Bangladesh Industry veterans expressed the opinion that their country has failed to diversify in terms of export markets and export products over a period of time and the Ready Made Garment (RMG) sector still continues to remain the backbone of the export segment amounting to a staggering 85 percent.
In the currently concluded season of trade, for the year 2016-17, Bangladesh exports registered a bleak 1.35 percent growth, which turns out to be the lowest growth in the past 15 years and odd.
The RMG sector of late has buckled somewhat under pressure of high expectations due to inadequate demand for Bangladesh apparel from both traditional and non-traditional destinations. Analysts pointed out that the growth of the apparel industry has been somewhat slow in the past few years.
The underlying factors as analyzed by the veterans indicated that industrial accidents that were highlighted in foreign media, arrival of efficient competition in the global markets with entries from Vietnam, Cambodia and some African nations have been contributing factors in making the growth in the apparel sector somewhat sluggish.
Though skeptical about the lack of diversification, the veterans commended the Bangladesh textile industry for its achievements in the past four decades after surviving overwhelming odds. It may be recalled that there were doomsday prophecies from market experts once the multi-fiber agreement (MFA) was phased out on the global front. However, the Bangladesh textile industry managed to hold its own against this change and managed to thrive despite the removal of quota for least developed countries and duty free access.
However, the question has arisen time and again on over-dependence on just one stream of items for export and the wisdom of putting all the eggs in one basket. Questions have also arisen about relying on the same set of export destinations and failing to diversify to virgin markets from a long term perspective. On both these counts, there has been pressure from multi-lateral donors and industry experts. For, currently, Bangladesh is heavily dependent on RMG, leather goods and frozen foods to earn their export revenue.
To achieve this end, the government, the stakeholders, namely the businesses have some serious rethinking to do.