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1. Overview of Bangladesh Garment Industry
Agriculture, as the case in India, has been the backbone of economy and chief source
of income for the people of Bangladesh, the country made of villages. Government
wants to decrease poverty by getting highest productivity from agriculture and achieve
self-reliance in food production. Apart from agriculture, the country is much concerned
about the growth of export division. Bangladesh have accelerated and changed her
exports substantially from time to time. After Bangladesh came into being, jute and tea
were the most export-oriented industries. But with the continual perils of flood, failing
jute fibre prices and a considerable decline in world demand, the role of the jute sector
to the country's economy has deteriorated (Spinanger, 1986). After that, focus has been
shifted to the function of production sector, especially in garment industry.
The garment industry of Bangladesh has been the key export division and a main
source of foreign exchange for the last 25 years. At present, the country generates
about $5 billion worth of products each year by exporting garment. The industry
provides employment to about 3 million workers of whom 90% are women. Two non-
market elements have performed a vital function in confirming the garment industry's
continual success; these elements are (a) quotas under Multi- Fibre Arrangement1
(MFA) in the North American market and (b) special market entry to European markets.
The whole procedure is strongly related with the trend of relocation of production.
Displacement of Production in the Garment Industry

2. The global economy is now controlled by the transfer of production where firms of
developed countries swing their attention to developing countries. The new representation
is centred on a core-periphery system of production, with a comparatively small centre of
permanent employees dealing with finance, research and development, technological
institution and modernisation and a periphery containing dependent elements of
production procedure. Reducing costs and increasing output are the main causes for this
disposition. They have discovered that the simplest way to undercharge is to move
production to a country where labour charge and production costs are lower. Since
developing nations provide areas that do not impose costs like environmental
degeneration, this practice protects the developed countries against the issues of
environment and law. The transfer of production to Third World has helped the expansion
of economy of these nations and also speed up the economy of the developed nations.
Garment industry is controlled by the transfer of production. The globalisation of garment
production started earlier and has expanded more than that of any other factory. The
companies have transferred their blue-collar production activities from high-wage areas to
low-cost manufacturing regions in industrialising countries. The enhancement of
communication system and networking has played a key role in this development. Export-
oriented manufacturing has brought some good returns to the industrialising nations of
Asia and Latin America since the 1960s. The first relocation of garment manufacturing took
place from North America and Western Europe to Japan in the 1950s and the early 1960s.
But during 1965 and 1983, Japan changed its attention to more lucrative products like cars,
stereos and computers and therefore, 400,000 workers were dismissed by Japanese textile
and clothing industry. In impact, the second stock transfer of garment manufacturing was
from Japan to the Asian Tigers - South Korea, Taiwan, Hong Kong and Singapore in 1970s.
But the tendency of transfer of manufacturing did not remain there. The rise in labour
charge and activeness of trade unions were in proportion to the enhancement in economies
of the Asian Tigers. The industry witnessed a third transfer of manufacturing from 1980s to
1990s; from the Asian Tigers to other developing countries - Philippines, Malaysia,
Thailand, Indonesia and China in particular. The 1990s have been led by the final group of
exporters including Bangladesh, Srilanka, Pakistan and Vietnam. But China was leader in
the current of the relocation as in less than ten years (after 1980s) China emerged from
nowhere to become the world's major manufacturer and exporter of clothing.
Bangladesh Garment Sector and Global Chain
The cause of this transfer can be clarified by the salary structure in the garment industry, all
over the world. Apparel labour charge per hour (wages and fringe benefits, US$) in USA is
10.12 but it is only 0.30 in Bangladesh. This difference accelerated the world apparel exports
from $3 billion in 1965, with developing nations making up just 14 percent of the total, to $119
billion in 1991, with developing nations contributing 59 percent. In 1991 the number of workers
in the ready-made garment industry of Bangladesh was 582,000 and it grew up to 1,404,000 in
1998. In USA, however, 1991-figure showed 1,106.0 thousand workers in the apparel sector
and in 1998 it turned down to 765. 8 thousand.

3. The presented information reveals that the tendency of low labour charges is the key reason for
the transfer of garment manufacturing in Bangladesh. The practice initiated in late 1970s when
the Asian Tiger nations were in quest of tactics to avoid the export quotas of Western countries.
The garment units of Bangladesh are mainly relying on the 'tiger' nations for raw materials.
Mediators in Asian Tiger nations build an intermediary between the textile units in their home
countries, where the spinning and weaving go on, and the Bangladeshi units where the cloth is
cut, sewn, ironed and packed into cartons for export. The same representatives of tiger nations
discover the market for Bangladesh in several nations of the North. Large retail trading
companies placed in the United States and Western Europe give most orders for Bangladeshi
garment products. Companies like Marks and Spencers (UK) and C&A (the Netherlands) control
capital funds, in proportion to which the capital of Bangladeshi owners is patience. Shirts
manufactured in Bangladesh are sold in developed nations for five to ten times their imported
price.
Collaboration of a native private garment industry, Desh Company, with a Korean company,
Daewoo is an important instance of international garment chain that works as one of the
grounds of the expansion of garment industry in Bangladesh. Daewoo Corporation of South
Korea, as part of its global policies, took interest in Bangladesh when the Chairman, Kim Woo-
Choong, offered an aspiring joint venture to the Government of Bangladesh, which included the
growth and process of tyre, leather goods, and cement and garment factories. The Desh-
Daewoo alliance was decisive in terms of getting into the global apparel markets at significant
juncture, when import reforming was going on in this market following the signing of MFA in
1974. Daewoo, a South Korean leading exporter of garments, was in search of opportunities in
nations, which had hardly used their quotas. Due to the quota restriction for Korea after MFA,
the export of Daewoo became limited. Bangladesh as an LDC got the chance to export without
any constraint and for this cause Daewoo was concerned with the use of Bangladesh for their
market. The purpose behind this need was that Bangladesh would rely on Daewoo for importing
raw materials and at the same time Daewoo would get the market in Bangladesh. When the
Chairman of Daewoo displayed interest in Bangladesh, the country's President put him in touch
with chairman of Desh Company, an ex-civil servant who was seeking more entrepreneurial
pursuits.