Bangladesh's central bank has made recommendations for raising labor productivity and adoption of cost-effective technologies in the country's apparel units to face growing challenges in the post-MFA (Multi-Fiber Arrangement) era.

The Bangladesh Bank in a study published in its July-September quarterly noted the higher competitiveness of Indian and Chinese apparel units which has constituted a threat to Bangladesh's factories in global ready-made garments (RMG) market, the Daily Star reported on Sunday.

India and China enjoy relatively high labor productivity and apply more capital intensive modern technologies, the central bank said.

The bank said efficient port services are needed to help apparel factories reduce lead time to become competitive.

The bank suggested increase in workers' salaries to enhance labor productivity.

"Wage should be revised along with other benefits commensurate with cost of living," the newspaper quoted a study of the central bank as saying.

Bangladesh's RMG products are highly concentrated on low value items such as men's shirts, T-shirts, women's skirts and blouses.

"These items have relatively low rate of profit and face fierce competition from other countries' producers in the post-MFA world, " the bank said in the study.

MFA was introduced in 1974 and set up a system of quotas designed to protect the apparel industries in developed countries. Expiring on Jan.1, 2005, many poor countries that had benefited from quotas have been forced to compete with producers elsewhere.

According to the bank, one of the important weaknesses in Bangladesh RMG sector is the relatively inadequate development of backward linkage industries.

There are insufficient numbers of establishments such as textiles and accessories industries in the RMG sector and they can barely meet the local requirement.

"Our laborers and managers have acquired skill. Therefore, the garment workers have already proved themselves as efficient in needlework," the study said.

It also said the knitwear products enjoy advantages over woven items as technology used in knitwear is relatively simple, inexpensive and highly flexible.

Bangladesh's readymade garments industry has emerged as a major export sector in the past two decades. Readymade garments account for 9.5 percent or more of the country's GDP.

Source: Xinhua