Photo: Collected
The country's ongoing uncertainty due to the students' quota reform movement and the complex political climate is now affecting the export-oriented industry, particularly the ready-made garments (RMG) sector. This may result in losing its current second-place ranking.
Over the last two decades, Bangladesh has maintained its second position, surpassing Vietnam and even outpacing China in exporting knit items to the EU market.
Unfortunately, the ongoing unrest at home is contributing to potential losses in export earnings and the possible loss of the second position, harming the country’s image and reliability among buyers. Already, due to the global economic slowdown, exporters have lost 35 to 40 percent of global work orders and fear cancellations of consignments and delays in payments.
Experts think that the government has already lost substantial remittance. If exports lag, the country’s economy will fall into a danger zone.
Dr. Ahsan H. Mansoor, executive director of the Policy Research Institute, told Daily Messenger, “Remittances have decreased due to the political situation. But if exports are also hampered long-term, it will be a terrible thing.”
He also mentioned that money launderers become active when the political situation worsens. As a result, expatriates will send money through informal channels, meaning no dollars will enter the country, which will negatively impact the economy.
In 2023, Vietnam earned $41 billion, gaining the third position, while Bangladesh earned $43.85 billion in a very tight contest. Sadly, in the ongoing unrest, Bangladesh loses $160 million daily. Even after 16 days, the ports and transport have not resumed smoothly.
Vietnam’s textile and garment products have been exported to 104 countries and territories this year – a record number, said Chairman of the Vietnam Textile and Apparel Association (VITAS), Vu Duc Giang.
Bangladesh earned $11.6 billion in the first quarter of 2024, while Vietnam, the prime competitor of Bangladesh, exported $11 billion worth of apparel products despite downbeat markets.
Meanwhile, Bangladesh fetched $47 billion during the 2022-23 fiscal year, growing by 10.27 percent. However, in the 2023-24 fiscal year, Bangladesh gained only 2.85 percent (till July-May).
“Bangladesh has become a dependable apparel sourcing country. We have adequate infrastructure and a workforce to handle any size of work orders, which helps us survive in adverse situations. But if the situation prolongs, our position may be impacted,” S. M. Mannan Kochi, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), told the Daily Messenger on Monday.
“We are producers of fast fashion, which is regular wear and cheap, but Vietnam produces high-end products. If we cannot export regularly, we may lose our place,” Muhammad Hatem, executive president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said.
The average monthly export of Bangladesh in the first six months of the year is $3.94 billion, compared to Vietnam's $3.78 billion. However, July’s monthly export is likely to fall below $3 billion.
Khandakar Golam Moazzem, senior research fellow at the Centre for Policy Dialogue (CPD), said, “Bangladesh will see good times soon as China will increase sourcing from Bangladesh next year. China wants to phase out from cheap RMG. So, whenever the situation improves, the garment sector will receive a boost in work orders.”
Moreover, the average monthly wage for textile workers in Vietnam is around $300, considerably higher than in Bangladesh ($95), Cambodia ($190), and India ($145). This is a key challenge for Vietnam’s textile industry to stay competitive, so Bangladesh will survive due to its lower wages.
The Vietnam Textile and Apparel Association (VITAS) has announced a target to earn $44 billion from textile and apparel exports next year amid positive developments witnessed in the last quarter of this year, while Bangladesh aims for $52.27 billion.
Normally, Bangladesh exports cotton-based products like T-shirts, sweaters, blouses, underwear, and denim.
Currently, Bangladesh is the second-largest garments exporter in the world after China. Bangladesh is also the largest denim exporter to the USA and the largest cotton exporter to the EU.
Messenger/Disha
