The Covid-19 pandemic has left the Bangladesh economy in tatters, and nowhere was this more apparent than the country’s RMG sector. With $3 billion in cancelled orders, the RMG sector was left reeling in the early months of the pandemic.
While the last few months have seen notable recovery, it comes as no surprise then that Vietnam, which has slowly but surely been causing disruption in the RMG landscape, has surpassed Bangladesh in total exports for the first six months of 2020, earning over $13bn in comparison to Bangladesh’s total of just under $12bn.
Despite both countries showing a decline in earnings, it is clear to see that Vietnam, which was much better prepared to deal with the effects of the coronavirus, has fared much better and minimized the damage.
For Bangladesh, however, this should serve as a wake-up call; Bangladesh enjoys numerous competitive advantages in RMG that has allowed it to become the powerhouse that it is in the global RMG business, but that is now being threatened.
All eyes will now be on the BGMEA, and how it navigates through this slump in the sector, and steer it back towards the heights that it was enjoying before the pandemic.
With middle-income status in sight, Bangladesh will lose many of the advantages it currently enjoys as an LDC, and it is imperative that our RMG sector evolve and keep up with the times. New players are entering the market and threatening our position by outperforming us, and our RMG sector risks being left behind and becoming obsolete if it cannot match the pace of competitors.
