External Barriers Part – 02

Image by The Library of Congress via Flickr

The Global Financial Turmoil –

This seems to have weighed on Bangladesh’s lifeline, garments, as buyers are deferring orders from the countries, where stores have reported declining sales. “September is a golden month for knitwear exporters, but this year’s orders appear to be declining for the first time in four years,” said Fazlul Hoque, president of BKMEA. Normally we manufactured low value added items like under garment & knit item (used by the foreign poor /middle class people) so it’s alarming our target consumer might reduce their rate of consumption.

Phasing Out of MFA –

It is feared that this will pose a major threat to Bangladesh’s RMG and Knitwear industries because of the potential cut-throat competition from the cotton-producing giants like India, China, Egypt and Pakistan. Development of adequate numbers of backward linkage industries with sufficient competitive advantage is also not a realistically achievable option for Bangladesh at this stage.

Withdrawal of GSP Facilities –

The Generalised System of Preferences (GSP) is designed to promote economic growth in developing nations by giving preferential duty-free entry of their products to the US market. Foreign Affairs Adviser Dr. Iftekhar Ahmed Chowdhury said on 18.07.08 that “Bangladesh would continue to enjoy the GSP facilities as before” in the United States and we will continue to work diplomatically with our American friends for further extension.”