Effects of the Post Multi-Fiber Agreement on Bangladesh Readymade Garments Sector

Abstract: The thesis “Effects of the Post Multi-fiber Agreement on Bangladesh Ready Made Garments Sector” is a part of our M.Sc. in Business Administration Program. The thesis paper on this topic is done under the supervision of Mr. Göran Alsén, Professor of Blekinge Institute of Technology (BTH) Ronneby, Sweden. In our country garment industry has been playing most vital role in our national economy, foreign exchange earnings, employment, growth in other sector and most prominently women employment. In the first chapter we tried to focus on the historical background of Multi Fiber Agreement, the growth of Bangladesh Garments Manufacturer and Exporter Association (BGMEA).In 1983 the total members of BGMEA were 143 with narrow export volume but in 2007 we see the total members are 4637.They contribute 75.64% of our total export (BGMEA, 2007). People who are directly involved with this sector became worried because of phase out of quota system from January 2005.But if we observe the current scenario it is very much positive for our national economy. It’s true that competition grew high but at the same time we can say that our garments industry did not lose its market reputation compared to that of other rival competitors like China, India, Sri Lanka, Vietnam etc. It’s very obvious that we have great problem with the backward linkage industry. As a result we are facing huge competition among the competitors. We have to face huge competition with the other competitors as long as we could set up our backward linkage industry. Under these circumstances, our Government is taking necessary steps to remove this problem. It is now simply a matter of time. But we hope we will get rid of this problem very soon. In this thesis paper we have tried to analyze the performance of five different RMG companies and we have also tried to examine the impact of withdrawal of quota system. Based on these five RMG factories we observe that our RMG industry is performing well after Post MFA. In addition, if we look our total exports we see that approximately 74.93% of our total export is from RMG sector. It is very promising sector compared to other export items. Thus we can say that to survive in this competitive sector our RMG sector should take some more necessary steps like improving employee efficiency, ensuring more training facility, emphasizing on backward linkage industry etc. To attract foreign investors these are very important.