Premium Essay

Systemic Importance of Rmg Sector

In: Business and Management

Submitted By hihu979
Words 9699
Pages 39
ISAS Working Paper
No. 85 – Date: 7 September 2009
469A Bukit Timah Road #07-01, Tower Block, Singapore 259770 Tel: 6516 6179 / 6516 4239 Fax: 6776 7505 / 6314 5447 Email: Website:

An Economic Analysis of Bangladesh’s Foreign Exchange Reserves M. Shahidul Islam 1
Executive Summary Following the rapid accumulation of foreign exchange reserves in recent months, there has been a growing interest in Bangladesh on the alternative uses of its reserves. However, different reserves adequacy measures based on global best practices confirm that its reserves holding is not markedly higher than what is required. The country’s reserves stand higher than the adequate level only when one considers the current account aspects of reserves benchmark which is perhaps appropriate for the country as its financial system is still autarkic. The dynamics in its balance of payments account also supports the fact. The paper highlights the fact that Bangladesh’s reserves build-up is the result of an ‘investment drought’ in the country. This is partly due to its underdeveloped financial systems, and partly due to other structural problems in the economy – entailing difficulties in properly channelling national savings to investments. As the Bangladesh central bank’s sterilised intervention increases, so will its cost of reserves accumulation. The reason is the interest rate arbitrage between Bangladesh and the United States. The United States government securities market, that absorbs the lion’s share of developing economies reserves, has been offering lower yields following the collapse in interest rate in the country in recent times. Nevertheless, the apparent spread between the United States Treasury and Bangladesh Treasury rates might be not that high in real terms if one weighs in Bangladesh’s certain benefits of reserves holding, particularly…...

Similar Documents

Premium Essay

Rmg Sector in Bangladesh

...Introduction Background of the study: * We are doing this assignment for completing the principals of management courses in the BBA department. * We are doing this report so that we can analysis the readymade garment (RMG) sector of Bangladesh and find out the problems and remedies of this sector. Objectives of the study: The main objectives of this report are * To gain knowledge about the industrial unrest in the readymade garments industry of Bangladesh. * To identify the problems of RMG sector of Bangladesh. * To analysis the problems of this sector. * To fine out the remedies that could solve the problems of RMG sector. * To gain in-depth knowledge about the readymade garments industry of Bangladesh. Data collection method: This assignment has been completed by taking information from different relevant sources. This assignment also consists of a significant amount of data obtained from some secondary sources. For the secondary data, we have taken some information from the internet. We also collect information from various industries’ web sites. Limitation of the study: Though our study is based on secondary data, there is a possibility of getting fake information. This study is weak in some points. The notable ones are as under: * This report has been made basis only on the secondary data. * The survey was conducted in a very short time so we were not able to collect more information. * This survey made on crisis......

Words: 2590 - Pages: 11

Premium Essay

Bangladesh Rmg Sector

...Chaudhury The World Bank Syed Rashed Al-Zayed Josh The World Bank Draft: March 15, 2009 Human Development Sector South Asia Region Acknowledgements This study was made possible by generous funding from the EPDF Trust Fund. We also express our appreciation for additional funding and institutional support from the Education Unit of South Asia Human Development, World Bank as well as the Bangladesh Country Management Unit. The authors would like to highlight the services provided by the survey firm, DATA, who conducted this complex survey with utmost professional competence. Furthermore we are grateful to DATA for providing valuable statistical input in preparing this report. The authors are grateful from valuable comments and feedback received from the Ministry of Education and Economic Relations Division, Government of Bangladesh. The authors would also like to thank Rafiqul Huda Chaudhury, Markus Goldstein, Michelle Riboud, and Halsey Rogers for their valuable comments. This report does not necessarily reflect the views of the World Bank or the Governments they represent. ii Executive Summary 1. A unique feature of the Bangladeshi secondary education sector is the large presence of Islamic institutions of religious learning, commonly known as madrasas. However, unlike other countries in the region with large Muslim populations, the religious education sector comprises of both state regulated private madrasas as well as independent, private madrasas. The......

Words: 11643 - Pages: 47

Premium Essay

Rmg Sector

...A SWOT Analysis on RMG Sector in Bangladesh RMG is the leading industry in Bangladesh. It is basically a labor-intensive industry and it needs limited financial investment and relatively simple technology compared to other high technical industries. The success story of Garment Industry in Bangladesh is the story as to how the readymade garments starting in the late seventies as an insignificant non-traditional item of export. In 1998-99 this sector has earned 4019.98 million US$ through exporting which is 75.67% of the total export. The tremendous success of Readymade Garment (RMG) exports from Bangladesh over last two decades has surpassed the most optimistic expectations. At present Bangladesh is the 6th largest exporter to USA and in 1997 Bangladesh becomes 18th largest exporter in the world. Now Bangladesh ranks first export of T-shirts to Europe (BGMEA, 1997-98). The overall impact of the readymade garment export industry is certainly one of the most significant social end economic developments in contemporary Bangladesh. The remarkable achievement of RMG sector is now exposed to each and every country. Despite these impressive achievements and the probable challenges in the near future, if properly managed, the prospects for further expansion and growth for this sector remain bright. There are some major threats still exits in this sector but Bangladesh has the ability to overcome these threats. Readymade Garment (RMG) industry holds a key position in the...

Words: 3512 - Pages: 15

Free Essay

“Employee Grievance in the Workplace and Its Remedies: a Study on Rmg Sector of Bangladesh”

...relation course teacher Mr. Md. Arifur Rahman assigned us to prepare are port on Grievance handling procedure in a RMG sector of Bangladesh as related topic industrial relation course. We have selected our report topic as “Employee Grievance in the workplace and its remedies: A study on RMG sector of Bangladesh”. We have made a survey for required information in RMG Sector in Bangladesh in net. We have prepared our report on November 28, 2013 which will be submitted by November 29, 2013. 1.2: Objective of the Study We have prepared this report based on two purposes. Those are- 1) To develop our Knowledge in RMG sector of Bangladesh 2) And provide more Valuable Information gathered for who passionate employee to want to join in RMG sector. 1.2.1 Primary Objective: The report aims to provide information on suggest more valuable step follow grievance handling procedure effective of by the RMG sector through Management 1.3: Scope of the Study There is a certain boundary to cover this report. Our particular report only covers Training and Development in RMG sector. We mainly focus how to handling grievance procedure and what types of principles follow to Grievance handling procedures RMG sector. 1.4: Limitations of the Study We are lucky enough to get a chance to prepare a report on “Employee Grievance in the workplace and its remedies: A study on RMG sector of Bangladesh.” We tried heart & soul to prepare a well-informed report. But unfortunately we......

Words: 2481 - Pages: 10

Premium Essay

Labor Unrest in the Rmg Sector

...Labor unrest in the RMG sector–reasons and remedies October 7, 2010 The prevailing worsening situation in readymade garment (RMG) sector is not good for country’s feeble economy. RMG sector accounts for 76% of our total annual foreign exchange earnings. Once, Jute was the only foreign exchange earning item. But the golden age of Jute is now over. At present, the RMG is our only dependable export item. The textile sector has emerged as a backward sector to this RMG sector. Spinning, weaving, Knitting; dying, finishing etc have emerged as a backward linkage industry. These areas of the of the textile sector are contributing to the economy of the country. So, if the RMG sector suffers any crisis, the repercussion will be felt everywhere in the rickety economy. Now, there are 350 spinning mills operating in the country, which is catering to the demand of the RMG sector and thus saving huge amount of foreign exchange. At present, the capacity of the spinning mills is 1.6 billion meters. There are 180 dying-finishing mills in the country with a capacity of 120 million meters per year. The production capacity of the knitting mills is 41 billion meters. What is important here is that they are capable of meeting local demand. The total workforce engaged in this sector is about 2.5 million, of which 60 percent is women. The total production is being exported to foreign countries. The reasons and the remedies of the present crisis: All of a sudden, labor unrest has increased in our......

Words: 18631 - Pages: 75

Premium Essay

Rmg Sector Safe Working Environment

...influence on the environment disclose and report considerably more information than corporations from other industries. In general, corporations from the mining, oil, and chemical industries emphasize information regarding environmental, health, and safety issues (Clarke and Gibson-Sweet, 1999; Jenkins and Yakovleva, 2006; Line et al., 2002; Ness and Mirza, 1991), while the finance and service industries in general seem to report more regarding social issues and philanthropical deeds (Clarke and Gibson-Sweet, 1999; Line et al., 2002). A body of empirical literature associates the metals, resources, paper and pulp, power generation, water, and chemicals sectors with high environmental impacts (Bowen, 2000; Hoffman, 1999; Morris, 1997). In contrast, other industries, particularly newer manufacturing industries and the service sector, have significantly lower environmental impacts and are associated with fewer visible environmental issues. Therefore, companies in these industries are expected to be subject to significantly less stakeholder pressure regarding their environmental performance, and so would be expected to display a lesser degree of disclosure activism. Hence, the discussion above leads us to the hypothesis that: 356 Carmelo Reverte evidence, in the context of environmental information, that having greater ownership concentration makes a firm less likely to disclose an environmental policy. Thus, we hypothesize that: H4: profitable, environmental disclosures......

Words: 9772 - Pages: 40

Premium Essay

Implimentation of Six Sigma at Rmg Sector in Bangladesh

...some inventory to reduce the impact of the risk or improve their supplier relations to reduce the probability of the risk occurring. This notion of an optimal level of leanness, one stop short of a totally lean solution, is depicted in Figure 4. [pic] Certainly the additional costs associated with risk abatement will be significant, but our contention is, that through an Agile Six Sigma approach, supply chains can reduce internal sources of risk whilst improving supply chain efficiency and effectiveness. RMG Business Structure Readymade garment is a labor intensive industry and relatively simple technology compared to other high-tech industries. The RMG manufacturing units are like tailor’s shop; getting order from the foreign buyers and then import raw materials specially fabrics from the foreign suppliers or sometimes buy from the local market as per order, then manufacture garments and supply those to the buyers (Munir, Q. and Salim, R. 2000). In the RMG sector, the Manufacturer - Raw materials Supplier relationship is different. In this Industry the main raw materials are fabrics (Cloths) and few accessories are like button, collar etc. About 80% of the suppliers of accessories are local and accessories suppliers are not responsible to Increase l time. Bangladesh garment manufacturer need more time is getting higher due to import of fabrics mainly from China, Indonesia and India, The total average time to import fabrics from abroad is 50-65 days and this is the......

Words: 5501 - Pages: 23

Premium Essay

Rmg Sector

...Six Sigma in RMG Factories. - Top Management is not willing to break the traditional manufacturing process. - Not willing to encourage a New Method even Mid level & Bottom Line Management are keen to step in such an to unique process. - Not willing to sphre time to know more aabout a New Conecpt. - Think Peoples are there to take care and let them be responsible for Quality, why should Top Management be involved for such issues. - Not willing to implement idea generation by brain storming as well traing as all the staffs are trained even training & development is a best method for continuous improvement. - Customer are Happy, why spend more time and money for creation of more Value added Products to Clients - Only to solve existing problems, Not bother about Preventive Measures in the same areas as well other areas or Process too. - Finding out Root Causes is a time consuming factor, why should bother too much. - Complain or Claim just tackle either by meeting or negotiation. Not bother about to take as a Learning Points. - The most Important is Why Top level Management will be responsible for Quality as it's handle by various department in-charges ? - Not clear assignment or accountability frame out in different levels. Really very curious to visit such a RMG where Six Sigma implmeneted and might share my knowledge too and learnt from there practically even spent over two ddeccades of time in Manufacturing & Operation process in RMG sector. Could......

Words: 435 - Pages: 2

Premium Essay


...perspective has its own view of strategy and how it matters for managerial practice. The Classical approach gives the textbook answers. - Classicists broadly see strategy as a rational process of long-term planning, vital to securing the future. - Evolutionists usually regard the future as too volatile and unpredictable to plan for, and warn that the best strategy is to concentrate on maximizing changes of survival today. - Processualists too doubt the value of rational long-term planning, seeing strategy best as an emergent process of learning and adaptation. - Systemic theorists take a relativist position, arguing that the forms and goals of strategy-making depend particularly on social context, and that strategy should therefore be undertaken with sociological sensitivity. These are four starkly different perspectives (p. 119), but it is the Systemic sensibility that helps us finally to choose. For the Systemic strategist, effectiveness depends upon understanding context and playing by local rules. Classical, evolutionary, processual, they can all take place in some conditions. There is no one best way. The key is to match strategy to market, organizational, and social environments. They all work best in different contexts (p. 120). Strategic management: A set of conceptual frameworks and tools intended to help managers to make decisions on the long run positioning of firms, resulting in an adequate level of performance of the organization (sheet). A way to......

Words: 2569 - Pages: 11

Premium Essay

Performance Evaluation of Hr Practices in Rmg Sector

...Chapter One 01 Introduction 1 Introduction In recent years, the Garments sector has emerged as the biggest earner of foreign currency in Bangladesh. Over the last years, Ready Made Garments (RMG) sector experienced impressive growth rates and specifically knitwear products are in high demand by the USA and European markets. The sector contributes significantly to the GDP. It also provides employment to around 4.2 million Bangladeshis. In the field of Industrialization garment industry is a promising step for economy of Bangladesh. In the 1980s, there were only 50 factories employing only a few thousand people. Currently, there are 4490 manufacturing units. The RMG sector contributes around 76 percent to the total export earnings. This sector also contributes around 13 percent to the GDP, which was only around 3 percent in 1991. Of the estimated 4.2 million people employed in this sector, about 50 percent of them are women from rural areas. The garment sector is the largest employer of women in Bangladesh. The garment sector has provided employment opportunities to women from the rural areas that previously did not have any opportunity to be part of the formal workforce. This has given women the chance to be financially independent and have a voice in the family because now they contribute financially. The country’s garments industry grew by more than 15 percent on average during last 15 years. The foreign exchange earrings and employment generation of...

Words: 9509 - Pages: 39

Premium Essay

Supply Chain Six Sigma in Rmg Sector

...six sigma at RMG Prepared by Mohammad Mesbah Uddin, ID-2013-3-5-019, MBA@BUTEX 1 Mohammad Mesbah Uddin, 27-12-2014 ID-2013-3-5-019, MBA@BUTEX TABLE OF CONTENTS S.I PAGE 0 ABSTRACT 3 1 INTRODUCTION 4 2 SIX SIGMA APPROACH TO DESIGN 5 3 ANANLYSIS OF SUPPLY CHAIN DELIVERY PERFRMANCE 6-7 4 DESIGN OF SIX SIGMA SUPPLY CHAIN 8 5 OUTLINE OF THE PACKAGE 9-10 6 SMMARY AND FUTURE WORK 11 7 2 NAME OF ARTICLE REFERENCES 12 Mohammad Mesbah Uddin, ID-2013-3-5-019, MBA@BUTEX ABSTRACT The ready-made garment (RMG) industry has recently occupied the largest part of exports and foreign currency in Bangladesh and has been for more than a decade the second largest contributor to gross domestic product (GDP). Millions of poor women and men are employed in this industry. However, a supporting import quota system in the USA was stopped in 2005 which has left the RMG sector struggling against new challenges that need to be properly addressed. As the end consumers of the apparel fashion market are becoming increasingly time-sensitive, a decrease in lead time, besides quality and cost criteria, is needed to win more orders from buyers. We have examined the opportunity that lies in an integrated supply chain six sigma to provide a competitive advantage to the Bangladesh RMG sector. A system dynamics approach has been used to identify the dominant variables of supply chain performance (such as enablers, performance or results, and inhibitors) in the RMG sector. A survey......

Words: 1926 - Pages: 8

Free Essay

Development of Bangladeshi Rmg Sector

...Development of Bangladeshi RMG Sector Introduction The Ready –Made Garments (RMG) sector has emerged as the biggest earner of foreign currency. The RMG sector has experienced an exponential growth since the 1980s. The sector contributes significantly to the GDP. It also provides employment to around 4.2 million Bangladeshis. An overwhelming number of workers in this sector are women. This has affected the social status of many women coming from low income families. History In the 1950s, labors in the Western World became highly organized; forming trade unions. This and other changes provided workers greater rights including higher pay; which resulted in higher cost of production. In order to control the level of imported RMG products from developing countries into developed countries, Multi Fibre Agreement (MFA) was made in 1974. The MFA agreement imposed an export rate 6 percent increase every year from a developing country to a developed country. In such restrictions, producers started searching for countries that were outside the umbrella of quotas and had cheap labor. This is when Bangladesh started receiving investment in the RMG sector. In the early 1980s, some Bangladeshis received free training from Korean Daewoo Company. After these workers came back to Bangladesh, many of them broke ties with the factory they were working for and started their own factories. In the 1980s, there were only 50 factories employing only a few thousand people. Currently, there are......

Words: 951 - Pages: 4

Premium Essay

The Effect of a Raise in the Minimum Wage on Employment and Profitabilty in the Rmg Sector of Bangladesh, Drawing Sources from Other Developing Countries

...Saima Siddiqa Subject: Labour Economics Date: 22/06/15 The Effect of a Raise in the Minimum Wage on Employment and Profitabilty in the RMG Sector of Bangladesh, Drawing Sources From Other Developing Countries The study of minimum wages has led to many debates surrounding the topic whether a raise in minimum wage can kill businesses in profitability and employment or the change in profitability and employment is insignificant. This is a hot topic for policy makers in both developed and developing countries as a raise in minimum wage affects the economy in terms of economic growth, standards of living for the poor, survival of businesses and employment. A lot of research and literature has shown that a hike in minimum wages do not particularly affect the developed nations but the same hikes in developing countries can cause damage to firms depending on the size of the firms and their profitability. This paper attempts to show that the garments sector in Bangladesh (Ready made Garments Industry) faces the same dilemma. Since the Savar tragedy in late 2013 where a garment factory, Rana Plaza, collapsed which killed more than 1,100 people and injured and more than 2,500 people injured, garment workers and civil society demanded a raise of minimum wage from 3000 tk to 5,300 tk every month. This tragedy and similar events in developing countries lead us to think how businesses especially in the developing countries where wage rates and productivity are low can operate......

Words: 2415 - Pages: 10

Premium Essay

Sme Sector Importance

...collateral. As small business owners in Pakistan are not well educated, they’re unable to meet the stringent standards of banks. Either SMEs don’t apply for bank loans at all, or if they do (10.7%) they’re more likely to be rejected (75%) as compared to large businesses due to absence of established structures.  The cost of credit financing: For SMEs access to risk-sharing credit is also difficult because of high costs. The interest rate spread of banks increased from 3% during 1990’s to 8% by the turn of the new millennium. According to a study conducted by ADB, lease financing represents up to 25% of total fixed investment. The cost of funds for leasing companies averaged approximately 18% per annum which is much higher than for banking sector. The report issued by ADB also identifies the difficulties in obtaining export finance as banks require export letters of credit. SMEs being mostly indirect exporters can’t access this facility. Direct cost include interest and fees; indirect costs include the cost of producing the required documents, time to be spend with bank officials and the length of process that hampers growth of business.  Informality and lack of education: SMEs are usually small family-owned businesses that lack the skills to produce written business documents and financial plans and are discouraged by the extensive documentation of banks. Moreover SMEs require cash immediately, as they don’t plan well in advance. Lag in providing loan can completely......

Words: 510 - Pages: 3

Premium Essay

Recent Unrest in the Rmg Sector of Bangladesh: Is This an Outcome of Poor Labour Practices?

...Recent Unrest in the RMG Sector of Bangladesh: Is this an Outcome of Poor Labour Practices? Chowdhury Golam Hossan (Corresponding author) Assistant Professor of Management College of Business Administrations, Abu Dhabi University Abu Dhabi, UAE Tel: 972-501-5710 E-mail: Md. Atiqur Rahman Sarker (Lecturer) Department of Business Administration, East West University 43 Mohakhali, Dhaka 1212, Bangladesh Tel: 88-017-4427-0243 E-mail: Rumana Afroze (Lecturer) Department of Business Administration, East West University 43 Mohakhali, Dhaka 1212, Bangladesh Tel: 880-181-888-3767 Received: July 2, 2011 doi:10.5539/ijbm.v7n3p206 Abstract The RMG sector of Bangladesh has experienced disputes and violent protest by the workers in recent times. This study explores the reasons for recent unrest in the garment sector. Since managers are mainly responsible for applying human resource practices, this paper has given particular attention to their views on recent attitude changes of workers. Results show that mutual understanding among workers and managers is absent in the RMG sector. This study also states that high-work load, poor behaviour of line managers, low skills and low wage rates are the notable reasons for high job turnover and social unrest. Poor relationship between workers and supervisors is the main source of conflict. This study finds that there is growing demand for work life balance among the workers of RMG sector. Keywords:......

Words: 9644 - Pages: 39