I am trying to convey that the global value chains (GVCs) trade can add more value to readymade garments (RMG) industries of a developing country like Bangladesh than the traditional trade. This is because the GVCs trade has many distinctive characteristics (and surmountable barriers) that can contribute to even more value addition than that of traditional trade. Target audience could include development professionals, anyone engaged in international trade, academia, policy professionals, textile and clothing business or simply anyone interest in the topic.

1. FINAL PROJECT: DIGITAL ARTIFACT
Topic : Global value chains (GVCs) trade could add more value to readymade
garments (RMG) industries of Bangladesh than the traditional trade
Course : World Bank MOOC (WBGx WDR2001x): Trading for Development in the
Age of Global Value Chains -WDR 2020
Dates : August 18, 2020 ~ September 23, 2020
Participant ID : HABIB1710
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2. ANSWER TO PROMPT 1:
I have learned during this course that Global Value Chains (GVCs) are a powerful driver
of value addition, productivity growth, job creation, and increased living standards. This value
addition in GVCs trade has a great similarity with my own research work “Backward Linkage to
Ready Made Garments: Bangladesh Perspective”, published in 2002 from Dhaka, Bangladesh
(posted @Academia.com/links provided at APPENDIX-I). Of course, the finished product, in
my research, was readymade garments (clothing) and the discussion of value addition there was
carried out through the stages of production toward a finished item (say, a shirt) within a single
country (Bangladesh) as it usually happens in case of traditional trade. However, as this course
provides, the GVCs trade has many distinctive characteristics that contribute to even more value
addition than that of traditional trade. Thus, I strongly believe that the global value chains
(GVCs) trade can add more value to readymade garments (RMG) industries of Bangladesh than
the traditional trade.
Actually, I worked on the entire textile and clothing sector of Bangladesh with readymade
garments (RMG) as its end product. For example, if you buy a shirt in an apparel store located in New
York City imported from Bangladesh, that shirt has to go through many different stages of production
(like fiber, yarn, gray fabrics, finished fabrics, apparel making and finally export to international market),
adding value in each stage. Although there may be factor endowment like cheap labor in Bangladesh,
she cannot produce everything in the chain and supply inputs to successive stages needed to
produce a shirt as a final product. For example, fiber is not a factor endowment for Bangladesh
for which she has to depend mostly on imports of cotton or other types of fiber before making
yarn or directly import yarn from other countries. At the time I conducted my research, she even
imported most of the fabrics needed for readymade garments and did only the tailoring work.
Value addition was very low and the industry survived on the cheap labor (mostly women).

3. Therefore, I suggested, in my work, for indigenous production of items as much as possible so a
higher value addition is possible at every stages of production. So, basically, I suggested the
application of the concept of traditional trade (i.e., all parts/tasks of a finished product made in
one country before competing in international market) in my research work.
Now, in GVCs trade, product parts and components are manufactured and assembled in
multiple locations with each step adding value to the end product (a shirt, here). Although in my
research work, I envisioned a complete value chain for readymade garments industries of
Bangladesh, it was actually not possible to produce everything in one place (as in traditional
trade). Therefore, as mentioned in this course, GVCs trade in footwear and readymade garments
(RMG) had been thriving up in Bangladesh since the early eighties. Many items of production at
different stages (intermediate inputs) were imported from other countries before making a shirt.
Thus, the GVCs trade was already in place (and still is) in the RMG industries of Bangladesh.
Now the question is: Can GVCs make it easier for readymade garments industries of a
developing country like Bangladesh to successfully engage in international trade? Although, in
recent times, value addition to RMG industries through local fabrics (both knitting and woven)
has increased significantly and many other linkage industries (both backward and forward) have
developed in the country, there are still rooms for adding value to the RMG products and,
thereby, growth in production, income, job creation and, finally, a better way of living. The
reason is that GVCs trade allows for hyper specialization (higher skill build up and
professionalism which help produce high-quality value-added products). By breaking up
complex products, GVCs allow countries to specialize in specific parts or tasks of production.
This specialization allows firms and countries to benefit from the efficiency gains from
international division of labor and to reap economies of scale. Further, durable firm-to-firm

4. relation in GVCs helps attract foreign direct invest (FDI) along with accompanying technology
transfer like automation, use of artificial intelligence (AI) like robots (for repetitive works) as
well as use of intermediate inputs (like buttons for a shirt, for example) and so on. Because
GVCs trade allows for product components manufactured and assembled in multiple locations,
some tasks or components for making Bangladeshi garments could be outsourced from other
countries of the world, if viable, on a competitive basis in order to lower the cost of production
and add more value to the end product (again here, a shirt). Also, firms that participate in GVCs
tend to rely on a greater variety of higher-quality or less costly imported intermediate inputs
which results in productivity gains. Primarily because of productivity-enhancing effects, GVCs
trade has contributed more to income and employment growth than traditional trade. Again, as
far as environment issue is concerned, GVCs trade is dealing with many environmentally-
friendly products as well. The same could be true for an RMG product.
In my research work, as mentioned above, I did not consider these beneficial aspects of
GVCs trade (although GVCs goods were already being produced there). Rather, I went on
working with the concept of traditional trade entirely. However, due to these beneficial aspects
of GVCs trade, it is possible to add more value to the readymade garments (RMG) industries of
Bangladesh than through the traditional trade. Data support can be provided to this conviction.
For example, Bangladesh, as mentioned in this course, exports 7 percent of the world’s apparel
and footwear, the global value chain, third only to China and Vietnam. This sector employs 3.6
million workers as well. How this growth in production and value addition have been possible?
Certainly, it is through the GVCs trade. This is reiterated in a lecture video of this course which
says that, in the cases of Vietnam and Bangladesh, GVC trade has been more powerful than
traditional trade in supporting growth and poverty reduction.

5. Let’s see what lies on the other side of the coin. It’s true that the most sophisticated value
chains, require connectivity, skills and institutions. Does RMG product require sophisticated
value chains like in cars or computer manufacturing? No, RMG requires simple value chains
because garments manufacturing is simple and soft. However, in the wake of new technologies
and trade confrontations, one key question arises, whether GVCs trade would still be able to
offer developing countries (like Bangladesh) a clear path to progress (especially in RMG
industries). This inquiry has become even more pressing with the advent of COVID-19 and
GVCs may need to be reconfigured in the face of supply and demand shocks, transportation
disruptions and business uncertainty. Now, what about automation? Apparently, automation can
cost jobs and it can reduce demands for labor. But will it add to unemployment in RMG
industries of Bangladesh? As we know from this course, it has been observed that automation
contributes to increased productivity which increases the scale of production and expansion of
business. Thus, automation may not appear as any difficulty.
Thus, it can be reasonably and safely concluded that the GVCs trade, for all its excellent
features and surmountable barriers, could add more value to readymade garments (RMG)
industries of Bangladesh than the traditional trade.

6. APPENDIX-I
Front cover of my book:
Backward Linkage to Ready Made Garments: Bangladesh Perspective Part-II [MAIN]
https://www.academia.edu/27661769/Backward_Linkage_to_Ready_Made_Garments_Banglade
sh_Perspective_Part_II
Backward Linkage to Ready Made Garments: Bangladesh Perspective, Part-I
https://www.academia.edu/27661311/Backward_Linkage_to_Ready_Made_Garments_Banglade
sh_Perspective_Part_I

7. Buyers in Bangladesh RMG supply chain (source: www.rmgbd.net)
Apparel affects poor women in Bangladesh (Source: blogs.worldbank.org)