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Hopes And Fears Of Rmg Sector In Post-Mfa Period

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RMG sector of Bangladesh which as, by this time

As the Multi-Fibre Arrangement (MFA) will be

passed its growth stage. Despite many

phased out by 2005 under the World Trade

shortcomings, it is now stable and a matured

Organisation (WTO) rules, Bangladeshi garment

industry. At this stage - when growth is steady

industry will no more enjoy quota and the

but not that rapid - the RMG sector of

industry will have to find its own place in the

Bangladesh is successfully utilising hundred per

competitive international market. Quota system

cent of its quota. From here we can bring some

affects an economy in two different dimensions.

logical assumptions. The RMG industry is

Economies, which are not competitive enough,

utilising its full quota. This means that it has

can have a share of the market taking the

successfully established a certain degree of

advantage of quota allocated to it. On the other

acceptability in the global market. Under the

hand, economies which are competitive enough

quota system, none can export beyond limit.

cannot enjoy as much market share as they can

When quota is waived, there will be no barrier to

afford because those cannot cross the limit of the

the export limit and thus RMG exports are

quota. When quota will be phased out, the

expected to increase. It is just a logical

economies of the first kind - like those of Nepal,

assumption. If it does not work - or in other

Bangladesh, Pakistan and Myanmar - are afraid

words, if export does not increase - in the quota-

that they would lose global market share. On the

free environment, it will not, at least, decrease.

other hand, the economies of the second kind -

So, hopefully, there is nothing serious to be

those of China, Thailand etc. - are expecting to

worried about.

gain more share of the global market.

However, there is also no room for complacency.

Nobody actually knows what is going to happen

Because, fierce competition in the global market,

after 2005 under WTO rules. But it is being

even in the local one, is predicted under the

feared that the readymade garments (RMG) of

quota-free environment. To face the upcoming

Bangladesh will take a severe jolt. But there are

fierce competition and to grab even more share of

several aspects of the WTO policies and the RMG

the global market, the RMG industry of

sector of Bangladesh which still holds out some

Bangladesh has to increase its efficiency in

hope. The full impact of free trade will not be felt

production, decrease lead time in the order-

at the very beginning of 2005.




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