Exploring the Potential of Bangladesh Ready-Made Garments to The Global Market Particularly in Advanced Nations Including US, UK and EU (GC01435)
Introduction
According to a report by World Bank (2016), China is number one where Bangladesh is second for ready-made garments export to global markets. However, after the introduction of the China Plus-One Policy by advanced nations the export in China has been declining. On the other hand, Bangladesh’s garment industry has been growing up dramatically despite the world economic crisis of 2009 (World Bank, 2016). The key reasons are Bangladesh can make garments products at cheap prices due to low labor cost, low raw material cost, duty-free access of garments products, etc. In consequence, the investors are now deeply thinking to take this advantage of the Bangladesh garment industry following the China Plus-One Policy.
However, the recent deadly incidents including garment factory collapse and fire in a garment factory in 2016, political violations and unrests, labor strikes and labor violations, etc in Bangladesh garment industry has brought global attention giving pressure to foreign investors including the US and EU to respond by using their financial weight to enact change. These issues have made conscious for both foreign investors and Bangladesh garments manufacturers.
The researcher believes this study will be helpful not only for the Bangladesh garment industry but also for foreign investors. On one side, the Bangladesh garment sector will get proper guidelines on how to improve the industry and attract more foreign investment. On another side, the investors will be able to make the right decision to invest in the Bangladesh garment industry in comparison with China.
Research Background
Bangladesh has shown incredible success in its ready-made garment sector over the last two decades (OSHE, 2012). The dependence on the Bangladesh garment industry has been growing dramatically from only 48 garments factories in 1983 (Statistical Year Book of Bangladesh, 2008) to over 5000 garments factories now (BGEMA, 2016). It has surpassed the most positive expectations including economic and social development exporting its huge amount of garments products at cheap prices over the world (AMRC, 2012). According to IMF world economic outlook database (2010), in comparison with China, Bangladesh has been able to make the sure low cost of production with its low wages overheads in its ready-made garments sector. It also ensures and certifies the infrastructural facilities. These opportunities might attract the eyes of foreign investors to invest in Bangladesh (Tour to Bangladesh.com, 2012). On the other hand, given the risk of investing in China disclosed by the SARS pandemic (2009), foreign investors from advanced western countries including the US and EU have carried out a “China-plus-one” policy of relocating their production facilities, investment and operating headquarters in South-Asian countries other than China. It has stimulated a fad to foreign investors to invest their capital in the Bangladesh garment industry (Taipei Times, 2012). As a result, it is time for Bangladesh to assess the capability of its ready-made garments industry to attract more foreign direct investment offering an alternative to China.
3.2 Aim and objectives of the research
3.2.1 Aim
The focus of this research is to investigate the market position of the garments industry of Bangladesh to recommend strategies for Bangladesh garments manufacturers to improve their exports and attract a significant amount of foreign direct investment (FDI)
3.2.2 Objectives
- To review the current literature on micro and macro-environmental analysis to determine suitable models for the application to the garments industry in Bangladesh.
- To critically evaluate the market position of the Bangladesh garments industry
- To compare and contrast the position of the Bangladesh ready-made garments industry with its competitors mainly China
- To recommend key strategies to Bangladesh garments manufacturers to exploit the opportunities for improved foreign direct investment (FDI)
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