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

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  • RAHMAN, FAHMIDA SAADIA

    (BRAC University Dhaka, Bangladesh)

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.

Suggested Citation

  • Rahman, Fahmida Saadia, 2015. "Effect of Post Multi Fiber Agreement-A Blessing for Bangladesh: Study of Survival Strategy," International Journal of Humanities, Arts and Social Sciences, Dr. Mohammad Hamad Al-khresheh, vol. 1(2), pages 92-100.
    • Handle: RePEc:apa:ijhass:2015:p:92-100
    DOI: 10.20469/ijhss.20006-2
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    References listed on IDEAS

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    1. Rhee, Yung Whee, 1990. "The catalyst model of development: Lessons from Bangladesh's success with garment exports," World Development, Elsevier, vol. 18(2), pages 333-346, February.
    2. Nordås, Hildegunn Kyvik, 2004. "The global textile and clothing industry post the agreement on textiles and clothing," WTO Discussion Papers 5, World Trade Organization (WTO), Economic Research and Statistics Division.
    3. Gereffi, Gary, 1999. "International trade and industrial upgrading in the apparel commodity chain," Journal of International Economics, Elsevier, vol. 48(1), pages 37-70, June.
    4. Mr. Montfort Mlachila & Yongzheng Yang, 2004. "The End of Textiles Quotas: A Case Study of the Impacton Bangladesh," IMF Working Papers 2004/108, International Monetary Fund.
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    Cited by:

    1. AKM Asaduzzaman Patwary ∗, 2020. "Private Sector SMEs in Realizing SDG 1- "No Poverty" in the Context of Bangladesh," International Journal of Humanities, Arts and Social Sciences, Dr. Mohammad Hamad Al-khresheh, vol. 6(6), pages 274-288.

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