Bangladesh Textile Trade Essay Example

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2Case Analysis

Bangladesh Textile Industry Case Analysis

Question a)

Free trade and globalisation helped the Bangladesh to acquire new markets across the world. This came as a result of the economic recession that hit most developed nations that were now forced to import only cheap garments from Bangladesh in order to better meet the needs of the customers who were now looking for lowly-priced products. In comparison to the quota system, under which the country could only serve a particular market, globalisation helped to open new markets across the world that extended from the United States of America to now Australia. Consequently, supporting industries has continued to help generate inputs locally for the garment manufacturing thereby saving on such costs related to storage and transport. This arrangement has also facilitated free trade in that it has cut down on import duties as well as the lead times that emanate from the importation of woven fabrics, which has in turn resulted to the industry producing more that could meet the now extensive sets of world markets.

Question b)

The end of the quota system was blessing rather than a disguise to the Bangladesh textile industry. Despite the system being scrapped-off entirely, the country was now exposed to more world markets where its cheaply-produced garments could now get even more customers. It can be successfully argued that with the end of the quota system, more potential importers were now allowed an opportunity to diversify their supply chains to Bangladesh in order to prevent possible future collapse of business operations in the event that economic times happen again. It is crucial to note that the end of quota system did not prevent possible growth of the industry. In the case of Bangladesh, human resource factors could be attributed with the low labour costs that is brought about by a consequent low hourly wage rates as well as extensive investments made in relation to productivity-boosting technology in the course of the decade. Despite the low wages, the industry still manages to attract extensive level of women who have few options in regards to employment opportunities. This ready low labour has ensured that the industry is still able to meet the extensive demand of the world market.

Of particular interest to note, the Bangladesh textile industry enjoys the readily-available supporting industries that are able to provide with inputs. In fact, close to three-quarters of all garment inputs are sourced locally there saving the manufacturer both transport and storage-related costs; import duties as well as the lead times that emanate from the importation of woven fabrics used for the purpose of manufacturing trousers. This has in turn ensured that production for the global market is now enough since unnecessary costs are eliminated. The fact that the industry is easily identifiable by the current Western importers, for purposes of continuing the trend of diversifying their supply sources, has ensured that free trade and globalisation expectations are met at the right time in comparison to when it operated under the quota system.