Abstract
The ready-made garment (RMG) sector of Bangladesh has gained global recognition, competitiveness and has significantly contributed towards national growth. This paper aims to scrutinize the factors that enabled the sector in achieving this position by applying the Porter’s diamond model of national competitiveness. The paper reviews a good number of existing literatures and data sources to evaluate the national diamond. The findings suggest that though low-cost human resources under factor conditions have extensively contributed towards the sector’s competitiveness, the other three elements of the diamond (national demand conditions, related and supporting industries, firm structure and management) were either dormant or not very active. The study puts forward the notion that nations can achieve global competitiveness in a sector even if the national diamond is not strong enough.
Highlights
Bangladesh, a nation once labeled as “basket case” by former US secretary of state Henry Kissinger (The Economist, 2012), has paved its way to the “ 11”, a group of eleven emerging economies that are predicted to become the BRIC (Lawson, Heacock, & Stupnytska, 2007)
This paper aims to investigate the factors that led towards the creation of its competitiveness in the global arena by applying the Porter’s diamond model of national competitiveness
At the prevalent rate of US$ 1 = BDT 85, the range stretches from US$ 8.35 to US$ 12.72 per month. Considering this scenario at present, it is not difficult to estimate the poor spending pattern that existed in the past. This puts forward another strong ground to contend that the competitive advantage of Bangladesh’s ready-made garment (RMG) sector did not result in from home demand conditions
Summary
Bangladesh, a nation once labeled as “basket case” by former US secretary of state Henry Kissinger (The Economist, 2012), has paved its way to the “ 11”, a group of eleven emerging economies that are predicted to become the BRIC (Lawson, Heacock, & Stupnytska, 2007). It is the primary source of export earnings, and solely contributes 84.21% towards total export earnings of the nation (BGMEA, 2020). According to recent trade statistics, Bangladesh is the second largest apparel exporting nation after China (World Trade Organization, 2019). Due to the heightened importance of the sector on national economy and its triumph in attaining competitiveness, it is critical to study the factors that laid the foundation. Most of the studies in the past examined the factors explicitly, and do not provide a comprehensive understanding of the sector. The paper aspires to provide a comprehensive outlook on the sector and mitigate the existing gap
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