Apparel sector impacts on recent terrorism

Moody’s: Terror attack has long impact on Bangladesh economy
Global credit-rating agency Moody's Investor Service proposed in a recent analysis about the impact of terrorism that has been plaguing Bangladesh. The agency generally has "political risks", factored into govenrment bond rating calculation and so far the nation's vulnerability has been moderate. This is subject to change in the wake of recent developments.

The Agency, particularly focused on the investor confidence and external payments standing, through diminutive foreign direct investments, especially towards the main forerunner, garments exports. This sector and textile, contribute to over 80% of total export share. Both of these are vital for growth and are stimulated by FDI. 

Direct flight bans to the UK

DCCI calls for quick fix to ban on direct air cargo

Deep concerns for business as of March 8th, the UK banned direct cargo flights from Dhaka, reasoning Bangladesh not meeting international security requirements. Previously, Australia has done so too with similar complains during December 19, 2015.

Flights to the UK travel four times a week with domestic passengers and 25 tonnes of cargo each. Exports are US $3.2 bn and imports are US $330.72 million, to and from the UK. Garments and frozen fish consist mostly of the trade. Rerouting through Hong Kong, Singapore and Thailand will hike costs immensely.

UK ban not to hurt vegetables export much
Although this ban is of great concern, vegetable exports are not going to be impeded or made costlier, due to the traditional choice of non-direct flights for the category to the UK. Daily averages of 30-35 tonnes of veges consist of 40% to the UK and the rest to other global destinations.

"According to Export Promotion Bureau data, during July-February period of the current fiscal year, Bangladesh earned $2.46bn from exports to the UK, of which, $2.27bn were RMG products and $7.5m vegetables and other agricultural goods."

Women in the RMG

How RMG women become decision maker in family


Starting with fables of a common housewife of a poor family, this article reports the status of the RMG industry, where even poor women can make a prosperous living relative to their previous state. From improvement to living standards, internal family status was also lifted. The woman felt more confident individually in their own families. This is what Asian Center for Development's survey expressed, while it was measuring "Garment Workers in Bangladesh: Social Impact of the Garment Industry".

RMG comebacks and challenges

RMG export shines in volume, pales in value

Low price offers from foreign buyers, devaluation of the Euro and rise in production costs make our RMG exports bleak, compared to the 58.17% rise from the last fiscal year of 2014-15. The volume posted was at 1.57 bn units exported earning a total of US $25.49 bn, a 4% rise. Knitwear and woven products scaled up 3.13% and 5% respectively. Improvement in productivity and technology is required to meet the devaluation in the EU and possible monopsony of buyers worldwide.

Generalized System of Preferences (GSP): Bangladesh's inclusion a possibility or a non-necessity?

Focusing not on GSP but on building export capacities

Recently the US has renewed the system of duty or tax-free imports into its economy from 122 other countries, termed Generalized System of Preferences (GSP), but not Bangladesh. Although the US stated Bangladesh has made progress in fire and safety precautions, additional modifications are needed, especially labor rights and harassment issues, which must be under the direction of the ILO, EU and other international associates thereby adhering to Sustainability Compact act. Controversially, the issue may be entirely US political, where Sri Lanka sustaining many good conditions, are still out of GSP.

The GSP only affects non-apparel exports which are the preferences of the US.