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Thursday, 11 December 2008 17:07 |
| International News Services sources: |
 By Paul Cochrane, in Dhaka, Bangladesh
The old dictum goes – ‘one man's loss is another man's gain’. Curiously, in a globalised world in the midst of a financial downturn, this saying is particularly true, with certain countries unexpectedly benefiting from an otherwise near universal crisis.
Bangladesh is one of the unexpected gainers, especially as 75.83% of its national exports come from knitwear (39.21%) and woven goods (36.62%), primarily to the European Union (EU) and US markets. The expectation might be that exports of Bangladeshi ready made garments would slide in accordance with the drop in global stock markets and plummeting retail sales. After all, India has this year laid off 700,000 textile workers, Indonesia 120,000 (10% of the sector), and China has equally downsized operations in its clothing sector in the past few months. But Bangladesh's prospects are looking much rosier. Why? Well in woven, knitwear and footwear, the goods the country exports are not medium- to high-end wear, as China, India and elsewhere have increasingly moved into of late. And in a recession, cheap goods are popular.
Bangladesh produces lots of these. It has much lower minimum price level than elsewhere, with a dozen cotton t-shirts exported to the EU market costing US$19.56 in 2006 but just US$15.60 in 2007, significantly less than nearest rival Cambodia at US$29.04, according to Eurostat, the EU’s statistical agency.
In a period where companies are cutting costs at every possible corner, such figures speak for themselves. Sure, in the near term Bangladesh's garments sector will not report the kind of double digit growth figures they have experienced over the last few years, but static and marginal growth is certainly more preferable than laying off workers and downing tools. And if Bangladesh effectively utilises the opportunities this crisis is providing to cement good working relations with major buyers, it could over the next few years rise up the ranks to be among the top three ready-made garments manufacturers in the world. |
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