Government resets target to $38.73 bn from RMG and $51 bn from entire textile sector
Back in 2015, Bangladesh had set an ambitious $50 billion export target for its readymade garment (RMG) by 2020-21 in line with the ruling party Awami League’s election manifesto. The target was achievable, but not easy.
Secretary of textiles and jute ministry Lokman Hossain Mia said, ahead of the three-day National Textile Day 2020 and Multipurpose Textile Fair, which was inaugurated by Prime Minister Sheikh Hasina Wajid on January 9 in Dhaka, that the government had prepared an elaborate action plan to make the sector stronger. In this regard, 42 vocational institutes, seven textile institutes and seven textile engineering colleges were also established.
Mia added that nine organisations and business enterprises would be awarded in different categories to enhance the RMG export and speed up the development.
However, Mia’s own ministry recently estimated that the country’s RMG export earnings in 2020-21 would be $11 billion short of the ambitious target. The estimate sets RMG export earnings in the coming fiscal year at $38.73 billion. Following up on the estimate, the Bangladeshi government is considering setting export earnings target at $51 billion from the entire textile and clothing sector including RMG, packaging, accessories and home textiles as export trend s howed that $50 bn target by FY 20-21 would not be achieved alone from RMG
The textile and jute ministry held a meeting with the stakeholders to identify deficits and any possible solutions. Post-meeting, the government reset the earnings target from RMG at $32.69 bn for the current 2019-20 financial year. Textile Secretary Md Mijanur Rahman said the ministry has proposed resetting the export earnings target to $51 billion from the textile sector for FY 20-21 including $38.73 bn from RMG, $11.22 bn from packaging and accessories and $1.06 bn from home textile and terry-towel.
Rahman said other ministries including finance, commerce, foreign and labour would have to play their roles on this issue as 81 percent of total export earnings come from the textile sector.
Bangladeshi garment exports skyrocketed in 2010-11 when it jumped by 43%, but such a jump is unlikely to be seen again as the six years since then have only averaged 8.8%. Looking forward, a more accurate annual estimate might be somewhat lower than 13.9%.
To meet their projections, Bangladesh will have to outperform the global apparel industry. The Asia-Pacific apparel export market is expected to grow around 9% annually. To achieve 10.9% growth, Bangladesh will have to gain market share from regional competitors like China, India, and Pakistan, all while they seek to grow their own garment exports.
In 2014, the World Economic Forum rated Bangladesh’s infrastructure 127th out of 144 countries evaluated.
In order to accommodate an additional $25bn in RMG exports, the Bangladeshi government will need to make considerable infrastructure investments.
