people and strategy help explain how China skipped a few steps, but skipping steps on a ladder can be dangerous. We will have to wait another few decades to appreciate the consequences.

I guess. the nutritional level of Indians is the same as that of Gambia. It is also because of democracy.

India never admits its mistakes. never corrected. it prefers to make countless excuses for its own failures.

India was far ahead of China in 1947.

India has more steel production.
India has more railways.
India has more companies and factories.
India has more gold reserves.
India has never even been destroyed by a large-scale war.

Keep going this way. India should be stronger than China. isn't it? ...... oh, sorry. It is not.

China and India have almost the same population. but in the economy. military. industry. agriculture. etc. there are huge gaps between the two countries in almost all areas.

so. what secrets does history hide from us? just because China builds a dam and "people make huge sacrifices". so China is far ahead of India? is India backward because of its democracy? the Indian people have not make huge sacrifices??

Would you believe it???

This is the first time I know. "Democracy" is a derogatory term in India.

 

[Black Tornado]

I guess. the nutritional level of Indians is the same as that of Gambia. It is also because of democracy.

View attachment 889769

India never admits its mistakes. never corrected. it prefers to make countless excuses for its own failures.

India was far ahead of China in 1947.

India has more steel production.
India has more railways.
India has more companies and factories.
India has more gold reserves.
India has never even been destroyed by a large-scale war.

Keep going this way. India should be stronger than China. isn't it? ...... oh, sorry. It is not.

China and India have almost the same population. but in the economy. military. industry. agriculture. etc. there are huge gaps between the two countries in almost all areas.

so. what secrets does history hide from us? just because China builds a dam and "people make huge sacrifices". so China is far ahead of India? is India backward because of its democracy?

Would you believe it???

This is the first time I know. "Democracy" is a derogatory term in India.

Thats calories consumed not nutrition

 

[renhai]

Thats calories consumed not nutrition

ok

 

[Bilal9]

I guess. the nutritional level of Indians is the same as that of Gambia. It is also because of democracy.

View attachment 889769

India never admits its mistakes. never corrected. it prefers to make countless excuses for its own failures.

India was far ahead of China in 1947.

India has more steel production.
India has more railways.
India has more companies and factories.
India has more gold reserves.
India has never even been destroyed by a large-scale war.

Keep going this way. India should be stronger than China. isn't it? ...... oh, sorry. It is not.

China and India have almost the same population. but in the economy. military. industry. agriculture. etc. there are huge gaps between the two countries in almost all areas.

so. what secrets does history hide from us? just because China builds a dam and "people make huge sacrifices". so China is far ahead of India? is India backward because of its democracy? the Indian people have not make huge sacrifices??

Would you believe it???

This is the first time I know. "Democracy" is a derogatory term in India.

I am sure younger and nationalistic Indians know what their structural failures are for India.

But under Modi's proud "new India" they will never admit it.

Modi has promised to take them to India's new promised future. To most of us outside India (and to a silent majority inside it), that promise is as hollow as anything. This hollowness is exemplified in cooked up economic numbers, 500 foot tall statues, showcase projects like moon and mars missions, when half of India goes to relieve themselves on railroad tracks and has nutrition levels at the lowest globally.

But hollow or not - that promise is all some Nationalistic Fascist Indians have. India is an unfortunate failed experiment as is visible to any astute observer.

It will never excel at anything, it will never be (as nationalistic Indians lovingly call it) "Mahaan" (great). The inbuilt structural/ethnic failings and bureaucratic hurdles are too many, even compared to a small country like Bangladesh.

It will simply go back to grow at 2~3% (which was the prediction in the 70's by an Indian economist himself) which was termed the "Hindu rate of growth".

 

[Bilal9]

It seems Bd will have a long way to go to become efficient in the production of garments while its competitor Vietnam is already ahead of BD.

Vietnamese are businesspeople at another level, they are benefitting by having Chinese suppliers supply their economic inputs.

Some would see it as an economic vulnerability - but I do not.

 

[bluesky]

I am sure younger and nationalistic Indians know what their structural failures are for India.

But under Modi's proud "new India" they will never admit it.

Modi has promised to take them to India's new promised future. To most of us outside India (and to a silent majority inside it), that promise is as hollow as anything. This hollowness is exemplified in cooked up economic numbers, 500 foot tall statues, showcase projects like moon and mars missions, when half of India goes to relieve themselves on railroad tracks and has nutrition levels at the lowest globally.

But hollow or not - that promise is all some Nationalistic Fascist Indians have. India is an unfortunate failed experiment as is visible to any astute observer.

It will never excel at anything, it will never be (as nationalistic Indians lovingly call it) "Mahaan" (great). The inbuilt structural/ethnic failings and bureaucratic hurdles are too many, even compared to a small country like Bangladesh.

It will simply go back to grow at 2~3% (which was the prediction in the 70's by an Indian economist himself) which was termed the "Hindu rate of growth".

With all its shortfalls, India is an industrially and technologically developing country and is not rich yet. Its people are patriots.

Bangladesh remains an industrially and technologically underdeveloped country without any industrial base. Our people are self-centered and are not patriots.

When India receives billions of dollars of FDI each year, BD has received only a tiny $4 billion so far after 1971. We have to find out the reasons why FDI guys avoid BD shores.

We should not bring out Indian deficiencies just to feel good. India is not our problem, BD is. Build your own Teesta and feel good. India built its Farakka and 54 other barrages across our common rivers.

BD cannot even build its coastal earthen barriers to save from the rising sea. Its highly talented engineers build embankments that wash away in the next season.

 

[bluesky]

BD cannot even build its coastal earthen barriers to save from the rising sea. Its highly talented engineers build an embankment that washes away in the next season.

BD civil engineers must know about a very important subject, named "Soil Mechanics". Without knowing it thoroughly, they build earthen dikes that do not last and roads are broken in a few months.

I wonder if they know and practice CBR (California Bearing Ratio) tests in BD before designing and constructing an important road.

Since our elite engineers do not know about soil engineering, the govt has to subcontract Chinese and Korean companies to do the bridge foundation works.

Soil mechanics involve also how to analyze soil boring data acquired after the Standard Penetration Tests.

Lack of knowledge of soil mechanics or its lack of application makes our country dependent upon foreign companies. India does not and its own engineers design and build all the important structures.