Experts advocate backward linkage for post-MFA era

Country's leading econom-ists and policy researchers yesterday laid emphasis on setting up backward linkage industries for the RMG sector to avoid of getting marginalised after the complete expiry of the quota system in 2005.

"It is widely believed that Bangladesh's apparel sector is at a crossroads. After two decades of phenomenal growth, the sector in the coming years is destined to make a transition in the face of total quota phase-out in 2005 under the WTO Agreement on Textiles and Clothing (ATC)," said Debapriya Bhattacharya, Executive Director of the Centre for Policy Dialogue (CPD).

"Will this transition be underpinned by a structural transformation of the sector leading to growth of backward linkage activities, or will the expected transition essentially precipitate a collapse of the sector?" Debapriya raised these questions, which are currently haunting the country's biggest export earning sector.

He was speaking at a national seminar on "Growth of Garment Industry in Bangladesh: Economic and Social Dimensions" organised by Bangladesh Institute of Development Studies (BIDS) in collaboration with OXFAM Bangladesh at BIDS conference room in the city.

Debapriya, jointly with CPD Research Director Mustafizur Rahman, presented the keynote paper -- Bangladesh's apparel sector: Growth trends and the post-MFA challenges -- at the seminar.

Chaired by Ghulamur Rahman, Secretary-in-Charge, Ministry of Commerce, the first session of the conference was addressed by Director General of BIDS Abu Abdullah, Programme Manager of OXFAM Selina Shelly, Professor of Dhaka University Nasreen Khandaker, BIDS Research Director Zaid Bakht and A K M Fahim Mashroor of the Beximco Group.

Senior BIDS Research Fellow Rushidan Islam Rahman and Narayan Chandra Nath also presented separate papers.

Debapriya also said three major factors exert severe constraints on Bangladesh's competitive strength in the global RMG markets and undermine its potential as a export sector.

These major factors, according to Debapriya, are absence of backward linkages, inadequate enterprise-level capability development and weak institutions and policies.

These drawbacks, even after phenomenal growth of the RMG sector over the last decade, resulted in low value-added contribution and limited product diversification.

The speakers suggested that the government and entrepreneurs take appropriate measures to help this pioneer sector of the country survive in the quota-free EU and US markets after 2004, facing challenges from the other garment-exporting countries.

As the apparel sector is going to face greater competition in the future, Rushidan Islam said that productivity of workers, including female workers would have to be increased so as to ensure more sophisticated technologies, decent wage along with competitiveness of the sector.

The second session was chaired by BIDS Research Director M Asaduzzaman while Ruchira Naved of ICDDR,B, Hossain Zillur Rahman of BIDS and Mashuda Khatun Shefali of Nari Uddug Kendra spoke.

Salma Choudhuri and Rita Afsar of BIDS and Syeda Absar of the Australian National University, Canberra, presented separate papers on the theme 'Household dynamics and growth of garment industry in Bangladesh'.