Bangladesh RMG under high risk 80pc export earnings fetched from garment sector
Enayet Karim: Ready-made garment (RMG) has emerged the single leading export earning sector of the country sharing almost 80% of the total exports in 2012-13, despite the turmoil, severe labour unrest and catastrophe. RMG has also provided 53% job opportunities for the uneducated workforce. But RMG sector of Bangladesh is under high risk for the political disturbance and the sector will be seriously affected if the present situation might not solved.
According to the statistics of Bangladesh Bank (BB), Export Promotion Bureau (EPB), Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) and Bangladesh Textile Mills Association (BTMA)-the country has exported RMG in 2012-13 worth US$21515.73 million out of the total exports of US$ 27018.26 million, which is 79.63%.
The RMG exports in 2011-12 were $19089.69 million or 78.59% of the total export earnings of $24287.66 million. The earnings of RMG in 2010-11 were $17914.46 million or 78.14% out of total export earning worth $22924.38 million. It was $12496.72 million or 77.11% of total $16204.65 million in 2009-10.
The earnings from RMG in 2008-09 were $12347.77 or 79.32% out of total $15565.19 million. This was $10699.8 million or 75.82% out of total $14110.8 million in 2007-08. The RMG earnings in 2006-07 were $9211.23 million or 75.63% out of total $12177.86 million.
The income in 2005-06 from readymade garment sector of Bangladesh was $7900.8 million or 75.05% of the total income of $10526.16 million.
Income of RMG in 2004-05 was $6417.67 million or 74.15% of the total export income $8654.52 million. It was $5686.09 million in 2003-04 or 74.78% of the total income of $7602.99 million.
The income from the garment sector in 2002-03 was $4912.09 million or 75.01% of the total income of $6548.44 million. It was $4583.75 million in 2001-02 out of total $5986.09 million, which was 76.57%.
The RMG income in 2000-01 was $4859.83 million or 75.14% of the total $6476.3 million.
Unfortunately, Bangladesh witnessed only 2.9% growth in gaining RMG order this year, whereas India gains 23% and Vietnam gains 29% extra orders than previous year. The orders have been replaced due to extreme high wage hike in China. Here Bangladesh gains slightly increased quantity of orders due to the political unrest and suspension of GSP in US market.
Recently European Union (EU) has threatened Bangladesh to stop GSP facility, if the political stalemate may not overcome by a free, fair and credible election participated by all political parties.
Vietnamese garment makers are strengthening their foothold in key markets, putting new pressure on the Bangladesh apparel sector.
Competition will further intensify if the United States awards Vietnam the generalised system of preferences (GSP), a trade privilege scheme, as negotiations are currently underway for garment products.
Bangladesh exported nearly $18 billion in the nine months to September, with Vietnam trailing behind. With its robust growth, the Southeast Asian nation exported about $13.15 billion of garments, registering an 18 percent rise year-on-year in the same period.
Vietnam s garment exports grew 20 percent to $15.1 billion in 2012 from $12.82 billion in 2012, according to data from Bangladesh Garment Manufacturers and Exporters Association.
Still, Bangladesh is in an advantageous position compared to Vietnam, thanks to lower labour costs. Vietnam s textiles and garments industry has developed rapidly in recent years and has become a vital activity within the country s economy. It could attract large sums of foreign direct investment, mainly from China and South Korea, as the nation has flexible policies and good infrastructure.
Vietnam has been enjoying a lower tariff rate on apparel exports to the US since 2001 when the American government gave Vietnam the Most Favoured Nation status. On the other hand, Bangladesh has been paying a 15.3 percent duty on apparel exports to the US as the country has been kept away from any duty-benefit.
In 2012, Bangladeshi garment makers paid $746 million to US customs as duty for exporting garment items worth a little over $5 billion. Despite hectic negotiations, Bangladeshi garment items were not included in the US GSP scheme, which was suspended on June 27, citing poor labour rights and shortcomings in safety measures in the factories.
Garment exports from Bangladesh grew 12.69 percent to $21.51 billion in 2012-13 from the previous year, while it grew 6.97 percent to $19.9 billion in 2011-12 from 2010-11, according to BGMEA data.
At present, the number of garment factories in Bangladesh is 5,000 and 2,000 in Vietnam, according to the McKinsey report.
Hasina may step-down!
A Commentator: Ruling Awami League has breached the confidence of the voters that they gained in ninth parliamentary election. They have misused the mandate of general mass by taking number of contradictory decisions in the parliament including the Fifteenth amendment of the constitution. As a result, the country has to face unprecedented abnormalcy, agitation, procession, blockade and hartal. Hundreds of lives have been sacrificed within the last two years soon after the constitution amended.
Declaring state of emergency is now a matter of time. Because, Awami alliance Jatiya Party (Ershad) the third major political force of the country, has declared to boycott the forthcoming election. Awami League with some one-man show parties is still optimistic to hold the election, which has been decided in a meeting of the working committee of Awami League last week. Autocracy of Sheikh Hasina has crossed the limit of ousted army ruler H. M. Ershad, it is commented by a political observer. Sheikh Hasina is blaming Khaleda Zia for the prevailing vandalism. She doesn t want to agree that the situation has been created due to her lone decision!
People of the country don t expect this type of so called democratic activities from Awami League after 42 years of Independence.
Bangladesh proud to say that last 20 years we were in a fully democratic practice but the activities of democracy led by Hasina has tarnished the image and achievements. The contradictory High Court judgment regarding holding election abolishing the caretaker form of government by the immediate past Chief Justice ABM Khairul Haque and its legislation in the parliament led by Sheikh Hasina has down-graded our image over the globe. Where Bangladeshi troops are engaged in keeping peace in the disturbance countries of the world, there Bangladesh might need to take foreign help for holding its general election!
Now the fortune of UN peace keeping Bangladeshi troops is uncertain! Because, as a state we have failed to prove our efficiency to keep peace and safety of our people. So, it could be raised question how could we customize our troops in the international market through United Nations for keeping peace in turbulent territories?
Now the situation has stood in a position that the government either has to declare emergency or Sheikh Hasina has to quit from the Premier s chair. It will also make smoother the way of army to take power, it is apprehended by the observers and politicians.
They also told, When whole of the diplomatic missions in Dhaka are non-cooperating Sheikh Hasina to hold an election without the participation of main opposition party but she follows direction of only Delhi. It is worth mentioning that Indian authority shows their neutrality in the open but supporting Awami League to hold election, even it is one-party in the dark.
Minority people, especially Hindu government officials during last five years have got maximum facilities in case of promotion, posting and state supports, whether they are capable or not. Whereas, hundreds of efficient officers were remained OSD during long 5 years. Their promotions were also not considered due to political partiality. As a result, civil bureaucracy has broken down. Similarly, in many cases seniority has been superseded in case of promotion in army. The same practice was done during the period of BNP regime also. This is one of the main hindrances for the democratic practice.
The ruling government has allowed record number of new media both the print and electronic in one hand, on the other hand, they have regulated freedom of media using different law enforcing agencies. Channel One, Diganta Television, Islamic Television and Daily Amar Desh have been banned by Hasina government.
However, public sentiment this time is in disfavor of Awami League but Hasina tries to gain the support by hook or by crook of the voters, which she got in last election automatically. Even then, If finally Ershad s Jatiya Party doesn t take part in the election then Hasina will definitely ignore the will of majority people , which will never give her peace in ruling the country, even a moment.
Finally it could be comment that Bangladesh is rapidly forwarding towards holding an election under army supervision and UN monitoring.
Foreigners evading tax showing lower income
Staff Reporter: The home ministry has requested the National Board of Revenue (NBR) to set up a checking desk at immigration check posts at the airport to identify tax evading foreign nationals leaving the country. The request was made at an inter-ministerial meeting held at the ministry last week in the backdrop of allegations that the number of foreign tax payers is quite low compared to their huge presence in the country s manufacturing and service sectors. The home ministry has laid emphasis on setting up appropriate mechanisms to identify the foreign nationals working in the country to make sure they are paying taxes in the right amounts. Their local employers are by and large helping them to do it with false statements about their incomes by showing that their incomes are lower.
It is learnt that at least 10,000 Sri Lankan workers have been working in Bangladesh garment sector in various positions like quality controller, supervisor, designer and merchandiser-are evading tax concealing their real income. It is also learnt that they are sending their remittance through Commercial Bank of Ceylon-a Sri Lankan owned bank working in Bangladesh.
The concerns of the home ministry in this regard is legitimate but the question is that how can the NBR and Board of Investment (BoI) work with the immigration at the airport to keep an updated profile on the arrival of foreign nationals and information on whether they have left the country or are working within it.
Representatives from the foreign ministry, industries ministry, NBR, Board of Investment, Bangladesh Export Processing Zones Authority and intelligence agencies attended the meeting. The meeting held the view that the NBR can verify tax documents submitted by the foreign workers at the immigration check posts manually or online. But the question arises as to how far such practices will work at the immigration desk because if anyone can be found leaving the country evading tax it is hardly possible to keep him back and in his place the employer may only be sued.
A proper system can avoid such situations. Some surveys calculate over 3.5 lakhs foreign nationals are working in Bangladesh but most of them are either evading tax or not paying the right amount by showing a lower salary structure with the help of the employers. However, the BoI figure on foreign nationals working in Bangladesh is quite at low at around 12,000 foreign nationals. It showed the lack of coordination between the ministry of home, BoI and the NBR and the loopholes must be plugged to bring discipline in realizing tax from foreign nationals working in Bangladesh. The Income Tax Ordinance-1984 said a foreign national needs to open tax a file if he/she continuously lives in Bangladesh for 90 days in a calendar year.
Bangladesh RMG under high risk 80pc export earnings fetched from garment sector
Enayet Karim: Ready-made garment (RMG) has emerged the single leading export earning sector of the country sharing almost 80% of the total exports in 2012-13, despite the turmoil, severe labour unrest and catastrophe. RMG has also provided 53% job opportunities for the uneducated workforce. But RMG sector of Bangladesh is under high risk for the political disturbance aDetails...
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Do you think that the country is going to face 'state of emergency' soon?
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