As the biggest source of foreign currency in the country, with its sizeable contribution to the nation’s GDP, the Ready Made Garments (RMG) sector in Bangladesh is a boon for our economy.
But growth in RMG has not been without its challenges.
For the most part, these have had to do with forces beyond our control, what with falling global demand in the RMG market driving RMG prices down and thus creating a profit crunch.
But there are domestic problems that are making matters worse, particularly the volatility of power and gas prices.
In that regard, the power minister said he cannot give an assurance of price predictability because, according to him, the current investment in the power sector is not enough.
Then in that case, our government must make investing in the power sector a priority, because we simply cannot afford to lose our competitiveness in the RMG market. But the $9 billion deficit in investment is not something we can fix right away, so we need to think about other ways for the time being.
The garments industry is a major source of employment for our enormous, largely unskilled population. In fact, the low skill level in the industry is one of its biggest obstacles in the global RMG market. The government and the BGMEA can therefore work out a way to train this segment of the population to make them more productive and thus, reduce costs for RMG firms.
In the meantime, steps should be taken to make the ports more efficient.
Such coordinated action can stave off shrinking margins and boost RMG exports, which will then generate the funds to invest in power.