The recent UN-WTO joint report has underrated the progress of the Bangladeshi RMG sector in some cases, apparel manufacturers said, disagreeing with a few indicators that show Bangladesh behind Vietnam.
According to the competitiveness report, titled The Textile and Clothing Sector in Asian Graduating Least Developed Countries: Challenges and Ways Forward, Bangladesh scored lower than Vietnam on 10 indices out of 12.
In terms of product quality, lead time, and sustainability, Bangladesh's clothing sector is not as good as that of Vietnam, the report states.
Bangladesh scored 3.5 and Vietnam scored 4.5 in both the product quality and lead time indices.
In sustainability, Dhaka scored 2, while Hanoi scored 3.5.
In terms of efficiency, innovation, and flexibility, Bangladesh and Vietnam scored 3 and 4 for each, respectively.
The report, prepared after surveying at least 150 exporters and 30 global brands and retailers, also included other major parameters, like the ability to create value added products, financial stability and political stability, price, and tariff advantages.
The apparel industry of Vietnam logged at least one point higher than Bangladesh on the 10 leading indices, the study shows.
Bangladesh is ahead of Vietnam and China only on two indicators — price and tariff advantage, thanks to duty-free access to key global markets and local cheap labour.
According to the study, Bangladesh is little ahead in most of the indicators than three other least developed countries (LDCs) of Asia, like Cambodia, Laos, and Nepal.
Faruque Hassan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said that the report has marked some important areas for the sustained growth of the RMG industry.
“However, in some cases the report, surprisingly, underrated the progress made by our industry in the past decade,” he added.
He added that specifically, the report mentioned environmental compliance related risks as a downside for sourcing from Bangladesh.
“But the industry has made a huge stride to transform workplace safety, workers’ wellbeing, and environmental sustainability; the rating seems to be inappropriate,” he added.
Through the joint initiatives of the government, entrepreneurs, buyers and ILO, a paradigm shift has happened in the area of structural, fire and electrical safety, he added.
“We took a zero tolerance policy in ensuring compliance across the sector,” he added.
Earlier, regarding how to catch up with Vietnam in the global market, Professor Mustafizur Rahman, distinguished fellow of the CPD, told Dhaka Tribune that Vietnam is far ahead in labour productivity, capital productivity and diversification.
“We need to improve these. We need to increase skills, move from low end to high end, increase value addition, product basket diversification, and reduce lead time,” he added.
The BGMEA president went on to say that with 155 LEED certified green factories, Bangladesh has the highest number of green garment factories in the world.
“While assessing the competitiveness, the report stresses the need for vertical integration, raw material sourcing, innovation, flexibility, agility and speed to market. We have also prioritized all these points,” he added.
The sector has also identified diversification, value addition, innovation, technological upgrades, and re-skilling and upskilling as our core priority areas, said the BGMEA president.
“We are even promoting circular fashion. For the next phase of growth, we have to change the business model of our industry,” he added.
Hassan also said that they have achieved an “unparalleled” position in this scarred economy, and are stressing the importance of modular production facilities for greater flexibility and for catering to high-end items.
Despite all the odds, in recent years, the industry has invested significantly in backward linkages, high-end items like activewear, outerwear, lingerie, and so on.
“We are also investing in product and process upgradation. We believe the industry will start receiving benefits in terms of increased supply of yarn, fabrics and accessories from local sources from this year,” he added.
He also said that in case of lead time, Chittagong port is performing well.
“There are some problems in road transport, because the construction work of mega projects is going on, once these are completed, there will be no misery,” he added.
With an aim to ensure a solid recovery from Covid-19, progress in the upcoming days, and for entering the new phase of growth, BGMEA has initiated three separate studies which will set a clear roadmap for the industry in the coming days.
“These three are studies on the RMG sector’s roadmap to recovery, exploring the prospect of Bangladesh’s non-cotton textile and RMG products in the global market, and a study on virtual marketplaces,” Hassan said.
He also said that Bangladesh’s graduation to a middle-income country will definitely cause some significant changes which need collaborative and joint effort to overcome.
“To prepare for facing the graduation challenges, we need empathetic consideration from our longstanding trade partners like the EU and other preference giving countries in terms of extending the current scheme by at least 10 years,” he added.
