Garment Export Research Articles

The Relationship of the Macroeconomic Variables with the Growth of Garment Industry in Bangladesh

In this research paper, we have tried to find out the relationship between the growth rate of garment industry and the macroeconomic variables. And for this we have conducted three types of analysis. First one is quantitative analysis; a second one is qualitative analysis, and the last one is a beta concept. Quantitative analysis has covered graphical presentation and multiple regression analysis. The graphical presentation just provides an overall idea about the relationship of variables, but it is an abstract concept. In case of regression analysis, we have used one dependent variable that is the growth rate of garment industry and seven independent variables those are growth rate of real GDP, the unemployment rate, inflation rate, interest rate, level of stock market, exchange rate. And stata-10 software has been used to run the regression model. After running the programmed it is seen that there have some econometric problems. By using the logarithm, we have solved those problems. A multiple regression analysis has been made to know the extent to which these variables affect the garment export growth rate. From that analysis, it has been found that about 70% variations in the growth rate of garments export can be defined by these variables. Then an equation for predicting future garments export has been constructed. Qualitative analysis has encompassed economic and political issues. After this, for knowing the individual effect of the variables, a beta concept has been employed and from that analysis it has been found that no variable affect garments export to a large extent. At the end of the analysis it can be said that, individual effect of the macroeconomic variables on the growth rate of garments export is not much but when they are combined, they can influence the garments export growth rate. As they are also related with each other which means change in one macroeconomic variable may change all the other variables. Therefore, a combined effect always remains. So, we can say that macroeconomic variables influence the garment industry of our country but not to a great extent.
 JEL Classification Code: E60, M10, L67, O14

Inflation volatility, economic growth and monetary policy in Bangladesh

This article provides an overview of the trends and movements of CPI-inflation in Bangladesh since the early 1950s and examines the key issues in rule-based monetary policy for price stability, implying low and stable inflation, in this country. Under a fixed exchange rate system, inflation in Bangladesh was moderately high and volatile during the 1950s and 1960s. Since the country’s independence from Pakistan in 1971, inflation in Bangladesh has remained moderately high on average and highly volatile and persistent under a fixed-pegged exchange rate system or under a managed floating system since 2003. Using data from the early 1970s or earlier depending on data availability, the article undertakes both Granger-causality and the structural vector autoregression (SVAR) analysis with two models. The first model is comprised of such variables as inflation, the real interest rate, the real exchange rate and output growth, and the second model is comprised of the volatilities of money growth, real output growth and inflation. Then, based on the empirical findings, the article concludes that a rule-based monetary policy, namely monetary targeting or inflation targeting, remains appropriate for Bangladesh provided that it adopts a more flexible, if not freely floating, exchange rate system. The article suggests that the use of monetary policy to achieve multiple objectives under a fixed-pegged exchange rate system creates a time-inconsistency problem, reduces monetary policy credibility and makes it (monetary policy) ineffective in lowering inflation and its volatility. Low credibility of monetary policy in particular raises inflation persistence. Within the present monetary-policy framework in Bangladesh, the article illustrates how the fixed-pegged exchange rate system has generated money growth volatility in the presence of large-scale inflows of overseas workers’ remittances and readymade garments export earnings. This does not seem to be a concern of the central bank of Bangladesh (Bangladesh Bank); rather, it (Bangladesh Bank) pursues monetary-base targeting to keep inflation low and stable after considering economic growth. The consequent diminishing credibility of monetary policy has kept inflation volatile and persistent, which has adversely affected economic growth.

Framing a Comprehensive Policy to Spur Industrialisation

Bangladesh adopted free market economy in late 80s. Opening up its market to foreign investment the government is trying to assist the private sector in playing a vital role in industrialisation and employment generation with a view to alleviating poverty. The government and the private sector worked hand in hand in promoting export-oriented readymade garment (RMG) units and it became the largest foreign currency earning sector of the country. The government allowed back-to-back letter of credit (LC), bonded warehouse facility and many more to assist the garment factory owners. But after three decades of the RMG sector's inception none of the other sectors is coming forward to back it. Experts forecast few sectors were awaiting takeoff during the last decade. For example, we have export potential of our leather goods sector, ceramics products, pharmaceuticals, shipbuilding, jute goods, home textiles, agro-processed products, information and communication technology (ICT), light engineering products, frozen food, handicrafts etc. Bangladesh has a domestic market of about 160.4 million (16.04 crore) people and the easy access to two largest markets of the world-India with 1.27 billion people and China with 1.36 billion people. Bangladesh has free trade agreements with India through SAFTA, BIMSTEC and negotiating more free trade agreements with India and China under the Asia Pacific Trade Agreement (APTA). India is offering duty-free market access to a long list of Bangladeshi products as a least developed country (LDC). With economic development the local people's purchasing power is also increasing in the domestic market. Therefore, Bangladesh has every potential to be an industrialised country, if a comprehensive legal framework is developed.

Preferential Trade Treatment and Industrial Development

The garment industry is important for Cambodia's economy not only because it generates noticeable export earnings and employment, but also because it contributes significantly to the economic growth of the country. Due to the bilateral trade agreements that exist between Cambodia and the USA, the majority of Cambodia's garment exports are destined for the US market. The European Union (EU) has also given preferential treatment to Cambodia's export of garments and this is expected to lead to an increase in the volume of Cambodia's export of garments to the EU. Thus, the case of Cambodia indicates that preferential treatment by developed countries may contribute significantly to the export expansion and economic growth of a developing country. In terms of foreign direct investment (FDI) inflows, China has played a leading role. China's investment in Cambodia's garment industry has enabled a strengthening of production capacity.

Impact of World Trade Organization on Indian Textile Industry

<p>No country in the world is self-sufficient. Therefore, there is need to trade with others. Economy was protected from external competition due to licensing system and high level of tariff.</p><p>In early 1990's with the birth of World Trade Organization (WTO) India started the process of liberalization of trade. WTO's objective is to ensure new open world trading system to benefit consumers. The Most Favoured Nation clause of WTO was in clash with the Multi Fibre Agreement (MFA), which placed quantitative restrictions on textile exporting countries. Hence MFA was gradually phased out by December 31, 2004.</p><p>The phasing out of Multi Fibre Agreement (MFA) was expected to result in an increase in the growth of output, efficiency, productivity and competitiveness of the textile sector.</p><p>The impact of abolition of MFA is studied with regard to export of yarn, fabric, and garments during MFA and Post MFA period. It has been concluded from the observations that the export of textile intermediates (i.e. yarn and fabric) and textiles and clothing have increased substantially after the abolition of MFA.</p>

Improving Working Conditions in Garment Supply Chains: The Role of Unions in Cambodia

AbstractGiven the disappointing outcomes of private regulation of labour in global supply chains, worker organization is increasingly seen as the key to better working conditions. This article examines the extent to which unions impact different dimensions of labour standard compliance in Cambodia's garment export sector, where unions have grown considerably. Based on unique factory‐level data and field‐based interviews, this study shows that union presence improves factories’ compliance with wage, hours, and leave standards, although the impact is much less significant for health and safety. Moreover, having multiple unions in the workplace does not appear to improve labour conditions.

Fire at Tazreen Fashions: fixing responsibility in a global supply chain

Synopsis The case describes the evolution of Bangladesh's garment industry, the second largest garment exporter in the world, and its operational problems. The focus is on the fire that occurred on November 24, 2012 at Tazreen Fashions, a unit that is a part of a global supply chain for US and European retailers. The case explores the role of the government, western retailers, industry association and NGOs subsequent to the fire, and shows how increasing CSR expectations of corporations are making them take on responsibility for what should be that of the government or the garment unit. Research methodology Secondary sources; published materials. Relevant courses and levels International Business, Business and Society, Supply Chain Management, Doing Business in Emerging Markets. Theoretical basis Corporate social responsibility stakeholder theory market entry.

Indian garment export industry: an overview

This paper examines the current scenario of Indian Garment export industry, its current trends and available opportunities Its major objective is to identify the current marketing strategies adopted by garment exporters and shortcomings of these strategies. From a population of so many registered garment export houses in Delhi, NCR and Jaipur a simple random sample of 100 respondents was selected for the study. The major instruments for data collection were the structured questionnaire and the interview methods. Data were analyzed and it was observed that the Indian industry has many of the necessary requirements to operate a successful fashion industry. India is losing out in International competition. From being 3rd largest Garment Exporting Country it has lost its position and is now ranked as 7th largest RMG Exporter

Garment Export Industry of India - A Comparison of Pre and Post Liberalization Performance

Garment industry developed in India, in real sense, from 1970 onwards. From a modest beginning in the ‘70s, it has grown into a gigantic industry spread over the entire country. It contributes significantly to employment generation and export earnings; besides meeting the domestic demand for clothing. The Indian Garment Export Industry’s competitive strength was restricted by multi-Fiber Arrangement (MFA) Quotas. Economic reforms were initiated in India in the year 1991, commencing the process of de-licensing, debureaucratization and de-reservation. The far-reaching changes initiated were expected to be reflected in increased exports of all the commodities and more specifically in the rise in the growth rate of Readymade Garments (RMGs), the subject of this study. The present study is exploratory in nature. An attempt has been made in this study to analyze the industry’s export performance during the study period (1981-82 to 2000-01). As it is possible to divide this period conveniently into pre and post-liberalization periods (1981-82 to 1990-91 and 1990-91 to 2000-01) respectively, an attempt is made to compare the export performance of the industry during these two sub-periods. An analysis of the performance of the industry as attempted in this study indicated that the expected improvement of its performance did not materialize in the post-liberalization period. This has been obvious from the fact that, while the growth rate of export of RMGs had declined in post-liberalization period, the rise in the share of export of RMGs in textile exports had also not been very significant.

DETERMINANTS OF LABOR-INTENSIVE EXPORTS BY THE DEVELOPING COUNTRIES: A CROSS COUNTRY ANALYSIS

It is widely acknowledged that the export-oriented garment and textile industries have been playing important role on the overall economic development in developing countries. However, the performance of the developing countries in exporting garment and textiles is in fact, highly heterogeneous. While some of the developing countries such as, China, Vietnam and Bangladesh have been highly successful in exporting highly labor-intensive garment and textiles products, not all of the developing countries have been equally successful in doing so. Using cross-country panel data, an attempt has been made in this paper to ascertain the importance of infrastructure and business environment in explaining the heterogeneous performance in exporting garment and textiles by the developing countries. The paper empirically demonstrates that in addition to the availability of cheap labor, the availability of basic infrastructure, and a business friendly environment significantly affect the export of labor-intensive garment and textiles by the developing countries. The paper, thus, suggests to invest on infrastructure, and to develop a business friendly environment in developing countries to strongly link the growth potentials of labor-intensive products and economic growth.

Interwoven threads: Building a labour countermovement in Bangalore's export-oriented garment industry

This paper approaches globalisation as a contradictory and dialectical phenomenon, one in which the tools of exploitation are being subverted into instruments of labour resistance. Through a study of the Garment and Textile Workers' Union (GATWU) the paper observes how feminised workplaces are bringing to the fore issues of gender oppression, flexible conditions are expanding union organisational capacity and the universality of capital has led to transnational links between workers. While the global neo-liberal regime weakens traditional paths to unionisation, it has concurrently facilitated alternative strategies of worker organisation and resistance. GATWU members both battle immediate economic issues while transforming worker organisation from an atomised factory workstation, to assembly line, to outside the factory gates, and finally into social movement and transnational spaces. The research takes note of how GATWU's organising strategy both compliments and conflicts with struggles of gender and class, the local and global.

Main Factors Influencing the German Buyers’ Satisfaction in Sourcing Ready-Made Garments from Egypt

Germany is the largest importer of clothing in Europe. 67% of all imports derived from countries outside Europe. Now Egypt is still not among the largest Suppliers to Germany, in spite of the importance of textiles and Apparel industry to the prosperity of Egyptian economy. The contribution of this study is presented in determining the most important selection criteria affecting the German buyers ‘decision in sourcing Ready Made Garments from overseas countries such as Egypt. These considerable selection criteria have been used to assess the satisfaction level of German Ready Made Garments’ buyers, who have previous experience in sourcing from Egypt. It is found that the most important main selection’ criteria, that influence the German Ready Made Garment’ buyers decision, included: the People in the first rank with average importance rate of 27.8 %, Production in the second rank with a percent of 25.9%, then come the delivery performance in the third rank with a percent of 25 % and lastly the product in the fourth rank with 21.2%. Under these main selection criteria, further twenty sub- criteria have been also developed. The satisfaction survey results showed that 38% from the sample surveyed (the German Buyers) expressed their satisfaction of the outcome in dealing with Egyptian Garments suppliers, 30% from the buyers were natural , and 32% were not satisfied with the product and services offered to them. Further recommendations regarding improving the performance of Egyptian readymade garments factories have been also collected and presented. This study could be further utilized as a guiding tool to enhance the competitiveness level of Egyptian garment production, and to increase its tendency to become potential suppliers for foreign German retailers, thus increasing the volume of Egyptian Ready Made Garment export to Germany.

Corporate Social Responsibility in Garment Sourcing Networks: Factory Management Perspectives on Ethical Trade in Sri Lanka

With complex buyer-driven global production networks and a labour-intensive manufacturing process, the fashion industry has become a focal point for debates on the social responsibility of business. Utilising an interview methodology with influential actors from seven export garment manufacturers in Sri Lanka, we explore the situated knowledge at one nodal point of the production network. We conceptualise factory management perspectives on the implementation of corporate social responsibility (CSR) in terms of the strategic balancing of ethical considerations against the commercial pressures of cost and lead time. Factory managers framed CSR in terms of compliance, rather than going above and beyond regulatory requirements; seeing it as a strategic competitive imperative and less a developmental mechanism. Sri Lankan manufacturers maintain that they have benefitted from a unique combination of factors, including strict national labour laws, an educated workforce, the characteristics of the garments produced, industrial upgrading, and long-term non-adversarial buyer–supplier relationships, which they argue has supported the establishment and maintenance of CSR practices. The paper thus provides managerial implications that relate CSR activities to CSR outcomes which include both reputational and production benefits. Such insights will be of strategic relevance for lead retail buyers as well as apparel producers keen to invest in CSR to partly mitigate against increasing price-based competition.

Vietnam’s Second Revolution

Vietnam’s Second Revolution

Indian Garment Clusters and CSR Norms: Incompatible Agendas at the Bottom of the Garment Commodity Chain

Today, India is an important player in garment export. Production is highly “localised” and scattered across the subcontinent. It is organised in industrial clusters, with distinct production and labour practices and product specialisations. Product cycles involve numerous ancillary activities, and are often decentralised from main urban tailoring hubs. They connect different realms and spaces of production and labour, and different clusters. This paper explores how this organisational layout severely limits the impact of old and new corporate social responsibility (CSR) labour projects and regulations. It does so by looking at the case of the National Capital Region and one of its satellite embroidery centres, Bareilly, in Uttar Pradesh. In particular, it reveals the contradictory nature of new CSR projects focusing on homeworkers. The arguments developed here are not only a criticism of global buyers' approaches to labour standards. They also more broadly question the ability to elaborate meaningful standards within decentralised production regimes, deconstructing over-optimistic images of India as a “rising power”.

What Next after Rana Plaza: Progress in the Garment Industry?

REPORT ❐ TO FOLLOW thus uniting trade unions representing workers in all of the global manufacturing industries. Staff and affiliates of the ITGLWF were concerned that the priority needs of workers in ‘our’ industry might be lost in the process of merger into IndustriALL. However the ground-breaking achievements reacting to Rana Plaza and other vital work including achieving significant minimum wage gains in Cambodia has dispelled any doubts about the prominence of the garment and textile sector inside IndustriALL. The creation of IndustriALL enabled the weight and resources of the larger organisation to work on these campaigns and achieve historic progress. The Accord is doing impressive remediation across the industry in Bangladesh. They have identified thousands of fire and safety risks and closed down dangerous factories. Another Rana Plaza could have already happened without this work. Following the Rana Plaza collapse IndustriALL worked tirelessly to bring the brands and suppliers to the bargaining table with national and international trade unions and NGOs. Worker representatives led by IndustriALL and UNI Global Union together with their Bangladeshi affiliates succeeded in negotiating a strong agreement in the form of the Accord on Fire and Building Safety in Bangladesh. Until Rana Plaza only two brands had been prepared to sign; PVH, the owner of Calvin Klein and Tchibo a German retailer. The Accord has now been signed by 180 international brands and numerous local trade unions. The ILO acts as the independent chair of the Accord. The Accord is legally binding, a feature which is in contrast with the plethora of voluntary corporate codes of conduct and multi-stakeholder standards. Under the terms of the Accord signatory brands are each obliged to contribute up to US$500,000 per year towards costs of implementing the terms of Accord. Crucially the Accord includes a central role for trade unions in the provision of safety training as well as in the governance of the programme including membership of factory safety committees. The Accord is managing a huge programme of independent and credible inspection together with effective and timely remediation. Key issues for the future ■ Bangladeshi employers and Government have hitherto conspired to deny workers their rights to freedom of association and collective bargaining. It remains a huge challenge for trade unions to take advantage of the space offered by the Accord to build effective factory level trade unions in every one of the 4,000 factories producing garments for export. What Next after Rana Plaza: Progress in the Garment Industry? IndustriALL affiliates have organised nearly 40,000 workers, but this is barely one percent of the total workforce: organising remains a top priority INTERNATIONAL union rights Page 24 Volume 21 Issue 4 2014 STEVE GRINTER was Education Secretary with the International Textile Garment and Leather Workers’ Federation (ITGLWF) from 1994 to 2012. He is now retired F our million largely female Bangladeshi garment workers risk their lives every day in the production of cheap garments for European and US markets. The collapse of the Rana Plaza factory in Savar, Dhaka in April 2013 was exceptional only in the fact that there were 1,200 fatalities. The Spectrum Factory also in Savar collapsed in similar circumstances in April 2005 killing 62 workers and seriously injuring 70 more. Workers in the 4000 plus garment export factories are not only at risk from their factories collapsing but also from fire. Hundreds of factories are located in shared-use premises with enterprises such as shops and restaurants. This compounds hazards of fire and limits the chance of escape. The Garib fire in 2010 killed 21 workers ; it was the second fire at the factory within 6 months. Employers have become skilled at presenting to buyers and social auditors a false impression of ‘compliance’ with buyers’ (often pathetically weak) corporate codes of social responsibility. In particular wages and timekeeping records are routinely works of fiction for presentation to auditors. The grim reality for workers is a different story comprising excessive working hours including forced overtime, unachievable production targets, brutal repression and above all denial of all trade union rights. Even today wages remain pitifully low; currently the minimum wage in the readymade garment industry is 5300 Taka or euro 54 per...

The Relationship between Work Motivation, Burnout and Intention to Leave for the Middle Level Managers of Garment Industry (A Case Study of Indian Garment Industry)

Middle level managers are expected to play a critical role in translating organizational policies and strategies into practice and action. They have an important role in providing information/input to strategy formulation, and in motivating and energizing employees at lower levels but studies in some large Indian organization in both the public and the private sector show that these managers themselves feel like “victims” and experience a sense of powerlessness in their organizations; they are the ones who express the most negative emotions about any organizational change effort; they feel a sense of stagnation in terms of real personal and professional growth in spite of receiving promotions at fairly predictable intervals; they assume a ‘spectator’ rather than an ‘actor’ stance in the organization; and they do not see themselves as a part of the “real” management. As a result, the middle and senior management performance remains far below the potential. Taking into consideration the importance of middle managers in the organization and a critical review of literature which revealed that the study on work motivation, burnout and intention to leave has not been conducted so far on the middle level managers of garment industry of Delhi and NCR (India), the researcher found a gap to be filled by conducting an investigation on this sample for the variables in question. So the sample of the present study consists of the middle level managers of garment industry of Delhi and NCR (India).Thus, a convenient sampling method was used for drawing the sample from 60 garment export houses of Delhi and 40 of NCR (India).This paper gives a deep insight of work motivation, burnout and intention to leave for the middle level managers of the garment industry of Delhi/NCR (India). In this paper the researcher has checked the relationship of all dimensions of work motivation with the dimensions of burnout and intention to leave and have observed that all dimensions of work motivation have some more or less relationship with each dimension of burnout and intention to leave.

The Relationship between Work Motivation, Burnout and Intention to Leave for the Top Level Managers of Garment Industry (A Case Study of Indian Garment Industry)

Managers play an important role in organizations. They are the persons who formulate and implement policies, plans etc in the organization. Managers are the first to be contacted for suggestions with regard to overall information about the organization. Taking into consideration the importance of managers in the organization and a critical review of literature which revealed that the study on work motivation, burnout and intention to leave has not been conducted so far on the top level managers of garment industry of Delhi and NCR, the researcher found a gap to be filled by conducting investigation on this sample for the variables in question. So the sample of the present study consists of top level managers of garment industry of Delhi and NCR. Thus, a convenient sampling method was used for drawing the sample from 60 garment export houses of Delhi and 40 of NCR. This paper gives a deep insight of work motivation, burnout and intention to leave for the top level managers of the garment industry of Delhi/NCR. In this paper we have checked the relationship of all dimensions of work motivation with the dimensions of burnout and intention to leave and have observed that all dimensions of work motivation have some more or less relationship with each dimension of burnout but neither of the dimensions of work motivation or total work motivation have any relationship with intention to leave. So even if top level managers leave their current job they don’t leave because of lack of work motivation.

‘Greater Chinese’ Global Production Networks in the Middle East: The Rise of the Jordanian Garment Industry

ABSTRACTThe expansion of ‘Greater Chinese’ capital from mainland China, Hong Kong and Taiwan into other parts of the developing world is increasingly noted. It is especially prominent in sub‐Saharan Africa where Greater Chinese investments, firms and workers are found across a wide range of activities, from the extractive commodity sectors, to infrastructure projects, agriculture and manufacturing. One region where Greater Chinese investment is less well studied is the Middle East. This article focuses on the case of Jordan. Jordan has rapidly emerged as an important supplier of apparel to the United States, a consequence of a distinct preferential trade agreement. The article charts the ways in which this preferential trade agreement has stimulated the shifts of Greater Chinese garment manufacturers to Jordan. Using a global production networks (GPN) framework, and drawing on primary and secondary evidence, it assesses the dynamics behind Greater Chinese investments into Jordan; it also explores the ways in which Greater Chinese garment producers operating in Jordan organize their supply chains and are linked into the global garments GPNs. Finally, it considers the relationship between such capital flows and the influx of Asian migrant workers into the Jordanian export garment sector.

AN ANALYSIS OF EXPORT AND IMPORT GROWTH OF BANGLADESH:

This paper attempts to identify the challenges of ready-made garment (RMG) exports of Bangladesh. Descriptive analysis was used to analyze the export challenges of Bangladesh. It has been identified that Bangladesh highly depends on ready-made garment (RMG) exports for its foreign exchange earnings. In spite of great challenges, the country became the world’s second largest exporter of garment goods to the European Union. It also exports a significant amount of goods to the United States. This study identified that the country would lose its buyers if it delayed to take necessary actions for the recent crisis created in this industry. The buyers are warning the country to take immediate steps to solve the crisis. Otherwise, Bangladesh maybe deprived of getting the benefits of Generalized System of Preferences (GSP). To bring back the confidence of the buyers, Bangladesh has to act quickly and promptly by introducing new labor laws for the garment workers.