Effect of Post Multi Fiber Agreement-A Blessing for Bangladesh: Study of Survival Strategy

Fahmida Saadia Rahman
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Fahmida Saadia Rahman: BRAC University Dhaka, Bangladesh

International Journal of Humanities, Arts and Social Sciences, 2015, vol. 1, issue 2, 92-100

Abstract: This paper will examine the impact on the apparel firms’ growth and performance of major apparel exporting countries with special concentration on that of Bangladesh after the phase out of multi fiber agreement (MFA) on 31 December 2004. Almost all anticipated that removal of MFA may lead to a dramatic drop in the export from Bangladesh and other Asian nations, but the real fact and feature are completely reverse. In fact, our analysis reveals that all major apparel exporters like Italy, Turkey, France, Belgium, Hong Kong – China, South Korea etc lost their export trend since 2008 due to the global recession in their export destinations despite of having preferential access and geographical proximity. Bangladesh not only maintained their past gains, but also improved their performance considerably during both post-MFA and recession periods. This surprising and reverberating growth of Bangladesh’s RMG sector could be attributed to continuous support from her government, lowest wage rate, lower export price, accompanied by stable exchange rate, political stability since 2007. The information in this paper is mostly based on secondary sources. Panel data on export in textile and clothing has been used to evaluate the objective of this paper. The paper has explained the reasons behind such performance of Bangladeshi apparel industry. Moreover it has also incorporated the existing obstacles in this sector and mentioned some policies to overcome from these problems, so that the economy can ensure a sustainable growth in apparel industry.

Keywords: Bangladesh; Multi Fiber Agreement (MFA); Readymade Garments (RMG); Sector; Export; Performance; Blessings (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:apa:ijhass:2015:p:92-100

DOI: 10.20469/ijhss.20006-2

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