State of Rmg in Post Mfa Era

In order to control the level of imported RMG products from developing countries into developed countries, Multi Fiber Agreement (MFA) was made. The MFA agreement imposed an export rate 6 percent increase every year from a developing country to a developed country. It also allowed developed countries to impose quotas on countries that exported at a higher rate than the bilateral agreements. In the face of such restrictions, producers started searching for countries that were outside the umbrella of quotas and had cheap labor. This is when Bangladesh started receiving investment in the RMG sector.

The RMG industry is the only multi-billion-dollar manufacturing and export industry in Bangladesh. Whereas the industry contributed only 0.001 per cent to the country's total export earnings in 1976, its share increased to about approximate 80 percent of those earnings in 2010. Bangladesh exported garments worth the equivalent of $12348 Million in 2010, which was about 3.00 percent of the global total value ($276 billion) of garment exports. The country's RMG industry grew by more than 15 percent per annum on average during the last 15 years.

Today Bangladesh has successfully established herself as a prominent apparel/textile exporter in the global textile trade.

* The export of RMG plays an immensely important role in the socio-economic development of Bangladesh accounting for more than 75 percent of Bangladesh's total export earnings.

* Over 3 millions workforces are directly employed in this sector.

* The employment of woman (about 80%) in this sector has created empowerment amongst women of the lower segment of society.

* Under the MFA system, Bangladesh enjoyed an ensured market restricted by quota limit to our competitors.

* The sector accounts for about 13 percent to the GDP.

* Centering the readymade garment (RMG) sector many more ancillary industries have also been set up as a supportive sector to RMG.

* The foreign exchange reserve of the country largely depends on the RMG sector.

With the span of 15-20 years, export earning from this sector and employment generation of the RMG sector have been increasing at double-digit rates from year to year. Some important issues related to the RMG industry of Bangladesh are shown in following table:

Important issues related to the Bangladesh ready-made garment industry

Year(s) Issue

1977-1980 Early period of growth

1982-1985 Boom days

1985 Imposition of quota restrictions

1990s