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Bangladesh Pins Economic Hope on Garment Industry

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Despite the global financial meltdown, the garment export industry in Bangladesh has yet to see a downturn. The industry is remaining competitive because of falling cotton and yarn prices, as well as low labor costs. But many industry leaders say the storm clouds will soon dampen one of the country's few success stories.

Manufacturing ready-made garments, an industry largely extinct in the developed world, is the economic engine of Bangladesh, providing about 80 percent of its hard currency. In the past three decades the made-in-Bangladesh tag has become ubiquitous in closets from London to Los Angeles.

Focusing on the lower and middle end - with some famous designer names also in the rack - has meant Bangladesh has withstood changing global fashions.

But now the worry is more about credit lines than hemlines.

At the factories of the Babylon Group, where nearly 10,000 workers churn out everything from T-shirts to formal wear, there is growing concern, however, about the ramifications of worried Western consumers foregoing non-essential purchases in 2009.

But company director Abidur Rahman is optimistic his racks of outbound garments can stay full even if his main competitors in China, Vietnam and the African continent see a thinning of the ranks.

"We don't expect, all of a sudden, the business, will go away from Bangladesh because of the long experience and very good skill. We are professional if you compare [us] with others," he said.

Some Bangladeshi manufacturers are reporting an increase in orders as factories shut down elsewhere, such as China, unable to compete with Bangladesh's combination of cheap labor and reliability.

The motivation to stay competitive is evident among those operating the rows and rows of sewing machines on Babylon's factory floor in Dhaka.

Zahanara Begum, who has been at this for 15 years, makes about $50 a month. She says 2008 was good but she is apprehensive about the new year.

Begum predicts confidently that if she and her colleagues can maintain their quality of work and productivity they can stay competitive in the tougher global economic environment.

At the head office of the Bangladesh Garment Manufacturers and Exporters Association, there is apprehension the industry could be undercut by a domestic, not foreign, factor.

Association vice president Shahidul Islam implores the government to cut interest rates as, at present, banks are charging borrowers around 15 percent for commercial loans.

"This recession the industry cannot face. They should take their decision on this. Otherwise industry cannot face these things. And if industry cannot face this decision [of having an interest rate cut] our whole Bangladeshi economy will be in a problem," he said.

At stake are the livelihoods of 2.5 million workers and more than $10 billion of annual income for their bosses.


Steve Herman

A veteran journalist, Steven L Herman is the Voice of America Asia correspondent.
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