Bond licence rules need to be eased for growth of RMG sector: Seminar

The bond licence rules need to be eased for the expansion of businesses as 4,187 bond licences were inactivated over the last 14 years and only 1,558 were issued new, according to a new study revealed today (17 February).

Unlocking the bond licences is also very cumbersome as many bureaucratic processes are involved here, said Mohammad Hasan in his book 'Bangladesh RMG and Sustainable Development'. 

However, the bond licence is one of the major pillars for the growth of the garment sector in Bangladesh, said Hasan who launched his book at a seminar held at the Economic Reporters' Forum (ERF) in Dhaka. 

Suggesting for simplifying the bond facility, Hasan said few other major challenges in the garment sector are gas crisis, ease of doing business, bureaucratic tangles and not being well informed about the export credit guarantee scheme. 

He also suggested a regional minimum wage structure for the garment workers instead of central one as the cost of living and expenses of the workers varies from area to area. 

Bangladesh's share in global garment trade is below 7% which indicates that there is an ample opportunity to grow even within the garment sector, said Faruque Hassan, president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), at the book launching ceremony. 

Vietnam has grown in the garment business with foreign direct investment, but in the case of Bangladesh more than 95% investment in the garment industry is made by the local investors, Hassan said. 

Hassan is expecting Bangladesh's global share in garment business will be much higher in the WTO's estimate of 2023 as China is losing its market share. 

The BGMEA chief, however, said depending on a single product is not good for the economy as it needs to diversify export products to other sectors as well. 

Mohammad Hatem, executive president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said the Bangladesh Bank should issue a circular to stop the option of deferral payment by the international clothing retailers and brands to the local garment suppliers. 

Because, in many cases, the international retailers and brands pay the local suppliers after selling the goods after six months for which the garment suppliers face difficulties, Hatem also said. 

Mayeesha Mahmud, director of Cotton Group, said the book is helpful for everyday business processes. The book also sheds light on the unparalleled growth of the garment sector in Bangladesh. 

Ferdaus Ara Begum, chief executive officer of (CEO) of Business Initiative Leading Development (BUILD), said the garment sector's target of exporting $100 billion by 2030 is mentioned in this book. 

She also said unlocking the bond licence is very difficult and the rules need to be relaxed for the interest of the growth of business. 

Akhter Hussain, former chairman of the Department of Public Administrator of the University of Dhaka, said the book touches many sides of the economy. 

Ilahi Dad Khan, former bureaucrat and editor of the book, said not many books have been written on the garment industry in Bangladesh although the sector is the highest contributing area in Bangladesh economy. 

ASM Tareq Amin, editor and publisher of Textile Today Bangladesh, and Professor Dr Md Fayyaz Khan, vice-chancellor of Bangladesh University of Business and Technology, also spoke on the occasion. 

Mohammad Refayet Ullah Mirdha, president of ERF, moderated the seminar.