Contents:

Summary Introduction Development of the textile and apparel industry Importance to the economy Geographical, Political and Economic Profile Geographical profile Political profile Economic profile Infrastructure Energy Customs stations and land ports Sea ports Telecommunications Roads Inland waterways Airports Export processing zones Human Resources Development of the Textile and Apparel Industry Textiles Garments Structure of the Textile and Apparel Industry Textiles Garments Products and Markets Production Trends Textile and Apparel Exports and Imports Exports Imports Foreign Direct Investment Government policy and the investment environment Investment incentives Trends in investment levels Export processing zones Trade Agreements, Tariffs and Quotas Competitiveness of the Bangladeshi Textile and Apparel Industry: Strengths and Weaknesses, Opportunities and Threats Strengths Weaknesses Opportunities Threats Future Prospects List of tables Table 1: Bangladesh: political and economic profile, 2002 Table 2: Bangladesh: macro-economic indicators, 1998-2002 Table 3: Bangladesh: structure of the textile industry by sector, as at June 2000 Table 4: Bangladesh: trends in the number of garment factories, 1992/93-2001/02 Table 5: Bangladesh: number of factories in operation and number of employees in the garment industry, by factory size, 2002 Table 6: Bangladesh: exports of garments and associated consumption of fabrics and yarns by volume, 1990/91-2000/01 Table 7: Bangladesh: trends in fabric production, 1995/96-2000/01 Table 8: Bangladesh: trends in exports of ready-made garments and shares of national exports, 1988/89-2002 Table 9: Bangladesh: trends in exports of ready-made garments by value and by volume, 1992/93-2001/02 Table 10: Bangladesh: trends in exports of major ready-made garment items, 1994/95- 2000/01 Table 11: Bangladesh: exports of garments to major markets, 1998/99-2001/02 Table 12: Bangladesh: leading destinations of exports of ready-made garments, 2000/01 and 2001/02 Table 13: Bangladesh: trends in imports of fibres, textiles and other products, 1997/98- 2001/02 Table 14: USA: average prices of imported ready-made garments by major supplier, 2002 Table 15: Hourly wage rates in the ready-made garment industry, selected countries, 1998

Summary:

The textile and apparel industry in Bangladesh occupies a prominent position within the country’s industrial structure. It is the largest manufacturing sector, providing jobs for some 50% of the total industrial workforce and contributing 9.5% of the country’s GDP. Also, it accounts for almost 77% of total exports, making it Bangladesh’s leading foreign exchange earner. In the early 1980s exports were dominated by jute while garment sales were insignificant. But today garment exports are by far the leading export category. In 2001/02 the clothing sector generated as much as US$4.58 bn in foreign exchange. The industry benefits from special access to markets in the EU, Canada, Norway and Japan. Because Bangladesh is a least developed country, its textile and clothing exports enter these countries quota-free and duty-free. This concession, together with low labour costs, provides the garment sector with a strong competitive advantage. But in order to produce garments for export, the sector has to purchase a large share of its yarn and fabric needs from abroad, especially woven fabrics. Few local textile firms are able to produce materials of the required quality or in adequate quantities. The Bangladeshi government is attempting to remedy this situation. To reduce the country’s import bill, it is offering tax concessions and incentives aimed at encouraging investors to develop the necessary backward linkages.