VOL NO REGD NO DA 1589

Tuesday, December 27, 2005

HEADLINE

POLITICS & POLICIES

METRO & COUNTRY

VIEWS & ANALYSES

EDITORIAL

LETTER TO EDITOR

COMPANY & FINANCE

BUSINESS & FINANCE

TRADE/ECONOMY

LEISURE & ENTERTAINMENT

MARKET & COMMODITIES

SPORTS

WORLD

 

FE Specials

FE Education

Urban Property

Monthly Roundup

Saturday Feature

Asia/South Asia

 

Feature

13th SAARC SUMMIT DHAKA-2005

National Day of Australia

57th Republic Day of India

US TRADE SHOW

 

 

 

Archive

Site Search

 

HOME

EDITORIAL
 
Closing ranks within the industry
S. F. Alim
12/27/2005
 

          READYMADE garments, knitwear and all other kinds of textile products are the major industries of the country that employ a very large number of workers as well as contribute to the national exchequer in a big way. Understandably, they are a big player in the economy. So, the government gives much importance to the interests of the garments, the knitwear and the textiles industries. This is in spite of the fact that the garments sector has, of late, been passing through troubled times, especially after the last World Trade Organisation (WTO) talks in Hong Kong where Bangladesh proved to be the net loser. The loss is due to the fact that Bangladesh's readymade garment may no more enjoy the privilege of duty-free access to the North American, especially the US, and the European markets.
But, meanwhile, the knitwear industry is learnt to have stolen a march on other industries in the textiles sector. Or in other words, Bangladesh is not only growing out of its earlier reputation as an underdeveloped economy, it is also gradually earning a respectable position as a developing economy with a competitive edge for a few of its exportable products. The failure of the government and the representatives of the garment industry to strike a favourable bargain for the country's garment products from the European and the US governments at the trade liberalisation talks of the WTO in Hong Kong is unquestionably a real downer. But as every proverbial cloud has a silver lining, the Hong Kong debacle for Bangladesh has also its brighter side.
That is so because Bangladesh's apparel industry has already come of age. Ironically though, the failure in Hong Kong is in a way recognition of the fact that Bangladesh's garment products have their competitive edge in the world market. That is why, Pakistan, which is a competitor of Bangladesh in the world market in textiles products, stymied our prospect for gaining duty free access for its RMG products to the markets of the USA and the European Union. Even Sri Lanka followed suit. Turkey, though a relatively developed economy, was not kind to Bangladesh's RMG products either. All these countries considered Bangladesh as a competitor in the world market.
However, notwithstanding the fact that Bangladesh's textile industry has its comparative advantage, there is still no proper integration among its various sectors, for example, the textiles proper, the RMG sector and the knitwear industry. The occasional face off between the two apex bodies in the textiles sector -- the Bangladesh Textiles Mills Association (BTMA) and the Bangladesh Knitwear Manufacturers' and Exporters' Association (BKMEA) -- is sufficient indication that these two sectors of the textiles industry are at cross purposes.
Very recently, the president of BTMA had come down heavily on the BKMEA, for, what he said, exerting pressure on the government to open up the Benapole border for allowing unhindered entry of yarns of Indian origin into the country. And since, according to him, the knitwear industry gets all its yarns from the BTMA, opening the Benapole landport for Indian yarns will only cause to destroy the local market of yarn to which the government provides 20 per cent incentive. Furthermore, he claimed that the knitwear sector was misguiding the government by providing false statement on the volume of its export. As for instance, in the last fiscal, the BKMEA claimed that its total export was worth $ 2.8 billion, whereas the BTMA president dismissed that figure saying that the real volume of export was half of what was claimed by the BKMEA (below $1.4 billion).
But how could then the BKMEA showed the additional $1.4 billion in its records of exports? The additional amount came from sweater export, alleged the BTMA president, adding that the sweater exporters were not members of the BKMEA. The allegations raised by the BTMA president are undoubtedly serious ones. But whatever the merits of the complaints, there is no doubt that the there is more to the bone of contention in question than meets the eye.
However, the entire controversy revolves round one issue -- the different divisions of the textile sector have not yet been able to see eye to eye with one another. This does not certainly speak of a healthy growth of the entire textile industry of the country. However, the government needs to look into the matter more closely to separate the facts from fiction, if any, in the greater interest of the industry, or the economy as a whole, for that matter. That is because, in the present circumstances, the few sectors of the economy that contribute to the country's export basket cannot afford to pick up a quarrel with one other. The outcome of the Hong Kong round of the WTO talks has exposed the vulnerability of the very export base of the economy. The furore over the alleged reversal at the WTO Hong Kong Ministerial would not have been so passionate had Bangladesh's export base been more broad-based than it is now.
In fact, the prospect of duty-free access of the country's RMG products to the US market was sealed long before the multilateral trade liberalisation talks had begun in Hong Kong. Today or tomorrow Bangladesh will have to face the moment of truth, if it is to depend solely on the preferential treatment of the Western governments towards some of its products for their accessibility in their markets. For any business to stand on a sustainable basis there is no alternative to being competitive.
Against this backdrop, granted that there is at least one commodity in its export list that is acclaimed globally as a highly competitive one. Should it then be any cause for complacency for Bangladesh? How can Bangladesh hope to survive in a quota-free, highly competitive global market, if it is not ready to face the challenge? Will not the task of facing the challenge prove to be tougher with a divided house, especially within the very industry that also holds out the biggest promise for the country?
It is time the textile sector including the RMG, the knitwear and others stood on a stronger and a more consolidated base. And it is not also within a particular sector of the industry that the consolidation has to be effected. The whole industry has a stake in this regard.

 

 
  More Headline
Exploiting man's inherent greed
Closing ranks within the industry
Little clarity on how aid gets spent
English teaching in Bangladesh
 

Print this page | Mail this page | Save this page | Make this page my home page

About us  |  Contact us  |  Editor's panel  |  Career opportunity | Web Mail

 

 

 

 

Copy right @ financialexpress.com