Bangladesh's Thriving Garments Industry Drives Economy

Garments Industry of Bangladesh Economy
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1. Introduction
Globalization has hit the populations of the third world hard. Unemployment has risen as
established industries have been destroyed and poverty has deepened. Yet the organizations that
clear the way for Foreign Direct Investment do have something to be proud of in Bangladesh – the
rapid expansion of the garments industry, which now employs approximately 1.5 million people.
However, for these workers the joy of having a job is marred by the harsh conditions they endure
in the workplace.
Bangladesh began creating Export Processing Zones (EPZs) in 1978 to attract foreign capital and
earn export dollars. In 1993 the Bangladesh Export Processing Zone Authority (BEPZA) was set
up and a blanket ban on trade union activity imposed. This is obviously the most attractive feature
for investors, on top of tax breaks and other incentives on offer. The EPZs now employ 70,000
workers, mostly in the garment and shoe-making industries. National labor laws do not apply in
the EPZs, leaving BEPZA in full control over work conditions, wages and benefits.
However, BEPZA ignores not only national standards but its own. The guaranteed minimum
monthly wages of $US70, $US 40 and $US 25 for skilled, unskilled and probationary workers
respectively is a laughable fiction. As is the entitlement of permanent workers to annual festival
bonuses, medical coverage, and accommodation and transportation allowance. The body has
consistently refused to give out letters confirming employment and does not hire any workers on
a permanent basis. In reality, earnings average about $20 per month – less than half the official
rate – and workers do forced overtime under threat of dismissal. The withholding of pay for months
at a time – a practice common throughout the private sector – is also the norm.
The situation in the garment industry at large is even worse. The nation’s top export earner employs
1.5 million workers under conditions of super-exploitation. The majority are young women from
rural areas who have migrated to the urban centers in search of work. The sweatshops are more
like prisons than factories, with no fixed hours, regular breaks or days off. Workers earn between
$7 and $10 a month, for an average of 13 hours a day, up to 27 days per month. This comes to an
hourly rate of two or three cents! The bourgeois media reports that the industry currently owes $
300,000 in back pay, a staggering amount considering the miserly wages.
Garment workers change jobs frequently because of wage arrears, lay-offs, ill health or harassment
from the bosses and their “security guards”. As the vast majority of employees are girls and young
women – most living apart from their families – there are many cases of physical and sexual
harassments.

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2. Garments Industries in Bangladesh:
Garments Industries in Bangladesh are a very prospecting industries in Bangladesh. The total
demand of our garments can be fulfilled by the domestic made garments and so also this sector is
doing very well in the sense of exporting. The major portions of our exports come from the
garments industry. Even though the major portion of the government revenue comes from this
sector but only few people are thinking about the present situation of the workers of this sector.
As it is very significant issue of the country so intellectuals should watch about it. They have
reflected on it how the problem can eliminate on this sector.
Bangladesh earns nearly $7 billion a year by exporting textile products, mainly to Europe and the
United States. This is about 70 percent of total export earnings of the country. The RMG industry
has around 4,000 units across the country. It employs around 2.5 million workers, 90 percent of
whom are poor women. Whenever the country is criticized for its high level of corruption and
confrontational politics, its garment industry is held up as a success story.
For Bangladesh, the ready-made garment export industry has been the proverbial goose that lays
the golden eggs for over fifteen years now. The sector now dominates the modern economy in
export earnings, secondary impact and employment generated. The events in 1998 serve to
highlight the vulnerability of this industry to both internal and external shocks on the demand and
supply side. Given the dominance of the sector in the overall modern economy of Bangladesh,
this vulnerability should be a matter of some concern to the policymakers in Bangladesh. Although
in gross terms the sector’s contributions to the country’s export earnings is around 74 percent, in
net terms the share would be much less partially because the backward linkages in textile have
been slow to develop. The dependence on a single sector, no matter how resilient or sturdy that
sector is, is a matter of policy concern. We believe the policymakers in Bangladesh should work
to reduce this dependence by moving quickly to develop the other export industries using the
lessons learned from the success of apparel exports. Support for the apparel sector should not be
reduced. In fact, another way to reduce the vulnerability is to diversify the product and the market
mix.Preliminary data and informal evidence indicate that this sector seems to have weathered the
devastating floods relatively well. The industry is one hundred percent export-oriented and
therefore insulated from domestic demand shocks; however, it remains vulnerable to domestic
supply shocks and the smooth functioning of the banking, transportation and other forward and
backward linkage sectors of the economy. The Dhaka-Chittagong road remains the main
transportation link connecting the production units, mostly situated in and around Dhaka and the

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port in Chittagong, where the raw material and the finished products are shipped in and
out. Despite increased dependence on air transportation, trucks remain the main vehicles for
transporting raw materials and finished products for Bangladesh garment exports.
Eventually, this road link was completely severed for several days when large sections of the road
went under water for a few weeks during the latter phase of the floods. This delinking of the road
connection between Dhaka and the port in Chittagong was as serious a threat as one can imagine
for the garment exporters. The industry responded by calling upon the Bangladesh navy to help
with trawlers and renting a plane from Thai Air that was used to directly fly garment consignments
from the Dhaka airport to the Chittagong airport several times a day.
2.1 List of Bangladesh Garment Manufacturers and Exporters:
 AFTEX LIMITED
 AGAMI APPARELS LTD.
 AGAMI FASHIONS LIMITED
 AGRANI SWEATERS LTD.
 AG’S APPARELS LTD
 AHMED FASHIONS
 AHMEDIA GARMENTS (PTE) LTD.
 AHSAN FASHIONS LTD.
 AHSAN KNITTING LTD.
 AIRTEES APPARELS LTD.
 A ONE DRESSMAKERS LTD.
 A PLUS INDUSTRIES LTD.
 A.B. FASHIO WEAR LTD.
 A.B. SIDDIQUEE APPARELS LTD.
 A.B.C. ATTIRE LTD.
 A.B.M APPARELS LTD.
 A.B.M. FASHIONS LTD.
 A.B.S. GARMENTS LTD.
 A.D. ENTERPRISE (GARMENTS DIVISION)
 A.F.M. SWEATERS LTD.
 A.G. DRESSES LIMITED.
 A.H. GARMENTS LTD.
 A.J. SUPER GARMENTS LTD.
 A.K. KHAN & CO. LTD. (GARMENTS DIV)
 A.K.B. FASHIONWEAR (PVT) LTD.
 A.K.J. FASHIONS FABRICS LTD.
 A.K.M. KNIT WEAR LTD.
 A.M. DESIGN LTD.
 A.M. SWEATERS LTD.
 A.M.C. GARMENTS LTD.
 A.M.K. APPARELS LTD.
 A.N. GARMENTS LTD
 A.N. SWEATERS LTD.

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 A.Q.M. APPARELS (PVT) LTD.
 A.R. APPARELS LTD.
 A.R. FASHIONS LTD.
 A.R. KHAN SIZING & FABRICS LTD.
 A.R.A. GARMENTS & TEXTILES LTD.
 A.R.B. KNIT WEAR LTD
 A.S FASHION LTD.
2.2 Working environment and Law in Garments Industries in Bangladesh
There are some certain criteria in working condition. Every employer is bound to provide sound
working environments for their employees according to different section of the factor is act
1965. In working environment the following criteria’s should be provide by the environment for
employees of his/her organization. This are-
Health and Hygiene
 Cleanliness
 Disposal of wastages and effluents
 Ventilation and temperature
 Dust and fume
 Artificial humidification
 Over crowding
 Lighting
 Drinking water
 Latrines and urinals
 Spittoons
Safety
 Precautions In case of fire
 Fencing of machinery
 Working on or near machinery in motion
 Employment of children’s on dangerous machines
 Striking gear and devices for cutting of power
 Self-acting machines
 Causing of new machineries
 Prohibition of employment of women and children near cotton openers

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 Revolving machinery
 Floors stairs and means of access.
 Excessive weights.
 Production of eyes.
Welfare
 Washing facilities.
 Fast aid appliances.
 Shelters.
 Canteens.
 Rooms for children’s.
Working hours
 Weekly hours.
 Weekly holiday.
 Compensatory weekly holiday.
 Daily hours.
 Intervals for rest or meals.
 Spread over.
 Night shift.
 Prohibition of overlapping shift.
 Extra allowance for over time.
 Restriction on double employment.
Employment of young person
 Prohibition of employment of children.
 Certificate of fitness.
 Working hours for children’s.
 Register of child workers.
 Power to require medical examination.
Leave and holidays with wages
 Annual leave with wages.
 Festival holidays.
 Casual leave and seek leave.
 Maternity leave.

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 Wages during leave or holiday periods.
 Payment in advance in certain case.
Miscellaneous
 Penalties.
 Accident offences by workers.
Those are the specific criteria which are mention in the factories act 1965. Each and every section
of the law is not mentioned and describe here due to the shortage of space and those are not subject
related. Those laws must be followed by the employer of garments worker.
3. Impact of Garments Industry in Bangladesh Economy
At independence in 1971, most observers of the newly emerged country took a pessimistic view
about the developmental prospect of Bangladesh. Many thought that the country would remain
permanently locked in a ‘below poverty level equilibrium trap’. Although there is little room for
complacency Bangladesh has come a long way from there. About two-fifths of the economy is
now connected with the global economy through exports, imports, factor and commodity markets;
the degree of openness of the economy currently stands at 40%. Bangladesh can now rightfully
claim that she has graduated from a predominantly aid receiving nation to a trading nation.
The export-oriented RMG sector has made crucial contribution to this abovementioned
transformation of the Bangladesh economy. The role of our RMG entrepreneurs, domestic fiscal
and financial, institutional policy support and incentives put in place by successive governments,
substantial RMG supportive linkage activities within the domestic economy and global market
opportunities combined to create a story which is, to be honest and true, unparallel in the
developing world. When jute and jute goods were losing their traditional markets, with the
prospect of drastic fall in forex earnings it is the RMG sector which came in first to replace it, and
then to overtake it. While traditional export sector could not yield expected results, the RMG sector
gradually injected dynamism in the export as well as in the domestic economy though backward
and forward linkage economic activities.

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3.1 Macro contribution to the Economy:
Bangladesh’s RMG sector contribution in terms of GDP is highly remarkable; In FY15 it has
reached 13.10 percent of GDP, which was only about 3 percent in 1991. Although in FY14 it
was 14.2 percent of GDP. The contribution of Bangladesh Knitwear sector on GDP is 6.39% and
woven sector is 6.72%. So, RMG plays a pivotal role in promoting the development of other key
sectors of the economy like banking, insurance, shipping & Logistic industries, etc.
3.2 Exporting Condition of Garments Industry:
The Ready-Made Garments (RMG) industry occupies a unique position in the Bangladesh
economy. It is the largest exporting industry in Bangladesh, which experienced phenomenal
growth during the last 25 years. By taking advantage of an insulated market under the provision
of Multi Fibre Agreement (MFA) of GATT, it attained a high profile in terms of foreign
exchange earnings, exports, industrialization and contribution to GDP within a short span of
time. The industry plays a key role in employment generation and in the provision of income to
the poor. Nearly two million workers are directly and more than ten million inhabitants are
indirectly associated with the industry. Over the past twenty years, the number of manufacturing
units has grown from 180 to over 3600. The sector has also played a significant role in the
socioeconomic development of the country.
The export made by Garments Industries of Bangladesh is improving year after year except some
of the year. Strike, layout, shutdown of company, political problem, economic problem, inflation
etc. are the prime cause of decreasing export in this important sector. But above it, Readymade
Garments Industries is the leading sector in export sector. In such a context, the trend and growth
of garments export and its contribution to total exports and GDP has been examined the
following picture shows the position.
3.3 Contribution of Garments Industry to the Economy
Garments Industry occupies a unique position in the Bangladesh economy. It is the largest
exporting industry in Bangladesh, which experienced phenomenal growth during last two decades.
By taking advantage of an insulated market under the provision of Multi Fibre Agreement (MFA)
of GATT, it attained a high profile in terms of foreign exchange earnings, exports, industrialization
and contribution to GDP within a short span of time. The industry plays a key role in employment
generation and in the provision of income to the poor. Nearly two million workers one directly and
more than ten million inhabitants are indirectly associated with the industry (Ahmed and Hossain,
2006). The sector has also played a significant role in the socio-economic development of the
country. In such a context, the trend and growth of garments export and its contribution to total
exports and GDP has been examined the following table shows the position.

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3.4 For steadyeconomic growth:
Economy of Bangladesh is growing well and to keep up this trend stable and focused investments
and efforts in different segments of textile education is very important. To make the government
dream true to increase annual export to US$50 billion dollar by 2021, become a middle-income
country by 2021 and a developed one by 2041, the quality and quantity expansion of textile
education is must. Already textile education is playing an important role to enhance our economic
growth.
3.5 For providing skilled manpower:
The demand of skilled manpower is growing fast since the technology for the Textile and RMG
sector is changing rapidly and importance of productivity improvement becoming more
significant. In many cases technology-based knowledge is not growing as it should be and most of
the worker is uneducated. Our garment sector employs some 20,000 foreign nationals in various
positions and the sector alone spends 5 billion dollars to hire skilled people from overseas to work.
For the industry, we need trained and educated manpower to replace the foreign experts. Textile
education through different colleges, universities, diploma and vocational institutions as well as
training centers is helping to provide skilled manpower for the textile industry.
3.6 To reduce unemployment problem:
Bangladesh, like other developing countries, suffers from unemployment problem. Unemployment
rate in Bangladesh was approximately 47 percent in 2015, according to a report of Economist
Intelligence Unit (EIU) and day by day, the problem is increasing. To reduce this problem, textile
education like textile engineering, diploma and vocational courses for students and different
training for professionals and workers can play a major role as there is a great demand of it.
3.7 Employment, Wages & Productivity:
With Wage increases, bound higher investments for RMG industry owners of Bangladesh in
improving compliance issues, and persistent devaluation of euro currency against US dollar,
Bangladesh has lost market share in EU market, but Bangladesh has still highest relative
comparative advantage (RCA). This relative comparative advantage for Bangladesh in RMG

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sector attributes to mainly for two reasons – lower wages and lower price for RMG products in
international market. Productivity of RMG increases over time in RMG sector in Bangladesh.
Moreover, challenges in productivity of RMG sector still remains due to lack of investments, lower
backward linkages and lack of infrastructures and skilled labor. Productivity in Bangladesh
increases overtime because improvement in reduction in lead time, higher value addition leading
improvement in backward linkages through higher investment in capacity development and quality
improvement.
Worker’s efficiency is a fundamental to meet up buyer’s demand in time, management skill among
product lines in production process. Based on the Emerging Survey in 2015, 88 percent of the
owners think that productivity and efficiency largely depend on the outcome of the sewing and
cutting line, skill of operators of sewing to operate machines and in some extent less noisy
environment. In Bangladesh, worker’s efficiency lower attribute to lack of proper training of
sewing operators, lower wages and compliance issues that disturb worker’s attention.
3.8 Trade Information:
YEAR NUMBER OF GARMENT
FACTORIES
EMPLOYMENT IN
MILLION WORKERS
2010-11 5150 3.60
2011-12 5400 4.00
2012-13 5876 4.00
2013-14 4222 4.00
2014-15 4296 4.00
2015-16 4328 4.00
2016-17 4482 4.00
2017-18 4560 4.00
4.Bangladesh GDP as RMG growth:
A fall in global demand for Bangladesh’s lucrative ready-made garments (RMG) sector
caused a slowing in the rate of export earnings growth in the last fiscal year, data from the

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Export Promotion Bureau (EPB) has revealed. Although Bangladesh’s overall export
earnings rose 3.67% rise in the first eleven months of Fiscal Year 2016-17 to hit $31.79
billion, the growth in export earnings slowed to 1.39%, earning $3.07 billion against the
target of $3.35 billion set for the month. Trade analysts and leading sector figures have
said the slow rate of growth highlighted by the EPB figures is due weaker demand in the
RMG sector - the lifeline of Bangladesh’s economy in terms of export earnings. “Low
demands in global markets caused slower growth in Bangladesh’s exports earnings, which
is even seen in other countries,” Khondaker Golam Moazzem, research director at Centre
for Policy Dialogue (CPD), told the Dhaka Tribune. “It is a matter of concern as it may
adversely impact backward linkage industry, production and even the Gross Domestic
Product (GDP).” Of the total export earnings in the July-May period of FY 2016-17, the
RMG sector grew by 2.16% to contribute $25.62 billion, or 80.59%. The sector, however,
failed to reach its target of $27.38bn. Moazzem added that the government offered some
incentives for the apparel sector in the proposed budget unveiled on June 1, but said it is
not up to the expected level. “Since the budget is proposed, the government should take
measures that would help boost exports, especially in the non-traditional markets,” he said.
Exporters Association of Bangladesh (EAB) president Abdus Salam Murshedy told the
Dhaka Tribune that he thought the situation was “critical”. “The government should come
up with comprehensive package in the budget for the next fiscal year, or else, the crisis in
the manufacturing industry may linger,” he warned. “The growth rate is much lower than
expected due to losing competitive edge in the global market to our competitors.
Bangladesh’s production capacity in the RMG sector has also gone down due to the ongoing
remediation, which may be another reason,” he said. Of the total export earnings in the
July-May period of the current fiscal year, knitwear posted 4.91% growth to $12.5 billion,
but woven garments witnessed negative growth and were 0.33 % down compared to the
$13.16 billion revenue of the previous period. Jute and jute goods posted a 9.84% rise to
$903.69 million, while the home textile sector posted 6.72% growth to $737 million.
Leather and leather goods earned $1.12 billion, which is 9.17% higher compared to $1.02
billion in the previous year. Among the major sectors, frozen and live fish witnessed
negative growth by 1.89% followed by processed leather, which fell 10.31% to $225
million.
5.Current Scenario of the Garment
5.1Current Scenario of the Knit Garment:
RMG Knit products are highly concentrated on product 6109 and Product 6110, which
captures almost 77 percent in FY09 while it accounts to 73 percent in FY16. Thus, this is
a good indication of production diversification in Knit garments industry in Bangladesh,
but it seems to be slower pace in case of Woven garments. Knit product concentration ranks
of top three products remain constant during FY09 to FY16. These include top three knit
products- 6109, 6110 and 6105. But, interestingly share of these top three Knit products
start to decline, which reduce the dependency of top three major products, so, earning
opportunities of every firms of Bangladesh RMG industry will expand in future with

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minimal uncertainty for higher investments in RMG sectors for local firms. According to
EPB in FY16 Up to November earning from knitted wear was 5236.73 million US Dollar
at the same period of time of previous fiscal year it was 4997.78 million US dollar. So it
seems a positive growth of 4.78 percent.
5.2Current Scenario of the Woven Garment:
Garments are made from various types of fabrics .Woven garments are made from the type
of fabric that is crafted through weaving. In order to understand the place of woven
garments in the realm of garments manufacturing, a holistic look at the entire garments
production chain should be taken.
According to EPB in FY16 Up to November earning from Woven items were 5226.03
million US Dollar at the same period of time in previous fiscal year it was 4693.47 million
US dollar. So it seems a positive growth of 11.35 percent.
The main markets of Bangladesh woven products of Bangladesh are the European Union
countries and the United States. Historically, these two markets have counted for over 90%
of the entire woven export of the country. In the EU, the bigger markets are the U.K.,
Germany, Sweden, Italy, and the Netherlands. In the North American region, besides the
US, Canada is a substantial market where woven garments export of BD is gradually
increasing. Among the new markets, Japan and Turkey seem to be big potentials, where a
greater share of woven export is going every year.
The main woven products of Bangladesh are shirts, trousers, and jackets, mostly made from
cotton. Though the products are not categorized by the Export Promotion Bureau according
to whether they are woven shirts or non-woven shirts, the following table compiled from
data of EPB still testifies that these are the three main woven products of Bangladesh.
These three products, the majority of which are woven, constitute over 40% of the total
apparel export of Bangladesh.
5.3 Current Scenario of the Accessories (button, carton, packaging, label,
elastic):
Garment Accessories and Packaging Industry plays vital role not only in improving the
quality of products to international level by adding modern design but also by ensuring
appropriate wrapping to maintain quality free from being stale of soiled or spoilt. In the
transportation of exportable goods, the inevitability of the role of packaging and
accessories is beyond question. In Bangladesh, Ready Made Garments (RMG) industry has
emerged as the leading export-sector (contributing 79% of the country’s total annual
export-earnings) over a period of around over 25 years. Garments accessories & packaging
manufacturers & exporters of the country and represents more than 1335 Garments

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Accessories & Packaging industries of the country. Garment Accessories & Packaging
Industry act as a backward linkage industry of RMG sector which employs more than
300,000 people. This sector not only generates employment but also earned valuable
foreign exchange to the tune of US$ 5.60 billion annually during the financial year 2014-
15. If the sector gets policy support and cooperation from government, the earning of this
sector is likely to increase up to US$ 12 billion by the end of 2018, and to US$ 18 billion
by the end of the year 2025. Total investment of this sector is about US$ 30 billion & value
addition is near about 40 percent. The country now makes 30-35 packaging and accessory
items including labels, zippers, tags, thread, ribbon, buttons and rivets to meet the garments
sector's requirement.
6. RMG export earnings growth lowest in 15 years:
Bangladesh’s export earnings from the apparel industry, the lifeline of foreign currency
earners, have seen only a 0.20% rise to $28.15 billion, which is the lowest on record in the
last one and a half decades, in the just-concluded fiscal year. However, Bangladesh’s
overall export earnings stood at $34.83 billion in FY’17, which is 1.68% higher than the
$34.25 billion a year ago. Since the inception of RMG export, Bangladesh has registered
negative growth only once in 2001-02 fiscal year, by 5.68%, to $4.58 billion. Trade analysts
and businessmen have blamed average price fall of products, ongoing structural reforms in
the apparel industry, economic slowdown and sluggish demand in export destinations,
devaluation of Euro and appreciation of BDT against US dollar, for the lackluster export
growth. According to provisional data of Export Promotion Bureau (EPB), Bangladesh’s
export earnings from the RMG sector stood at $28.14 billion, posting 0.20% growth in the
past fiscal year. The figure is 7.34% less than the target of $30.38 million. In the last fiscal
year, Bangladesh earned $28.09 billion from the clothing industry.

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Of the total amount, Knitwear products earned $13.76 billion, which is 3% higher than the
$13.35 billion in the same period a year ago. Woven products earned $14.39 billion, down
by 2.35%, compared to $14.73 billion a year ago. As per the provisional data, in FY’17,
Bangladesh’s overall export earnings stood at $34.83 billion with 1.68% growth. The figure
is over $2 billion less than that of the government target of $37 billion set for the previous
fiscal. In June, export earnings saw a 15.27% fall to $3 billion, which was $3.59 billion in
the same period last year. “The meager growth is a reality in the Bangladesh RMG sector.
It comes as no surprise as the apparel industry is going through many challenges, including
remediation, devaluation of Euro and labour unrest,” Exporters Association president
Abdus Salam Murshedy told the Dhaka Tribune. RMG manufacturers are working hard to
face the challenges by introducing production engineering, technological upgrade etc, but
it is not enough, said Salam. In continuation with the existing policy support, the
government should offer special incentives, including 5% cash incentives on the value of
Freight on Board (FoB) for at least next two years, the former BGMEA president said. On
the other hand, to bring about sound export growth, the government has to come up with
long-term policy support, including tax holiday for 10 years, for new investors to attract
investment. “The average price fall of products and slow demand for products in the global
market has led to sluggish growth in export earnings while our competitors are doing better
in the global arena,” Prof Mustafizur Rahman, a distinguished fellow at the Centre for
Policy Dialogue (CPD), told the Dhaka Tribune. Bangladesh has to develop competitive
edge by increasing workers’ productivity as there is pressure ahead over hike in workers
wage, he said. The CPD fellow suggested that the country should focus on RMG product
diversification, and to do that, the businessmen, as well as the government, need to come

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up with newer efforts. “Our export earnings, including from the service sector, stood at
over $35 billion in the just concluding fiscal. In the current fiscal year, Bangladesh will
see a sharp rise in export as the clothing industry is very close to the end of the remediation
process,” Commerce Minister Tofail Ahmed told the Dhaka Tribune. “Export earnings,
especially from clothing products, have witnessed meager growth due to price fall and
devaluation of Euro and Pound,” Bijoy Bhattacharjee, vice-chairman of EPB, told the
Dhaka Tribune. Bangladesh has to focus on quality products and EPB in the current fiscal
year will work on the issue, he said, adding that on the other hand, the government is
working very hard to diversify products and market in line with its Seventh Five-Year Plan.
6.1 Bangladeshcancreate millions of jobs in RMG sector:
These results suggest that the sector has a larger potential for job generation in South Asia in
response to an increase in exports than other industries, especially for women.
Regarding the findings of the study, Mustafizur Rahman, executive director of the Centre for
Policy Dialogue (CPD), said South Asian nation, particularly, Bangladesh might not be benefited
from the China plus one policy as some other countries like Vietnam and Cambodia are benefiting
from the work order shifts from China.
“We have to take into cognizance the productivity factor of the worker, if we want to export more,”
said Rahman.
The study findings suggest a significant employment generation potential for both males and
females in all four South Asian countries including Bangladesh, India, Pakistan and Sri Lanka for
export to the US markets. However, Sri Lanka is the big winner with respect to EU market.
The study also found that for the US market, a 10 percent increase in Chinese apparel prices would
increase apparel employment in Pakistan for males by about 8.93 percent followed by Bangladesh
4.22 percent, India 3.32 percent and Sri Lanka less than 1 percent.For EU market, a 10 percent
increase in Chinese apparel prices would increase apparel employment in Sri Lanka for males by
8.55 percent, followed by India by 4.30 percent, with Bangladesh and Pakistan experiencing small
decreases.Bangladesh has steadily increased its share of global apparel trade above the world
average and greater than China but lower than that of the Southeast Asian countries.The study
report highlights that Bangladesh needs to improve performance on non-cost factors important to
global buyers.Successfully implementing reforms will help Bangladesh increase exports and
capture more jobs from China’s gradual exit from the clothing market and compete with Vietnam,

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Cambodia, and Indonesia.For the US market, a 10 percent increase in Chinese apparel prices would
increase apparel employment in Bangladesh by 4.22 percent.
6.2 Number of female and male employees in Bangladesh
A growing body of evidence supports the idea that gender equality, particularly in education and
employment, has a positive impact on economic growth. Research indicates that garment work, as
a sector that employs significant numbers of women, has an impact by delaying marriage, reducing
the number of children women have, increasing education, and increasing women’s decision-
making powers at home and in the community. These implications are particularly important for
apparel, given the degree of feminization in the sector. Globally, women represent an average of
68 percent of the garment workforce and 45 percent of the textile sector workforce. The global
apparel sector faces a variety of well-document challenges in relation to its workforce, including
low pay; piece-rate pay and/or failure to pay overtime; health and safety concerns such as fire
safety, exposure to chemicals, and inadequate infrastructure; highly controlled, stressful, and
repetitive work environments; irregular work volume and schedules; lack of access to benefits
such as health insurance and maternity leave; and instances of workplace-based harassment,
violence, and discrimination.
While both men and women are affected by these challenges, women workers tend to be more
vulnerable to these risks than men. Women not only represent the majority of low-skilled, low-
wage workers, but they also face unsupportive norms and power dynamics that place them at a
disadvantage
The number of female employees fell 13.10 percent to 5.07 million in Bangladesh last year
compared to 2013 mainly because of closure of subcontracting businesses in the garment sector,
according to a new survey.The study of the Bangladesh Institute of Development Studies (BIDS)
showed there were 5.51 million female employees in 2013.Four years ago, 32.8 percent females
were employed but their number declined to 28.5 percent in 2016, according to the survey, which
was presented at the BIDS Research Almanac 2017 at the Lakeshore Hotel in Dhaka yesterday.
One of the major factors behind the declining trend of women employment was the closure of
subcontracting in the garment sector after the Rana Plaza building collapse in April 2013, said Md
Iqbal Hossain, research associate of the BIDS.Other reasons are withdrawal of temporary jobs,
especially in urban areas, with the rise of family income. For example, a female worker willing to
work at a lower grade in a factory quits when the income of the increases, Hossain said.Another
reason is the withdrawal of female workers from part-time jobs for different reasons, including
shifting of factories or starting of their own businesses, he said.
However, the number of female workers will rise in the country in the near future, especially in
some specialised sectors such as garment, leather and leather goods, ICT, pharmaceuticals and
toys as these are growing industries, Hossain said.
“The government should introduce training centres following UCEP model so that an adequate
Number of skilled workers can be supplied to the growing industrial sectors.”
UCEP trainings are sector-specific and can be applied to jobs directly, benefiting both employees
and employers, Hossain said after presenting his paper on “labour supply and its changes during
2006 to 2016: focus on gender and regional difference”. Citing data from the Bangladesh Bureau

16
of Statistics, Hossain said employment of female workers in the agricultural sector increased to
63.1 percent in 2016 from 53.5 percent in 2013.Employment of female workers in the industrial
sector decreased to 16.1 percent in 2016 from 23.7 percent in 2013, while it declined to 14.9
percent from 22.5 percent in 2013 in the manufacturing sector.Division-wise, the biggest rise in
the labour force participation by female workers was noticed in Khulna division.In 2016, the
participation of female in jobs in Khulna was 42.2 percent from 26.9 percent previously.
7. Female empowerment in the Bangladeshi garment industry
A slew of industrial accidents have cast the Bangladeshi garment industry in a negative light.
Whilst it is the responsibility of government, factory owners and international brands to do
everything in their power to guarantee decent and safe working conditions within the factories,
more actions can be taken
A slew of industrial accidents such as the Tazreen factory fire and the recent collapse of Rana
Plaza have cast the Bangladeshi garment industry in a negative light, with international media
reporting extensively on the hazardous working conditions.
 Female labor force participation has increased significantly (from 8% in 1983-84 to 36% in
2010)
• The 3.5 million female workers are mostly within the age group of 18-30 years. The RMG
industry is helping them getting empowered.
• Women have become more intelligent, self aware, free and concerned about the society
• Early marriage and early motherhood has dropped;
• Primary education enrolment has increased;

17
• Child and women mortality rate has dropped;
• Improved maternal and child health and nutrition
 Women are on average better savers than men.
 Regular earning
 Workers investments on family pension schemes etc. create savings. 15 years and above had
their own bank accounts.
 A higher proportion of workers (30 percent) had bank accounts in the EPZ. Women are on
average better savers than men.
 Women save about 7.6 percent of their otherwise small income.
7.1 Gender empowerment and the garment industry
Since the 1980s, RMG was the first industry to provide large-scale employment opportunities to
women in Bangladesh, in a country where women traditionally did not work outside their
home. Recent research by Professor Rachel Heath and Professor Mushfiq Mobarak draws
attention to the significant benefits of having access to factory jobs on gender empowerment, even
beyond the income opportunity, from data spanning thirty years in Bangladesh.
Comparing girls living in areas within commuting distance to a factory to both their brothers and
to other girls from villages not within commuting distance, Mobarak and Heath found a systematic
effect of proximity to garment factories on the postponement of marriage and childbirth age. These
effects were even more striking for girls aged between 12 and 18, where early marriage is more
likely to have detrimental effects on a girl’s level of educational achievement and resulting job
opportunities.
Analysing retrospective data, Mobarak and Heath find that roughly 14.8 percentage points of the
national gain in girls’ enrolment rates over that period, can be attributed to the growth in the
garment export industry. The study also highlighted how the proximity to garment factories is
associated with a reduced gender-education gap.
Such evidence sheds some light on how the RMG sector has contributed to female empowerment
across and within Bangladeshi households. As factories open up and economic opportunities reach
villages, households decide to invest in the education of daughters, due to the perceived increase
in returns from schooling in the labour market.

18
Furthermore, as girls find jobs in the garment sector, they tend to postpone marriage and childbirth.
Strikingly, the effect of taking up a job in the garment sector on the postponement of marriage and
childbirth tends to be larger in the households where women had no previous experience of work
outside of home.
Whereas a job in the RMG sector has therefore contributed to the empowerment of women who
had previously been bound to work in their household, empowerment often stops when it comes
to the equality of opportunities within RMG factories in Bangladesh. From data collected within
factories, 4 out of every 5 production line workers are female, whilst just over 1 in 20 supervisors
is a woman. If indeed workers were promoted on the basis of merit, this would mean that currently
95 percent of the managerial talent in factories emerges from 20 percent of the workforce. This
begs the question as to whether it is efficient for factory owners not to invest in women, whilst the
industry suffers from a scarcity of skilled workers.
Recent research has also brought to light how gender discrimination affects the lives of the female
operators and the potential repercussions on the efficiency in the sector. Professors Christopher
Woodruff and Rocco Macchiavello have evaluated a training program that trains female sewing
machine operators to become line supervisors. The study investigates the impact of skill
investment on female workers versus male participants and the effectiveness of female trainees
who are subsequently promoted to supervisory roles. According to the study, vocational training
has positive effects on gender equality as more than half of the female trainees were promoted
after receiving the training.
Different experiment setups that Woodruff and Macchiavello explored suggested that after being
trained, female trainees are as much or even more effective than male supervisors and that there
are no differences between male and female trainees with regards to line-level efficiency,
absenteeism or quality.
However, their research also draws attention to the predominant bias against women taking on the
role of supervisors. Promotion rates for the female trainees in their experiment proved to be
significantly lower than for male trainees and hints of resistance to the promotion of female
operators were detected amongst male colleagues. Hence there is significant evidence that
traditional gender roles perpetuate employment structures within factories and limits the career
prospects of women entering the sector as line operators.
Three quarters of the workforce will remain unskilled without adequate training, further
perpetuating a vicious cycle within factories. Due to the gender bias within factories, women do
not invest in the skills required to become supervisors, as they do not expect to have opportunities

19
for career progress. Male employees on the other hand, enter factories with a significantly higher
expectation of becoming supervisors. It is not surprising then that women initially require more
training en-route to becoming supervisors. With weaker career prospects, women are also likely
to leave when offered better opportunities elsewhere. Consequently, garment factories face high
turnover rates, leading to large costs in terms of resource and efficiency losses. A story emerges
then of an industry that has fuelled economic growth in Bangladesh, yet that has been unable to
exploit its full potential because gender inequality still persists.
8. Challenge
The garment industry in Bangladesh has played a significant role in economically uplifting a large
cohort of poor and vulnerable women. The opportunity to be gainfully employed has served as a
repellent against early marriage and in turn reductions in fertility. Control over income also
provides the women with more decision making power at home, voice in the social sphere and
self-esteem. Today, approximately 80 percent of garment workers are women. Yet, the number
of poor women from impoverished northwestern districts joining the garments sector is much
lower than the number of poor women from other parts of the country. Research has shown that
this is in large part due to lack of awareness, the perceived and real risks regarding migration,
uncertainty about securing a job quickly. One of the main risks cited was of finding safe and
reasonably priced housing upon arrival to urban centres, in the absence of existing networks.
Female garment workers constitute a highly vulnerable group: young, poor, unskilled, sometimes
illiterate, and often single women in a society dominated by strong gender hierarchies.
9. Approach
 The NARI project (nari means women in Bangla) is the first World Bank supported project
of its kind in South Asia. NARI aims to provide training, transitional housing, counselling
and job placement services in garment factories to poor and vulnerable women who will
be recruited from the remote areas of the country, beginning in the pilot phase from the
North-western regions. About 10,800women will be recruited on a self-selection basis
from five districts in northern Bangladesh, namely Gailbandha, Kurigram, Lalmonirhat,
Nilphamari, and Rangpur.
 After screening the selected women will be given an orientation course so they can make
an informed decision about beginning a new life at one of the three dormitories and training
centres (DTCs) near the Export Processing Zones (EPZs) in Dhaka, Karnaphuli or
Ishwardi. The women will be settled into newly built DTCs, with transitional housing
facilities at dormitories and training centres, giving them time to develop social networks
and support systems.
 The training centres will deliver a technical training module and a life-skills training
module to batches of 300 girls per session (per DTC) lasting for two and half months at
each of the three EPZ. The technical curriculum would include training in cutting, sewing,
and quality control. This training will allow women to enter factories as semi-skilled
workers rather than unskilled workers. The trainees will also receive life skill training

20
covering topics such as adjustment to city life, savings and remittances, safety and security,
rights and responsibilities at the work-place, finding appropriate housing and contract
negotiation, health and fertility.
 The dormitories attached to the training centre will accommodate 600 women for a
transitional period of approximately four months at a time. Finally, the women will be
recruited into garments factories at the EPZ and other BGMEA, BKMEA factories through
job placement services available at each training centre that continually assesses the needs
to the labour market and links the beneficiaries to prospective employers.
Expected Results
 Around 10,800 women will gain formal employment in the pilot phase
 2.5 months trainings to the beneficiaries
 4 months transitional housing facilities with free food and security provisions
Towards the Future
NARI is a pilot project which aims to train and place women in factories inside three export
processing zones that have better conditions and safeguards for workers. If the pilot project is
successful, based on a rigorous impact assessment, the plan is to expand it to other parts of
Bangladesh and other sectors.
Basic Information
Approval date October 27, 2011
End date December 31, 2018
Total commitment $29.29 million
Implementing agency BEPZA, Coordinating Ministry: Ministry of Labour and
Employment
10. Conclusion
The barriers to women’s economic empowerment are varied and complex, and interact with
everything from policies and regulation to development agendas, societal norms, and cultural
expectations. The business case for women’s economic empowerment is clear—particularly in
emerging economies where much of the apparel supply chain is located. The apparel sector has
made significant investments and gained valuable insights. Now, it is time to deepen and expand
that work to better address the specific needs of women workers in the global value chain in
collaboration with suppliers, NGOs, international development agencies, and governments. Every
company can take action to benefit women’s economic empowerment in the areas where they have
direct control, such as owned operations and Tier 1 suppliers. Beyond these actions, companies

21
can also use their size and scale to amplify positive impacts and enable other value chain actors
through partnership, incentives, and public communications.
Beyond individual company action, the apparel sector has the opportunity to come together and,
through research, advocacy, and communications, create an environment that supports and
advances women’s economic empowerment. The apparel sector has invested significantly—
perhaps more than any other sector in the world—in supporting women. By taking on the three
challenges identified in this paper— addressing informality, going further to end violence, and
addressing care needs and responsibilities—the apparel sector has a real opportunity to drive the
agenda and inspire others to follow suit on behalf of women workers.

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