The Present Status, Problem and Challenges of Major Industries of Bangladesh: RMG, Lather and ICT

The Present Status, Problem and Challenges Of Major
Industries Of Bangladesh: RMG, Lather And ICT
BABOR AHMAD
Level-4, Semester- i
Department of Economics
Hajee Mohammad Danesh Science & Technology University, Bangladesh.
The Present Status, Problem and Challenges Of Major Industries Of Bangladesh. January, 2018
The Present Status, Problem and Challenges Of Major Industries Of Bangladesh:

RMG, Lather And ICT
Ready Made Garments (RMG) Industry in Bangladesh
Introduction
The readymade garments industry acts as the backbone of our economy and as a catalyst for the development of
our country. We take pride in the sector that has been fetching billions of dollars as export earnings and creating
jobs for millions of people in the country. The “Made in Bangladesh” tag has also brought glory for Bangladesh,
making it a prestigious brand across the globe. Bangladesh, which was once termed by cynics a “bottomless
basket” has now become a “basket full of wonders.” The country with its limited resources has been maintaining
6% annual average GDP growth rate and has brought about remarkable social and human development. It is really
a matter of great interest to many – how the economy of Bangladesh continues to grow at a steady pace,
sometimes even when rowing against the tide. Now we envision Bangladesh achieving the middle-income country
status by 2021. We firmly believe that our dream will come true within the stipulated time and the RMG industry
will certainly play a crucial role in materializing the dream.
Ready Made Garments (RMG):
Ready-made garments are mass-produced finished textile products of the clothing industry.
They are made from many different fabrics and yarns. Their characteristics depend on the fibers
used in their manufacture. Ready-made garments are divided into the following types:
Outer clothing: work wear and uniform, leisure wear, sportswear (e.g. suits, pants,
dresses, ladies' suits, blouses, blazers, jackets, cardigans, pullovers, coats, sports
jackets, skirts, shirts (short- or long-sleeved), ties, jeans, shorts, T-shirts, polo shirts,
sports shirts, tracksuits, bathing shorts, bathing suits, bikinis etc.)
Underclothing (underwear): jersey goods, lingerie (e.g. underpants, undershirts,
briefs, socks, stockings, pantyhose etc.)
Most jersey underwear consists of knitwear made from cotton or synthetic filament warp-knit goods. Knitwear is
divided into fully fashioned and cut goods:
Fully fashioned jersey goods are produced in finished form and size with securely finished edges;
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Babor Ahmad, Student of Hajee Mohammad Danesh Science & Technology University, Bangladesh.
they are a high-quality product, as the loops cannot run at the edges.
Cut jersey goods are cut from tubular knit piece goods and sewn together; they are a lower value
product, as the loops can run at the edges and the fit of the garment is not as good as in the case
of fully fashioned jersey goods as the knitted fabric may twist out of shape.
Present Status or Situation of Ready Made Garments (RMG) Industry in Bangladesh:
Quota system was a great blessing for establishing our garments industry. We were strongly benefited by using
that. As a result we can see a matured garments industry today. But while quota system was approaching to an
end in 2004, there’s so many got upset about the RMG sector of Bangladesh. Though in the latter it can’t be
affected here as the experts were seemed. We conquered the post quota challenges and made that a successful
story. In RMG sector of Bangladesh, there are more than 5000 garment factories (private statistics) at the current
time, employing more than 12 lack labors, where 85% of the labor force is women. But, according to BGMEA the
number of garment factories in Bangladesh around 4000. Now, RMG industry is the country’s largest export earner
with the value of over $24.49bn of exports in the last financial year. It’s great news for us that, Bangladesh is
clearly ahead from other South Asian suppliers in terms of capacity of the readymade garments industry. Though,
there are various types of garments are manufactured in Bangladesh, but all the readymade garments are
classified into two broad categories, where one is woven products and another one is knitted products. Woven
products include Shirts, Pants and Trousers. On the other hand, knitted product includes T-Shirts, Polo Shirts,
Undergarments, Socks, Stockings and Sweaters. Woven garments still dominate the export earnings of the country.
From BGMEA website it’s seen that, Day by day knitted items production is increasing in considerable rate and
now about 40% export earnings has achieved from knitted products.
Having a significant impact on country’s total export as well as on employment, RMG contributed significantly to
the national GDP creating about 4 million employment opportunities, powered by young workers, where most of
who are women. Emerging as one the leading exporter of RMG globally after China and possessing 5% share in the
USD 450-billion global garments market, Bangladesh recorded RMG exports worth USD 28 billion in fiscal year (FY)
2016, with an average year-on-year growth of 13% between FY10 and FY17, According to Export Promotion Bureau
(EPB). RMG industry has impacted the Gross Domestic Product (GDP) of Bangladesh positively by 12.36% of share,
engrossing 80.7% of the total export earnings in the FY17 becoming the biggest strategic sector of the country.
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Source: Export Promotion Bureau (EPB),2017
Export earnings from woven garments stood at USD 3607.31 million during the last quarter of FY17, which is 7.3%
lower than previous quarter as well as 4.4%and 16.7% lower than the same quarter of previous fiscal year and
export target for the quarter respectively. Export earnings from knitwear garments stood at USD 3603.7 million
during the 4th quarter of FY17, which is 8.2% higher than the previous quarter. On the other hand, it is 2.10% and
4.84% lower than the same quarter of previous fiscal year and the export target for the quarter respectively.
Source: MTBiz, 2017
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Source: MTBiz, 2017
The major importer countries of Bangladeshi RMGs are USA, Germany, UK, France, Spain, Italy, Belgium,
Netherlands and Canada. During April-June of FY17, total export to these nine countries stood at USD 6042.0
million, of which 90.4% or USD 5460.45 million is from the RMG (woven 46.6% and knitwear 43.8%) export. During
the quarter under report, RMG export to these nine countries increased by 1.8% compared to the previous quarter
and 4.8% lower than the corresponding quarter of previous fiscal year.
Problems of Ready Made Garments (RMG):
Raw materials: Bangladesh imports raw materials for garments like cotton, thread color etc. This dependence on
raw materials hampers the development of garments industry. Moreover, foreign suppliers often supply low
quality materials, which result in low quality products
Unskilled workers: Most of the illiterate women workers employed in garments are unskilled and so their
products often become lower in quality.
Improper working environment: Taking the advantages of workers’ poverty and ignorance the owners forced
them to work in unsafe and unhealthy work place overcrowded with workers beyond capacity of the factory floor
and improper ventilation.
Most of the garment factories in our country lack the basic amenities where our garment workers sweat their
brows from morning to evening to earn our countries the major portion of our foreign exchange. Improper
ventilation, stuffy situation, filthy rooms are the characteristics of the majority of our factories. The owners profit
are the first priority and this attitude has gone to such an extent that they do not care about their lives. Anybody
visiting the factory the first impression he or she will have that these workers are in a roost.
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Lack of managerial knowledge: There are some other problems which are associated with this sector. Those are-
lack of marketing tactics, absence of easily on-hand middle management, a small number of manufacturing
methods, lack of training organizations for industrial workers, supervisors and managers, autocratic approach of
nearly all the investors, fewer process units for textiles and garments, sluggish backward or forward blending
procedure, incompetent ports, entry/exit complicated and loading/unloading takes much time, time-consuming
custom clearance etc.
Gendered division of labor: In the garment industry in Bangladesh, tasks are allocated largely on the basis of
gender. This determines many of the working conditions of women workers. All the workers in the sewing section
are women, while almost all those in the cutting, ironing and finishing sections are men. Women workers are
absorbed in a variety of occupations from cutting, sewing, inserting buttons, making button holes, checking,
cleaning the threads, ironing, folding, packing and training to supervising. Women work mainly as helpers,
machinists and less frequently, as line supervisors and quality controllers. There are no female cutting masters.
Men dominate the administrative and management level jobs. Women are discriminated against in terms of access
to higher-paid white collar and management positions.
Wages: The government of Bangladesh sets minimum wages for various categories of workers. According of
Minimum Wage Ordinance 1994, apprentices’ helpers are to receive Tk500 and Tk930 per month respectively.
Apprentices are helpers who have been working in the garment industry for less than three months. After three
months, Apprentices are appointed as helpers. Often female helpers are discriminated against in terms of wages
levels, and these wages are also often fixed far below the minimum wage rate. A survey conducted in 1998 showed
that 73% of female helpers, as opposed to 15% of their male counterparts, did not receive even the minimum
wage.
Insufficient of loan: Insufficiency of loan in time, uncertainly of electricity, delay in getting materials, lack of
communication, problem in taxes etc. Often obstruct the industry. In the world market 115 to 120 items of dress
are in demand where as Bangladesh supplies only ten to twelve items of garments. India, south Korea, Hong Kong,
Singapore, Thailand, Taiwan etc, have made remarkable progress in garments industries. Bangladesh is going to
challenge the garments of those countries in the world market.
Unit labor cost: Bangladesh has the cheapest unit labor cost in South Asia. It costs only 11 cents to produce a shirt
in Bangladesh, whereas it costs 79 cents in Sri Lanka and 26 cents in India. Clearly, Bangladesh’s comparative
advantage lies in having the cheapest unit labor cost.
Working hours: Though the wages are low, the working hours are very long. The RMG factories claim to operate
one eight-hour shift six days a week. The 1965 factory Act allows women to work delivery deadlines; however,
women are virtually compelled to work after 8 o’clock. Sometimes they work until 3 o’clock in the morning and
report back to start work again five hours later ar 8 o’clock. They are asked to work whole months at a time the
Factory Act, which stipulates that no employee should work more than ten days consecutively without a break.
Poor accommodation facilities: As most of the garment workers come from the poor family and comes from the
remote areas and they have to attend to the duties on time, these workers have to hire a room near the factory
where four to five huddle in a room and spend life in sub human condition. For four to five workers there is one
common latrine and a kitchen for which they have to pay from Tk=2000 to Tk=2500/-.They share this amount
among themselves to minimize the accommodation expense.
Safety Problems: Because of the carelessness of the factory management and for their arrogance factory doors
used to be kept locked for security reason defying act. Safety need for the worker is mandatory to maintain in all
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the organization. But without the facility of this necessary product a lot of accident is occur incurred every year in
most of the company.
Political crisis: Garments industries often pay dearly for political unrest, hartal and terrorism etc. The international
market has withdrawn quota advantage over garments export form Bangladesh since December 2005. Bangladesh
has to advance cautiously for getting better position of her garments in the world market. Finally destruction of
twin tower in 11, September 2001. Invasion of Afghanistan and Iraq and depression in world Economy have
seriously affected the export trade of Bangladesh.
Price competitiveness: China and some other competitors of Bangladesh have implemented sharp price-cutting
policies in exporting garment products over the last few years, but Bangladesh has failed to respond effectively to
such policies. China was able to drop the export price of 29 garment categories by 46 per cent on average in the
United States within a year, from $6.23 per sq meter in December 2001 to $3.37 per sq meter in December 2002.
Bangladesh needs to respond to such price-cutting policies of its rivals in order to remain competitive in the quota-
free global market.
Lead time: Lead time refers to the time required for supplying the ordered garment products after the export
order has been received. In the 1980s, the usual lead time in the garment industry was 120-150 days for the main
garment supplier countries of the world; it has been reduced to 30-40 days in the current decade. However, in this
regard the Bangladesh RMG industry has improved little; for example, the average lead time is 90-120 days for
woven garment firms and 60-80 days for knit garment firms. In China, the average lead time is 40-60 days and 50-
60 days for woven and knit products respectively; in India, it is 50-70 days and 60-70 days for the same products
respectively.
Challenges for RMG Sector of Bangladesh: Though RMG sector of Bangladesh has achieved the second
spot for the highest number of garments exporter, but it has a lot of problems. The major problems faced by RMG
sector currently is the lack of safety in working place and working conditions for the millions of garments workers.
It’s become a great challenge for the upcoming financial year of Bangladesh. Another important one is political
stability. Two major incidents in RMG sector of Bangladesh are the Tazreen fire and the Rana Plaza collapse, which
have brought the issue of workplace safety to the fore and led all stakeholders to act accordingly. But it’s good
news for RMG sector that, following the unfortunate incidents, various platforms such as the Bangladesh Accord
on Fire and Building Safety, the Alliance for Bangladesh Worker Safety and National Plan of Action have been
formed to improve building and fire safety of Bangladesh’s garment industry. Also BGMEA and BKMEA are working
together here to solve such kinds of problems. They have also taken necessary actions and invested huge amount
of money. It’s a huge responsibility for the government of Bangladesh to ensure working place safety in all the
garments manufacturing factories. If we can’t do it, foreign buyers will refuse to place order here, which will be a
massive blow for RMG sector of Bangladesh. We hope, the government of Bangladesh, BGMEA and BKMEA, with
the support of global brands and international development partners, will be able to ensure the safety of the RMG
industry and maintain the momentum of socio-economic development in the country. Political stability creates a
negative impact on RMG sector of Bangladesh. If it continues, it will be a massive blow to destroy our most
valuable sector. So, political leaders should come out immediately to solve such kinds of problems.
Challenges from competitor’s steps:
• Pakistan started enjoying GSP Plus in EU from 1 January 2014
• Philippines was granted EU GSP Plus from 1 January 2015
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• India is negotiating FTA with EU
• Review of the Sustainability Compact has been held on 28 January 2016
• US Government to review its GSP Action Plan for Bangladesh and reinstate GSP in favor of us
• India fully withdrawn 12% Central Excise Duty
• Indian Govt. has announced Rs.6000 crore incentive package for their apparel industry.
• India provides special incentives through Technology Up-gradation Fund Scheme
• Vietnam has improved a lot on their productivity. 1.5 million RMG workers produced USD 17 billion dollar worth
of goods last year
• The Govt. of Vietnam provides 10 different types of incentive to remove the difficulties in doing business, like tax
rebate, escargot on direct air cargo shipment from Bangladesh to a few countries
Conclusion:
It’s a prime duty for us to provide a perfect working place for the readymade garments sector of Bangladesh which
has given our economy a strong footing, created jobs for millions of people, especially for women, lifted them from
the abyss of chronic poverty and given them a magnificent life. Now what we have needed to do is dealing with all
the challenges facing our readymade garments industry, paving the way for its further development.
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Leather Industry in Bangladesh
Introduction:
Bangladesh is a developing country with a population of about 152.5 million in a total area of
147,570 sq.km making it one of the most heavily populated countries of the world. The overall
economy of Bangladesh has registered a steady improvement with more than 6% average
growth during the last five years (BBS, 2013). The industrial sector has been an important
contributor to the country’s GDP, its share standing at 28.6% in 2011. Bangladesh has a long
established tanning industry which produces around 2-3% of the world`s leather from a ready
supply of raw materials. The country is therefore an established and attractive location to
source and outsource the manufacture of finished leather products. The leather industry is
ideally suited to Bangladesh with its abundance of labor and natural resources at internationally
competitive rates.
Leather
Leather is a durable and flexible material created by tanning animal rawhide and skin, often
cattle hide. It can be produced at manufacturing scales ranging from cottage industry to heavy
industry. People use leather to make various goods—including clothing (e.g., shoes, hats,
jackets, skirts, trousers, and belts), bookbinding, leather wallpaper, and as a furniture covering.
It is produced in a wide variety of types and styles, decorated by a wide range of techniques.
Present Status or Situation of Leather Industry in Bangladesh:
At present, there are about 220 tannery units in Bangladesh and they use locally available raw hides and skins. Of
them 114 are large and medium units (by local standards) and are registered with the Directorate of Industries.
Others are mostly of small and cottage type and are not on the register of the government. About 150 tannery
units are located at Hazaribag of Dhaka in only 50 acres of land popularly known as tannery estate. According to
the records of the Bangladesh Tanners Association, about 3,000 workers are employed in the tanning industry.
Besides, there are about 100 qualified technologists including foreign nationals who are working in different
tanneries. Total capital invested in the tannery industry is estimated at Tk 2.5 billion, of which government/bank
finance is about Tk. 1.2 billion. About 1,500 persons are involved in the process of collecting raw hides and skins
and making them available at tannery units. About 100 organizations import chemicals for use in tannery industry.
Bangladesh produces approximately 100-150 million sq feet of raw hides and skins, about 85% of which is exported
in crust and finished form. The rest is used for producing leather goods to cater to the domestic market The
relocation of tanneries in Hazaribagh to the leather industrial park in Savar on the outskirts of the capital is likely to
be completed by this year. The relocation work is going on in full swing and 20 factories have already completed
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construction of their new premises. The progress is slow due to shortage of fund. It will cost about Tk6,000 crore
to relocate the factories and to start production in the new establishment. The Ministry of Industries decided to
relocate the tannery factories from their current location in the capital’s Hazaribagh area amid pressure from the
rights group, environmental activists and buyers concerned with its hazardous effects on the public health and
environment. It allocated plots to 155 tannery owners through Bangladesh Small and Cottage Industry Corporation
(BSCIC) at the leather industrial park, established on a 200-acre land in Savar. The government is processing the
allotment plots to the rest of the tanneries in Hazaribagh that did not get a place in Savar. Increasing interest of
buyers has opened up an opportunity for footwear and leather industries of Bangladesh. The production of
leather-made items has been increasing in the country. The sector has the potential for becoming the second
largest foreign currency earner after ready-made garments. Industry analysts believe that Bangladesh's over one
billion footwear industry has the potential to grow to a 15-billion dollar vibrant industry within a decade. According
to EPB data, the leather industry has crossed the record $1-billion mark in 2012–13. Bangladesh earned $1.29
billion from exports of leather, leather goods and footwear in 2013–14 fiscal. The export target for 2014–15 has
been set with an increase by 4.2 per cent. This rate of growth needs to be progressively accelerated to attain the
target of $5 billion in 2020.[4] Exports of leather and leather goods crossed $1 billion for the second year in fiscal
2014–15, according to data from the Export Promotion Bureau.
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Problems of Leather Industry in Bangladesh:
i) Selective and limited Access to Finance

ii) Lack of Skilled Workforces
iii) Lack of access to latest technology and machinery facilities
iv) Insufficient services and supports from BIOs.
v) Lack of education, training
vi) Absence of entrepreneurial skill, rent seeking mentality.
vii) Poor linkage and coordination between/among SMEs and lead firms
viii) Absence of market information and promotion, inadequate marketing knowledge of
local leather entrepreneurs
ix) Inefficient/unskilled hide collection systems
x) Poor/or no R&D, laboratory facilities
xi) Inadequate training facilities and centers
xii) Vulnerable SMEs; poor enterprise level cooperation
xiii) No international brand image
xiv) Poor compliance practice
xv) Poor infrastructure, power
xvi) Weak accessories/chemical industry
xvii) Dependence on chemical/accessories import
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xviii) Skilled designers and facilities for product design and development are unavailable
xix) High rate of interest on term loan and working capital, and many limiting factors to
have access to finance
xx) Footwear accessories (such as tapes, trims, buckles, linings, shoe-last, etc.) are not
locally available
xxi) Limited product development and market orientation
xxii) Complicated rules and regulations which affect lead-time and acquisition of inputs
Challenges for Leather Sector of Bangladesh:
i) Absence of integrated policy; no long term policy regarding Common Facility Center
(CFC), SME cluster development, Branding/promoting Bangladeshi leather products
ii) No dedicated skill development institute/ vocational training center for workers and
supervisors
iii) Political instability, corruption
iv) Lack of backward linkage industry for chemicals/accessories and substandard quality
of the products.
v) Increasing import of low priced synthetic products
vi) Illegal export of raw hides/skins
vii) Smuggling and under invoicing of products
viii) Potential buyers stringent stands for compliances, and delay in building Common
Effluent Treatment Plant (CETP) at leather village, Savar, Dhaka
ix) Emergence of alternative sources like Myanmar.
Conclusion:
Bangladesh leather industry is dominated substantially by the domestic investment which is mostly export-
oriented. The leather includes some ready-made garments, although that aspect is continued mainly to a small
export-trade in “Italian-make” garments for the US market. Footwear is more important in terms of value addition.
This is the fast growing sector for leather products. Presently Bangladesh produces between 2 and 3 percent of the
world’s leather market. Most of the livestock base for this production is domestic which is estimated as comprising
1.8 percent of the world’s cattle stock and 3.7 percent of the goat stock. The hides and skins (average annual
output is 150 million sq.ft.) have a good international reputation. Foreign direct investment in this sector along
with the production of tanning chemicals appears to be highly rewarding. Having the basic raw materials for
leather goods as well as for the production of leather shoe, a large pool of low cost but trainable labor force
together with tariff concession facility to major importing countries, Bangladesh can be a potential off shore
location for leather and leather products manufacturing with low cost but high quality. Provision of newly
announced infrastructural facilities through establishment of an integrated Leather Park and simultaneously,
growth in the global demand, opportunities for investing in and setting up export-oriented leather industry in
Bangladesh is definitely attractive. Foreign investors are welcome to capitalize on this opportunity.
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ICT Sector In Bangladesh
Introduction:
The ICT sector has motivated entrepreneurs to gravitate towards this industry which provides better employment
opportunities, opens new trade horizons and embarks on track of success through education and awareness. IT
companies have created a sizable market space in service industries like telecommunications, retail and wholesale
business, healthcare, education, publishing and real estate. The growth in the software industry has been driven by
this growing IT automation demand in the domestic market. The impressive trends in software exports in recent
years played a deterministic role as well. Bangladesh has made major strides in laying the groundwork for a diverse
and successful outsourcing market, particularly in 2010 and 2011. A new trend is the individual/group-based
outsourcing, also known as freelancing. These are informal initiatives taken by young IT professionals and students
to acquire clients through various online marketing channels. Bangladesh's ICT sector is a glimmering example of
what can be achieved if government's goodwill and a skilled workforce work together. Rapid development in the
ICT sector also reflects a rapid growth of skilled manpower which ultimately accelerates the economic growth.
Despite many challenges such as political instability, financial crisis and power shortages, many large and
ambitious projects are going on to achieve digital Bangladesh. If the government functions at the current pace, we
would like to hope that within a few years the ICT sector will be the largest revenue earner for Bangladesh.
ICT: ICT Stands for "Information and Communication Technologies." ICT refers to technologies that provide access
to information through telecommunications. It is similar to Information Technology (IT), but focuses primarily on
communication technologies. This includes the Internet, wireless networks, cell phones. The term ICT is also used
to refer to the convergence of audio-visual and telephone networks with computer networks through a single
cabling or link system. There are large economic incentives (huge cost savings due to elimination of the telephone
network) to merge the telephone network with the computer network system using a single unified system of
cabling, signal distribution and management., and other communication mediums.
The broadness of ICT covers any product that will store, retrieve, manipulate, transmit or receive information
electronically in a digital form, e.g. personal computers, digital television, email, robots.
Present Status or Situation of ICT Sector In Bangladesh:
The ICT industry in Bangladesh has grown to 250,000 people, with 1500+ companies and revenues near USD 500
million. On top of this are the legions of freelancers registered in platforms like Upwork and Elance who have
gained a reputation for providing quality service at affordable costs; albeit at the lower tier job categories.
The fundamentals of the industry are summed up in the diagram below.
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Source: BASIS
The fundamentals above have been supported by coherent and supportive government policy, push from the
industry and the leadership of associations like BASIS. Being an industry with a global outlook, total exports are
crucial to the long term viability of the ICT sector and should be given due importance. The sector currently brings
in a paltry USD 132.5 million, which is dwarfed by the billions earned by the top exporting sector of the country,
RMG. However, there is scope for enormous expansion in the sector, driven by insatiable demand from developed
and developing countries alike as all facets of life and business move into the digital realm, taking with it the
demand for digitization, automation and economization of IT. Currently, the USA, UK, Canada and Australia are the
top outsourcing destinations for Bangladesh.
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Moreover, this could also lead to the creation of high income jobs that would encourage foreign trained
Bangladeshis to return (thereby reversing the brain-Drain), who can contribute to R&D, and help attract foreign
companies to come. The IT industry also uses higher skill, pay better, can be more stable with greater potential for
growth than the RMG sector, which is more vulnerable to lower cost regions in Asia and Africa. Development of a
more professional sector will encourage youth to seek better education/IT training, generating higher income.
Bangladesh can also receive huge remittances from exporting IT labour.
According to BASIS survey, there are over 800 registered software and ITES (IT Enabled Service) companies in
Bangladesh. There are another few hundred of unregistered small and home-based software and IT ventures doing
business for both local and international markets. Figure 2 shows number of enterprise, revenue, total human
resource employed in the industry and industry revenue proportion of Bangladeshi Software and ITES Industry.
Figure 2: Bangladesh Software and ITES Industry
Please turn over……..
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The total industry size is estimated to be around Tk. 1,800 crore (US$ 250 million). Approximately 30,000
professionals, majority IT and other graduates, are employed in the industry. Though, compared to other
traditional mainstream industry, the contribution for overall employment creation is not significantly high, but if
considered in terms of creating high quality employment (average monthly compensation over Tk. 15,000 per
month), software and IT service industry is surely one of the top graduate employment sectors in the country.
Following table 01 shows the total export of IT/ITES Services under the heading of Computer Services which
includes total receipt of foreign currency (equivalent to Bangladesh‘s expert) was US$ 125.54 Million in FY 2013-14
out of which computer software was US$ 69.41 Million while Computer data processing and computer consultancy
services were exported US$ 47.56 million and US$ 8.57 million respectively. Bangladesh has maintained an
excellent growth rate in this sector.
Table01: Total Export of IT/ITES Services
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Problems of ICT Industry in Bangladesh:
The IT industry is a relatively new sector in the country's economy. Though it is yet to make tangible contributions
in the national economy, it is an important growth industry. IT sector is now the 3rd big sector from where we get
foreign currency .But After 2 or 3 years it will be the 1st sector .Every year so many educated people ,students and
also the government trying to improve the sector .No other sector rising as much as the IT sector in Bangladesh
.But the sector’s rising still now facing many problems .The IT sector related people trying to solve the problem
.But After all we will be hopeful about the IT industry in Bangladesh.
i) Village people don’t know about IT much: 60% people of our country population lives in village. But it is a
matter of sorrow that they don’t know well about technology. So their children don’t know about technology
good. If we can be successful to use to them about technology, it will be a great achievement.
ii) High price of bandwidth: High price of bandwidth is another problem of our IT industry. If we think about the
world or at least about the south Asia , we will se that the bandwidth price is high than any other countries. We
know that bandwidth like a fuel of our technology sector.
iii) High price of IT products: Though we achieve many success in IT sector but still now IT products such like PC ,
Laptop ,Mobile ,Printer’s price is high. We need to keep this products price at a reasonable level.
iv) Electricity problem: Electricity problem is one of the most problem in our country.so simply it is a problem in IT
sector. For the crisis of electricity ,many IT industry can not create their product. In village the electricity problem is
more more bigger than the city area. World Development bank did a research and they said that the growth of our
IT industry 6% slower because the crisis of electricity.
v) Lack of practical knowledge about technology;
In the IT sector practical knowledge is must. In this sector practical knowledge is more valuable than the
theoretical knowledge. But in Bangladesh there is a problem of the practical knowledge. Lack of practical
knowledge about technology trying to stop our success.
Vi) Need land to build a factory: Bangladesh is a small country. So we do not get many land to build a factory.
Because the crisis of land we don’t start big factories. This is a problem. Few month’s ago Indian TATA company
came Bangladesh and they want land so that they build a factory. But we don’t able to give them.
vii) Crisis of hardware to use full bandwidth: Every year we buy bandwidth what is so much costly but
unfortunately we do not use the full bandwidth. It will be unbelievable for many people but it is true that we use
just 40% of bandwidth. Other 60% is unused because we have no technology to use the 60%.
viii) Political reason: Political various reason is also a cause to obstacle our IT industry .Our country’s political
situation does not remain stable all the time. Due to this reason our IT industry will not develop.
ix) Foreign Exchange policy: Foreign Exchange policy is another major problem. This policy hinders business when
it is required to make payment for import of software, books etc. Enterprises also worry about the cost of internet.
Many entrepreneurs feel that the cost of internet is much higher than other competing countries.
x) Lack of Promotion of Country Image or Branding: Lack of Promotion of Country Image or Branding is one of the
major problems that many entrepreneurs feel to be fixed out. The issue is not responded by many entrepreneurs,
the problems ranked highly if picked by the respondent. As our average score compensates the missing values or
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by the mean score of respondents and the mean of respondents is high, the averages score gets high. It is
important to note that the slogan of ―Digital Bangladesh‖ has promoted the country image in IT sector by a great
deal. Now some more Branding Campaign needed.
xi) Access to finance: Access to finance is another significant problem. It is hard to get loans from banks.
Information on 17 enterprises shows that only one of them took bank loan at the beginning of business. As a
service sector, the output is not as visible as goods sector which is a real problem. Besides, Enterprises also lack
proper financial reporting which further discourages bankers to provide loan.
Challenges for ICT Sector of Bangladesh:
i) Rise of neighbor nations in this field leading to their IT industry achieving a higher international
market share of the outsourced services
ii) With communication being enhanced to such a level, location is now no longer an issue. Hence
competition base is much more widened.
iii) With the IT services moving up the value chain ladder there are every possibility that our skill
personnel base may become redundant owing to obsolete technology.
iv) Other ITES destinations such as China, Philippines and South Africa could have some competitive
advantages on the cost factor.
v) Slowdown of international demand
Conclusion:
As an emerging source for IT and ITES outsourcing destination and as a developing market, Bangladesh has a fair
set of weaknesses. Most of them come from lack of skills, know-how and adequate investment in the country.
Keeping these weaknesses in mind Government has taken different plans, strategies, and projects to facilitate IT
sectors. Government's "thrust sector" initiatives for ICT include exemption of income tax, value-added tax, and
customs duty for ICT industry establishment of national ICT policy, organizing the ICT National Taskforce (the chair
is the Prime Minister) establishment of ICT incubation center, long-term equity fund and short term working
capital financing, enactment & Copyright Law etc. Several pilot initiatives are being formulated and implemented
under intense supervision o respective Government agencies. Special Hi-Tech and Software Technology Parks are
being built by the government to facilitate all the infrastructural supports needed by outsourcing companies. The
future of the IT and ITES outsourcing industry is very bright provided it overcomes the challenges, weaknesses and
threats cited above. To make all these plans, policies and initiatives to be a successful one, government needs a
collaborative action plan to prioritize the impediments faced by this sector as identified in this study and various
others study and undertake concrete follow up actions.
Page | 18
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The Present Status, Problem and Challenges Of Major

Industries Of Bangladesh: RMG, Lather And ICT

The Present Status, Problem and Challenges Of Major Industries Of Bangladesh:

Ready Made Garments (RMG) Industry in Bangladesh

Ready Made Garments (RMG):

Present Status or Situation of Ready Made Garments (RMG) Industry in Bangladesh:

Source: Export Promotion Bureau (EPB),2017

Source: MTBiz, 2017

Source: MTBiz, 2017

Problems of Ready Made Garments (RMG):

Challenges from competitor’s steps:

• Pakistan started enjoying GSP Plus in EU from 1 January 2014

• Philippines was granted EU GSP Plus from 1 January 2015

• India is negotiating FTA with EU

• Review of the Sustainability Compact has been held on 28 January 2016

• India fully withdrawn 12% Central Excise Duty

• India provides special incentives through Technology Up-gradation Fund Scheme

Leather Industry in Bangladesh

Present Status or Situation of Leather Industry in Bangladesh:

Problems of Leather Industry in Bangladesh:

i) Selective and limited Access to Finance

Challenges for Leather Sector of Bangladesh:

ICT Sector In Bangladesh

Present Status or Situation of ICT Sector In Bangladesh:

The fundamentals of the industry are summed up in the diagram below.

Figure 2: Bangladesh Software and ITES Industry

Please turn over……..

Table01: Total Export of IT/ITES Services

Problems of ICT Industry in Bangladesh:

v) Lack of practical knowledge about technology;

Challenges for ICT Sector of Bangladesh:

23. Bangladeshi Leather Industry: An Overview of Recent Sustainable Developments (PDF

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