The readymade garments industry is still fundamental to the prospects of the Bangladesh economy, said a UNTACD report. “The RMG industry has been the major driver of the country’s economic development in recent decades and is still fundamental to the prospects of the Bangladesh economy,” said the World Investment Report 2014, which has been published yesterday globally. The industry is considered the “next stop” for developed-country TNCs that are moving sourcing away from China. Such opportunity is essential for development as Bangladesh needs to create jobs for its growing labour force, the report said. With the prediction of further growth in the industry and the willingness of developed-country firms to source from Bangladesh, the picture on the demand side seems promising, it added. According to the report, the sector needs to address constraints on the supply side – its poor infrastructure continues to deter investment in general and FDI in particular. While at the firm level, one issue concerns the need for better compliance with labour legislation as illustrated by several tragedies in the country’s garment industry. Besides strengthening such compliance, the industry needs to develop its capabilities, not only by consolidating strengths in basic garment production but also by diversifying into higher-value activities along the RMG value chain, the report mentioned. Currently, Bangladesh’s garment firms compete predominantly on price and capacity. The lack of sufficient skills remains a major constraint, and both domestic and foreign-invested firms needed to boost their efforts in this regard, it added. A recent UNCTAD study shows the dominance of basic and on-the-job training, which links directly to established career trajectories within firms. However, high labour turnover hampers skill development at the firm level.
