RMG sector posts 12.59pc rise in export earnings

[Homo Sapiens]

RMG sector posts 12.59pc rise in export earnings
SHARIF AHMED, DHAKA

This file photo shows an employee busy working at a RMG unit in the capital. Independent photo


Thanks to value added products, government policy support, capacity enhancement and completion of 90 per cent of the factory remediation work set by Accord and Alliance, the country's readymande garments (RMG) sector is continuing its positive trend in export earnings, say industry experts.


Bangladesh apparel exports to global markets have seen a 12.59 per cent rise to USD 28.50 billion in the first 10 months of the current fiscal year.

According to Export Promotion Bureau (EPB) provisional data, the RMG sector earned USD 28.49 billion in the in July-April period of the current financial year, up by 12.59 per cent from USD 25.30 billion during the same period of the previous fiscal year.

Of the total export earnings by the apparel sector, knitwear products earned USD 14.08 billion, which is 12.32 per cent higher than the USD 12.54 billion earned during the same period of FY2017-18.

Woven products earned USD 14.40 billion, up by 12.85 per cent from the earning of USD 12.76 billion during the same period of the previous fiscal year.

The specialised textile sector saw a 36 per cent growth to USD 125 million from USD 92 million, while home textile products saw a negative growth of 3.74 per cent to USD 723.60 million, down from USD 752.67 million.

Talking to The Independent, Siddiqur Rahman, former president of the Bangladesh Garment Manufacturers' and Exporters' Association (BGMEA), said the three months from December to March was the peak season for apparel shipments. So, the future prospect is even higher and brighter for garments shipment, he added.

“Our capacity has also increased, and we can produce any quantity of garments items as we have expanded our operations over the years” he said.

"But the work order flow is not so good. We are not getting enough price from buyers,” he addded.

The government announced a cash incentive to the non-traditional market back in 2010, which eventually boosted the two-digit export growth rate, he said.

Explaining the reason, Rahman said apparel-makers earlier did not want to go to those markets because of the difficulties involved and the time spent to enter a new market. But owing to the duty-free access and cash incentives, garments owners have started exploring new destinations and markets.

“China, the world’s largest apparel supplier, has started importing products from us because the Chinese government has allowed duty-free access to over 5,000 Bangladeshi products. This has eventually enhanced the export growth of the apparel sector,” he added.

In total, 40-50 crore people in China belong to the high-middle income group, said Rahman.

The inspection of Accord and Alliance has helped remediate garments factories and prompted factory owners to emphasise workplace safety, which eventually lift the country’s image in front of foreign buyers, he added.

Eighty green garment factories in operation are completely LEED-certified certified and 300 more are in the process of getting the certification. Among the top 10 green garment factories in the world, first seven are located in Bangladesh, said former BGMEA president.

However, Chattogram port needs to facilitate more in order to perform better, said the former BGMEA president.

“We've invested around USD 4 billion for ensuring workplace safety and occupational health,” he added.

Khondaker Golam Moazzem, research director of Centre for Policy Dialogue (CPD), told The Independent that the double-digit growth has been a positive sign for the apparel sector.

When asked about it, Centre for Policy Dialogue (CPD) research director Dr Khondaker Golam Moazzem told The Independent: “In the last four months, our exchange rate has devalued to 1 per cent—it helps exporters to get better prices for their products.”

Pointing out another reason, Moazzem said that port facilities have improved, especially loading and unloading of readymade garments (RMG) containers in the Chattogram port, and it has reduced the lead time as well.

It is indeed difficult to adjust the new cost arising from the new wage structure, irrespective of whether buyers would increase their prices or not, he observed.
http://www.theindependentbd.com/post/199318

 

[Homo Sapiens]

@bluesky Is 12.59% export growth in RMG and 10 percent growth in Remittance is not enough to power 8 percent GDP growth? You said, Bangladesh's growth is mainly dependent on RMG and Remittance. And SANEM guys also made their ''Doubt'' on assumption that, our export and remittance are not in line with claimed GDP growth. So what's the matter? Even 12.59% and 10% is not enough for 8 percent growth?

 

[Bengal71]

@bluesky Is 12.59% export growth in RMG and 10 percent growth in Remittance is not enough to power 8 percent GDP growth? You said, Bangladesh's growth is mainly dependent on RMG and Remittance. And SANEM guys also made their ''Doubt'' on assumption that, our export and remittance are not in line with claimed GDP growth. So what's the matter? Even 12.59% and 10% is not enough for 8 percent growth?

The growth is good to hear and I believe if the Trump tariff of 25% remains on Chinese garments, we are going to see exponential growth in garments export. But I am not happy that we have slow progress in other industries.

 

[bluesky]

@bluesky Is 12.59% export growth in RMG and 10 percent growth in Remittance is not enough to power 8 percent GDP growth? You said, Bangladesh's growth is mainly dependent on RMG and Remittance. And SANEM guys also made their ''Doubt'' on assumption that, our export and remittance are not in line with claimed GDP growth. So what's the matter? Even 12.59% and 10% is not enough for 8 percent growth?

I do not necessarily agree to SANEM viewpoint though I believe there has always been an inflated GDP figure. Now, why SANEM assumption may not be correct. A GDP growth is not really something that can be expressed by the growth only in export plus remittance. Many other industries, such as the backward industries like carton box, thread, plastic belt, polythene papers, very thin papers, etc. are also benefitted equally.

Note also the direct influence on the transportation of these goods via trucks or motor launch. Think also the purchasing power increase of all these workers involved and busy schedules in the eateries. so, in general, the Service Sector is benefitted. Service sector does not produce goods but produces service which is counted in terms of money. Export-earned money is circulated in many ways to different people that cause also the brisk selling of goods at the shops.

All these activities cumulatively act to produce a GDP bigger than the direct growth of exports and remittances. This is what I believe. So, SANEM viewpoint may not be correct.

 

[Homo Sapiens]

I do not necessarily agree to SANEM viewpoint though I believe there has always been an inflated GDP figure. Now, why SANEM assumption may not be correct. A GDP growth is not really something that can be expressed by the growth only in export plus remittance. Many other industries, such as the backward industries like carton box, thread, plastic belt, polythene papers, very thin papers, etc. are also benefitted equally.

Note also the direct influence on the transportation of these goods via trucks or motor launch. Think also the purchasing power increase of all these workers involved and busy schedules in the eateries. so, in general, the Service Sector is benefitted. Service sector does not produce goods but produces service which is counted in terms of money. Export-earned money is circulated in many ways to different people that cause also the brisk selling of goods at the shops.

All these activities cumulatively act to produce a GDP bigger than the direct growth of exports and remittances. This is what I believe. So, SANEM viewpoint may not be correct.

I agree with this post of your's except that our GDP figure is inflated. If anything, it is very much underestimated. We have a big undocumented economic sector, which may be as much as 70-80 percent size of documented economy. We are still calculating GDP based on 2005-2006 base year.

 

[bluesky]

I agree with this post of your's except that our GDP figure is inflated. If anything, it is very much underestimated. We have a big undocumented economic sector, which may be as much as 70-80 percent size of documented economy. We are still calculating GDP based on 2005-2006 base year.

No one can speak for sure that the GDP figure is inflated. However, it is a common tendency in the unsystematic poor nations to provide false figures. It is to look good not only to the world but also to the lending agencies. Lending agencies do not object/care because they also want to loan their money and get some profits out of it as well as credibility.

The Base Year is not a factor. The main influencing factor is downsizing the rate of inflation. The real GDP growth equals, (nominal GDP growth in % - the rate of inflation in %). It is quite easy for a national govt to manipulate with the rate of inflation. If the real inflation rate, for example, is 8% and the govt bodies declare it as 6%, the real GDP growth can be shown as 2 percentage point higher than the actual.

This is how the national govts of many poor countries manipulate data to prove their performance. However, I am not in a position to say for sure that it is really happening in BD as well.

 

[Homo Sapiens]

No one can speak for sure that the GDP figure is inflated. However, it is a common tendency in the unsystematic poor nations to provide false figures. It is to look good not only to the world but also to the lending agencies. Lending agencies do not object/care because they also want to loan their money and get some profits out of it as well as credibility.

The Base Year is not a factor. The main influencing factor is downsizing the rate of inflation. The real GDP growth equals, (nominal GDP growth in % - the rate of inflation in %). It is quite easy for a national govt to manipulate with the rate of inflation. If the real inflation rate, for example, is 8% and the govt bodies declare it as 6%, the real GDP growth can be shown as 2 percentage point higher than the actual.

This is how the national govts of many poor countries manipulate data to prove their performance. However, I am not in a position to say for sure that it is really happening in BD as well.

Inflation rate is not something which govt. can easily manipulate and nobody will have any clue. CPD and various other organizations as well as consumers associations keep a close eye on inflation. For both food and non food inflation. Global institution like IMF, World Bank also monitor inflation of countries. I have not seen any of them ever raising any doubt about inflation rate or indicating about Govt. manipulating inflation data in BD. SANEM talked about export, remittance performance and Banking sector, not inflation manipulation for their 'Doubt'

 

[bluesky]

Inflation rate is not something which govt. can easily manipulate and nobody will have any clue. CPD and various other organizations as well as consumers associations keep a close eye on inflation. For both food and non food inflation. Global institution like IMF, World Bank also monitor inflation of countries. I have not seen any of them ever raising any doubt about inflation rate or indicating about Govt. manipulating inflation data in BD. SANEM talked about export, remittance performance and Banking sector, not inflation manipulation for their 'Doubt'

Is it necessary to stick to what exactly SANEM said? I have my own opinion that I have stated after analyzing the information I have. SANEM has its own way of analyzing and another person may have another way. SANEM analysis is based solely on export volume.

It did not say about the activities in the backward industries, such as twisting, fabric production, washing, printing, thread making, and many others. SANEM relied on only the export figure and not on many other related activities. To me, SANEM report is little faulty.

I believe what I said in my previous post is correct. Otherwise, the high growth would have been reflected in the people's living standard.

 

[Homo Sapiens]

I believe what I said in my previous post is correct. Otherwise, the high growth would have been reflected in the people's living standard.

How you came into conclusion that high growth is not reflected in people's living standard? Poverty rate down from 31.5 percent in 2010 to 21.8 percent in 2018. According to New York based research farm Wealth-X, Bangladesh has highest growth rate in the world in Ultra High Net Worth(UHNW) individuals. These individuals are the person whose net worth is more than 30 million dollar.
Rich in Bangladesh rising faster than anywhere
https://www.thedailystar.net/online...-population-country-bangladesh-report-1632385

Forget about these statistics. Even in naked eyes, people's lifestyle is different then what was 10 years ago. More people are now living in brick house. In the last decade, household durable goods sale exploded. Internet connection, electricity connection, smart phone ownership skyrocketed. People's diet now constitute more animal protein. Check reports about it. Even people's get up changed a lot in last few years. You will find very few people going outside wearing Lungi in urban areas now a days. More people are now dressing smartly.

 

[bluesky]

According to New York based research farm Wealth-X, Bangladesh has highest growth rate in the world in Ultra High Net Worth(UHNW) individuals. These individuals are the person whose net worth is more than 30 million dollar.
Rich in Bangladesh rising faster than anywhere
https://www.thedailystar.net/online...-population-country-bangladesh-report-1632385

Rich people getting richer does not mean normal people's living standard is getting higher. It will happen only after heavy industrialization. So, many people, if not most, now live in a miserable condition. This is how the disparity is widening. Introduce a taxation system that causes the super-rich like you to invest in businesses, industries and the stock market that will cause poor people like me to get a source of earning which in effect will raise the standard of living of the population.

But, you are talking here about a few rich to prove that BD economy is growing and you are not seeing the larger picture.

 

[Bengal71]

Rich people getting richer does not mean normal people's living standard is getting higher. It will happen only after heavy industrialization. So, many people, if not most, now live in a miserable condition. This is how the disparity is widening. Introduce a taxation system that causes the super-rich like you to invest in businesses, industries and the stock market that will cause poor people like me to get a source of earning which in effect will raise the standard of living of the population.

But, you are talking here about a few rich to prove that BD economy is growing and you are not seeing the larger picture.

General people's living standard has improved a lot and it's quite visible in BD. I live in Australia for 18 years and go to BD at least once a year, every time I see changes and improvements. We don't always have to rely on data only, many things are just visible.

 

[TopCat]

General people's living standard has improved a lot and it's quite visible in BD. I live in Australia for 18 years and go to BD at least once a year, every time I see changes and improvements. We don't always have to rely on data only, many things are just visible.

My father is a 78 years old man. He said in his entire life he never thought of the changes he saw in the last 20 years or so. Actually the elder generation never expected that much improvement.

 

[Bengal71]

My father is a 78 years old man. He said in his entire life he never thought of the changes he saw in the last 20 years or so. Actually the elder generation never expected that much improvement.

I go to BD from Australia and I have relatively high income in Australia. When I go to BD, I see with amazement how people spend. It didn't come from nowhere.

 

[BitHeroBD]

I go to BD from Australia and I have relatively high income in Australia. When I go to BD, I see with amazement how people spend. It didn't come from nowhere.

You are spot on. People spend a lot on clothes, hanging out now. The establishment of thousands of new restaurants is mind boggling to me. Also now middle class people are going to vacation abroad.

 

[bluesky]

General people's living standard has improved a lot and it's quite visible in BD. I live in Australia for 18 years and go to BD at least once a year, every time I see changes and improvements. We don't always have to rely on data only, many things are just visible.

You are right. However, the standard of living remains a minimum survival, only because the country is not industrializing and people remain unemployed or underemployed. Our vast farmland is giving a lot of employment, disguised or what. A good living standard cannot be built without industrialization in BD.

Australia is different. It is a very large country with mines to explore, timbers and cattle farming among many others.