Women's Employment - United Nations Research Institute for Social ...

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Female employment under export-propelled industrialization With the phasing out of the MFA and the elimination of quotas on these major categories of exports, some of the traditional RMG exporters, such as Bangladesh, are expected to face serious competition from a number of newcomers, which, under the MFA, faced restricted entry in the US and Canadian markets (Blackhurst et al., 1995). Bangladesh’s RMG firms currently import a large proportion of their raw materials (grey fabrics) from countries such as China, India and Thailand under back-to-back L/Cs. In a quota-free environment, however, these countries may increase exports of finished apparel to North American markets. Whether Bangladesh’s RMG sector will be able to withstand the challenge from these countries in the post-MFA period is thus an issue of critical significance for the future of the industry. The key issue here will be the competitive strength of Bangladesh’s textile sector in general, and its RMG sector in particular. If we juxtapose the phase-out programme on the structure of apparel exports from Bangladesh, we find that most items of export interest are to be integrated into the WTO in the last year of the phaseout (2004). Bangladesh thus has about four years to prepare for the post-MFA trade regime. Other market access problems may also threaten the future performance of Bangladesh’s RMG sector. For example, Bangladesh’s exports enjoy preferential access in many European markets under the EC’s Generalized System of Preference (GSP) schemes. These provide Bangladesh access to the EC market at zero tariffs. It is notable that, although substantial across-the-board reductions in tariff rates were negotiated in the Uruguay Round, reductions on textiles and apparel were relatively shallow. For example, tariff rates on imports of textiles and apparel by EC countries have remained relatively high, at about 12.5 per cent. Preferential treatment under the GSP allows EC importers to claim a duty rebate equivalent to 12.5 per cent of import value on imports of garment from Bangladesh. In recent years this preferential treatment has contributed to robust growth of Bangladesh’s apparel sector through substantial market expansion in the EC market. The EC accounts for about 35 per cent of Bangladesh’s global exports of apparel. However, problems of market access recently faced by Bangladesh indicate that such facilities cannot be expected on a guaranteed basis. For example, access to the EC’s GSP scheme is subject to compliance with “rules of origin” (ROO) requirements. Under these requirements, a two-stage transformation is required for woven RMG and, for knit RMG, a three-stage transformation (cotton to yarn, yarn to fabric, fabric to RMG) is required. Since Bangladesh’s 245
Women’s employment in the textile manufacturing sectors of Bangladesh and Morocco indigenous capacity in spinning is negligible (about 5 per cent of total requirement), it is not possible to comply with the three-stage criterion. At present, most of the yarn used by the knit RMG factories of Bangladesh is imported (mainly from India). Although the EC ignored this non-compliance until recently, it has had to revise its position under pressure from Bangladesh’s competitors. In October 1997, the Government of Bangladesh reached agreement with the EC under which Bangladeshi entrepreneurs would refund the duties (amounting to about US$ 60 million) previously waived by the EC. Although the EC has agreed to a flexible approach to this issue, the incident reveals the types of problems countries like Bangladesh may encounter in the global market — despite trends towards liberalization in the post-MFA phase. There is every indication that Bangladesh’s apparel sector currently stands at an important crossroads. As we have seen, the wages of RMG workers in Bangladesh are the lowest in South Asia. But because backward linkages in the RMG sector are few, the local value addition has so far been very small — only 25-30 per cent of gross exports. Bangladesh can produce locally only 4 per cent of the 2.2 billion square metres of fabric required by its RMG factories. With quotas phasing out, and preferential treatment for exports coming under threat, continued vibrant growth of Bangladesh’s apparel exports hinges on the creation of backward linkage in the textile sector. It has been estimated by the Ministry of Textiles (1993) that the country needs to set up, by the year 2000, 146 yarn units to meet 40 per cent of related demand, 109 fabrics units to meet 100 per cent of domestic demand and 199 dyeing/finishing units to fully absorb locally made fabrics. This would require an investment of more than US$ 4 billion. Relevant in this context are the composite textile mills that have recently been commissioned by the private sector in Bangladesh. A number of export-oriented textile mills are also being set up. Import data supply evidence of this trend: in 1995-96, Tk 5,579 million worth of L/Cs were opened for textile machinery; the corresponding figure for 1996-97 was Tk 5,776 million. Between 1994-95 and 1996-97, Tk 12,061 million-worth of (both woven and knit) textile-related machinery was imported by the private sector (Centre for Policy Dialogue, 1998). This is an indication that the private sector is indeed responding to opportunities for enhancing backward linkages in the textile sector in Bangladesh. Furthermore, negotiations under the aegis of SAPTA (the South Asian Preferential Trading Arrangements) also envisage duty-free access of Bangladeshi products (including textiles) 246
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Women’s Employment in the Textile
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This United Nations Research Instit
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Acknowledgements Many people have b
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notwithstanding the inertia of the
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Carol Miller is a policy analyst on
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xii VII. Contribution of different
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Introduction 1 Introduction 1 Shahr
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Introduction Table 1: Basic indicat
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Introduction women have been tradit
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Introduction The chapters on Bangla
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Introduction occurs, on average, at
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Introduction women workers related
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Introduction in low-income countrie
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Introduction by repaying their “d
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Introduction participate in labour
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Introduction their bargaining power
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Introduction processing zones hypot
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Introduction IV. The case studies T
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Introduction experience in garment
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Introduction V. Conclusion Although
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Introduction improved technology. T
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Introduction References Afsar, R. (
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Introduction Household Power Relati
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Wage discrimination by gender in Mo
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Gender and employment in Moroccan t
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Gender dimensions of labour migrati
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Table 1: Total number of male and f
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Becoming a garment worker 5Becoming
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Becoming a garment worker garment w
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Becoming a garment worker Table 1:
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Becoming a garment worker 2. “I e
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Becoming a garment worker out that
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Becoming a garment worker being. Th
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Becoming a garment worker support t
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Becoming a garment worker they firs
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Becoming a garment worker V. Conclu
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Becoming a garment worker is a job
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Becoming a garment worker Endnotes
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Becoming a garment worker Cole P. D
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Women’s employment in the textile
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