Bangladeshi RMG sector may be restructured

The country's industrial sectors including major export-earning readymade garments need to be restructured to improve their competitiveness in the coming days, a high-profile policy dialogue on Tuesday recommended. The gathering of economists and other researchers expressed serious concern at the density of population in Dhaka and elsewhere — a critical problem, which, they pointed out, had now been constraining industrialisation and farming opportunities. 'The garment sector should be restructured for higher competitiveness,' Wahiduddin Mahmud, a former caretaker government adviser, said with a cautionary note that low wage costs would not compensate for disadvantage in marketing skills and infrastructure deficiencies. Acknowledging the concerns, the finance minister, AMA Muhith, emphasised export diversification to sustain market challenges and development of rural compact townships to protect farmland and ensure industrialisation. At the roundtable on 'Operationalising pro- poor growth: research-policy link', the minister announced that the country would get rid of sick industries within the remaining period of the Awami League-led government. 'For the country's survival and for providing reasonable habitation, rural township needs to be implemented,' Muhith said, however asking how such compact township would be development without an authoritarian regime. The finance minister also expressed his frustration at the lack of depth and adequacy of initial public offers at the capital market and said the government would 'have to look into the area'. The economic affairs adviser to the prime minister, Masihur Rahman, said there was 'too much' dependence on debt financing. He added that agro-based exports such as fishes had been exposed to risks as the farmers were not covered by insurance. Bangladesh Institute of Development Studies and Economic Research Group jointly organised the roundtable discussion at Dhaka Sheraton Hotel to highlight the issues pertaining to economic development and poverty alleviation. Underlining the importance of adopting research-based policy, the director general of the institute, Mustafa K Mujeri, said, 'This is constrained by absence of skilled and capable professionals, institutions with mandates and resources and nature of linkages of researchers with policymakers.' Mark Rosenzweig, a professor Yale University, the USA, stressed the need for high-quality up- to-date data for proper research and development planning while Masihur Rahman said the Bangladesh Bureau of Statistics must be upgraded in order to raise capacity and ensure credibility of the institution. 'The Bangladesh government is one of the most research-guided governments in this part of the world,' said the finance minister still blaming the mindset of the policymakers to depend on funding agencies for supporting research projects. Business leaders and professors of Western universities present there called for linking research to demands from and the latest challenges to various sectors for he forward march of Bangladesh, which was widely considered as a development paradox in view of poor governance vis-à-vis social progress. 'The black-box of 'governance' needs to be unbundled in order to identify its growth- constraining aspects,' said professor Wahiduddin Mahmud, dwelling on the ways and means on how to break the shackles of economic stagnation and extreme poverty. The president of Bangladesh Knitwear Manufacturers and Exporters Association, AKM Fazlul Hoque, said some of the forecasts by researchers of aid agencies such as the World Bank and International Monetary Fund about prospects of textiles industry in Bangladesh proved to be wrong. The World Bank's Sadiq Ahmed mentioned that Bangladesh had not been able top take its advantage of having sea outlet and of its location as corridor between the South Asia and Southeast Asia.