Experts say that the ready-made garments sector (RMG) in Bangladesh would miss the projected export earnings target of $34.20 billion for the upcoming fiscal year 2014-15. Experts opine that a 11 per cent rise in the earnings over the current fiscal year's export target of $30.50 billion is way above a logical and achievable forecast.
Keeping the impact of fire and building collapse tragedies that claimed several lives last year, about 200 factories have stopped operations owing to various reasons like political violence, failure to meet compliance requirements and ongoing factory assessment. Many more factories may be closed due to the ongoing inspection programs of the global brands and the government.
There is also a considerable drop in export orders with regular and major importing companies refusing to place orders with units located in shared or rented buildings. Meanwhile, production cost has gone up significantly following the recent wage hike of workers and additional costs to meet safety requirements. The inspection programs being carried out by Accord, Alliance and Bangladesh University of Engineering and Technology (BUET) are expected to end in December this year. A large number of factories will be relocated and the reforms would take at least another two years.
Experts feel that till all the changes and improvements take place, achieving the target for the next fiscal doesn’t look possible. Besides, they also pointed out that the incentive packages provided to export sectors are not responsive enough to overcome the impact of the Euro Zone economic crisis.