Definition and scale of sector
Why the sector was chosen in the West Midlands
Bangladesh has emerged, in just under a decade, as the twelfth largest garment-manufacturing nation in the world, thanks largely to the Multi-Fibre Agreement (MFA), and the Generalised System of Preferences (GSP) of the European Union, that conferred significant quota benefits to the country. The garment sector now accounts for about 77% of the country's foreign exchange earnings, and 50% of its industrial work force. Bangladesh has now become a significant supplier to both North America and Europe. More than 50% of Bangladesh's garment exports go to the countries of the European Union, and 44% to the United States.
While European financial investments are limited in Bangladesh, a significant part of the sector uses European know-how and equipment. In many mills, the spinning lines are entirely of European origin; while European expatriate technicians are being used to improve the quality of dyeing and finishing operations.
The ready made garment industry in Bangladesh has evolved from economic opportunities that were perceived by the private sector in the late 1970s. Frustrated by quotas imposed by many importing nations, firms from other Asian countries set up factories in Bangladesh, which allowed them to take advantage of labour costs that were even lower than in otherAsian countries, even when balanced against the additional costs of importing necessary raw materials to Bangladesh.
As foreign businesses began building a ready-made garment industry, Bangladeshi entrepreneurs also started to organize companies in Dhaka, Chittagong, and smaller towns, where basic garments (men's and boys' cotton shirts, women's and girls' blouses, shorts, and baby clothes) were cut and assembled, packed, and shipped back to customers overseas (mostly in the United States). With no government regulation, the number of manufacturers soon proliferated.
The phenomenal growth in RMG was experienced in the last decade. With about 2,600 factories and a workforce of 1.4 million, RMG jointly with knitwear accounted for more than 70% of total investments in the manufacturing sector during the first half of the 1990's.
Manufacturing of semi-conductors could be established as a potential cottage industry. Bangladesh is going to be the largest cell-phone market in South Asia. Industry Outlook
Bangladesh's experience in basic electronics spans over two decades. In recent years, European and Asian electronic firms have established technical collaboration with their Bangladeshi counterparts to produce some electronic goods at competitive prices. This has tremendous potentiality for expansion.
The Government of Bangladesh has adopted National Telecommunication Policy, 1998. Investment is encouraged through BLT-BOT/BOO/BTO and other joint venture schemes which by greatly increasing the capacity, quality and type of services, will create improved efficiencies in other sectors such as transportation energy and the textile industry.
To meet the telecommunication requirements of the country the government has been developing and expanding the systems and services of BTTB. Private sector operations in the rural telecommunication, paging, cellular telephones and riverine radio trunking have already been allowed. At present 7 private operators are providing their services to about 100,000 customers. Government has allowed expanding 300,000 digital telephone in Dhaka by private sector participation through open tendering.
In accordance with overall national policy, liberalization of the telecommunications sector will continue. However, the government retains the sale authority to determine the number of competitions that are economically viable for certain services. The strategy is to provide equal and rational opportunities to all competitors.
Engineering is generally a major component in all types of foreign investment in Bangladesh. The majority of foreign direct investment (FDI) and private debt flows into development of infrastructure such as energy, and telecommunications, plus manufacturing, and most of the funds are used to finance importation of machinery, equipment, plus engineering, procurement and construction (EPC) activities. Due to the diverse types of activities carried out by the engineering sector, it is broken down into three main sub-sectors, namely consulting engineering, construction engineering contracting, and light engineering which is required to produce manufactured goods or engineered products. favour a turnkey approach that is quite common in Bangladesh for projects funded by the United States and Japan, other donors such as those from EU Member States often favour procurement split between independent consulting engineers and contractors.
A growing and increasingly affluent middle class indicates demand for consumer durables.
There is a significant sector of cottage industries engaged in simple electronic goods.
Export-oriented production in light industries has gained momentum in the past few years.
Light industries in Bangladesh produce a multitude of labour intensive goods including toys, consumer items, small tools and paper products for the domestic market. Further development for these industries offers various investment opportunities. Export-oriented production in light industries has gained momentum in the past few years. Entrepreneurs from Hong Kong, Japan and Korea have taken advantage of Bangladesh's cheap and easily trainable labour and its infrastructure facilities to manufacture products for the export market
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