Bangladesh’s Readymade Garments (RMG) industry faces several pressing challenges that require immediate attention to ensure sustainable development and competitiveness in the global market.
A recent roundtable discussion, ‘Bunon 2030: Policy discussion,’ highlighted three critical challenges confronting the RMG sector and proposed actionable strategies for navigating these hurdles effectively.
Organized by LightCastle Partners and Policy Exchange Bangladesh, the roundtable discussion emphasized the imperative of addressing the following challenges:
- Decarbonization: The RMG industry must prioritize decarbonization efforts to reduce carbon emissions throughout the value chain. As global awareness of environmental sustainability grows, consumers increasingly demand eco-friendly products. Therefore, adopting environmentally friendly practices will enhance the industry’s reputation and ensure compliance with international standards.
- Transition from LDC status: Bangladesh’s impending transition from the list of Least Developed Countries (LDCs) poses significant implications for the RMG sector. Loss of trade benefits, such as the Generalized Scheme of Preferences (GSP) and rising wages, necessitate proactive measures to mitigate adverse effects. Policymakers must devise strategies to facilitate a smooth transition, including diversifying the export basket and investing in sector-specific initiatives beyond RMG.
- Impact of Automation Technology: The advent of the fourth industrial revolution (4IR) introduces automation and artificial intelligence (AI) technologies that could potentially disrupt traditional manufacturing processes. Reskilling and upskilling initiatives are paramount to mitigate job displacement and equip workers for the digital age. Investing in human capital development will enhance workforce productivity and ensure the industry’s competitiveness in the evolving landscape.
Key stakeholders from government bodies and industry associations, including the Ministry of Commerce, Bangladesh Investment Development Authority (BIDA), and Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), participated in the discussion. Their insights underscored the collaborative efforts required to address these challenges comprehensively.
In response to the identified challenges, stakeholders proposed actionable recommendations:
- Product-based business model: Policymakers should encourage export basket diversification and incentivize sector-specific initiatives to reduce reliance on the RMG sector.
- Export-oriented policies: Consultation with stakeholders can inform the development of export-oriented policies tailored to the apparel sector’s needs, fostering sustainable growth and competitiveness.
- Incentives for fiber production: Introducing duty-free access to import raw materials, particularly for Man-Made Fibers (MMF), can stimulate diversification in fiber production and bolster the industry’s resilience.
