Growth Trajectory and Developmental Impact of Ready-Made Garments Industry in Bangladesh

Abstract

Two external sectors, namely the ready-made garments industry (RMG) and remittances, have hugely contributed to the development of Bangladesh. In fact, the RMG sector has become the single largest source of trade earnings by generating over 80 percent of the export total. Not only that, presently, more than 4 million employees are engaged in this sector. Indeed, the RMG industry in Bangladesh has made it possible to create paid employment opportunities for a large cohort of poor and vulnerable women. Hence, stock-taking of this sector provides not only the impetus for policy analysis perspective but also guiding notes for other emerging sectors. Against this backdrop, this chapter unpacks the story of the “development case” of the RMG sector in Bangladesh—its historical evolution, major challenges, and measures to overcome those challenges. It also discusses the growth pattern as well as the impact of the industry on employment creation, women’s empowerment in the society, the introduction of backward and forward linkage sectors, and poverty reduction in Bangladesh. The chapter also specifies the challenges of this industry and points out the measures to overcome them for the sustainability and growth of the industry. Lastly, the chapter spells out the future of this industry.