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Separate Ministry for RMG [Editorial on Financial Express]
With the global economy showing some signs of recovery in recent months from the crisis, the exports of Bangladesh's readymade garments (RMG) have remarkably picked up. But some domestic hurdles are still in place. The immediate past president of the Bangladesh Readymade Garments Manufacturers and Exporters Association (BGMEA), while speaking at a farewell reception late last week, pointed out some such problems like bureaucratic snags and infrastructural deficit that "are slowing down the normal growth of the RMG sector". He demanded the creation of a separate ministry for the RMG sector. He lamented that the RMG factory owners had to spend hours after hours for getting the necessary paper works, relating to shipment, investment and utilities, done in government offices.
The former BGMEA top boss also disclosed a few statistics about the staggering additional costs that the RMG owners had to count due to inadequate infrastructures, high lending rates, soaring cotton prices and mismanagement at the country's main seaport. According to him, last year RMG exporters had to spend an extra Tk.20 billion on air shipment to meet the buyers' deadline. The production cost in the RMG sector has gone up by at least 45 per cent because of power and energy crisis. The crisis had forced the RMG units to spend an estimated Tk 40 billion on fuel oils last year to operate their own generators to cope with frequent power outages.
The problems, as has been cited by the immediate past president of BGMEA, do thus illustrate amply a deep-in-the-mire operational situation for the country's export-oriented readymade garments (RMG) sector, which is in no way, unlike the case in other major areas in the economy. A host of factors, domestic and external, has been hurting the RMG sector in particular. Notwithstanding this, it has emerged as the largest contributor to the country's export earnings, thus serving as one strong source of its economic growth. The sector is only second to agriculture as far as employment generation is concerned. The RMG exporters are otherwise helpless about meeting the challenges of negative developments in the international market; they have no control over the exogenous factors like the shrinking demand for apparels in the recent times in the developed markets that were hit by one of the worst financial crisises in the world's history.
But the problems on the domestic front are different. These can - and should - be addressed to a great extent through coordinated policy-actions. In this context, the demand for setting up a ministry exclusively for the RMG sector to help it overcome the problem of red tape, in particular, has been a long-standing one, by the related industry circles. Many in this sector tend to believe that considering RMG's contribution to the economy, the demand is justified. But one point for consideration here is whether the formation of a separate ministry for this particular sector will be of any practical help as far as power and port situations are concerned. It might be helpful in expediting the paper works, provided the officials manning the ministry are sincere and dutiful - the qualities that are rare in Bangladesh bureaucracy. There are ministries that are meant exclusively for certain sectors. But the situation there is hardly any different from what is prevailing in ministries that are handling multiple sectors.
Prior to establishing any exclusive ministry for any sector, it is of utmost importance to reform the bureaucracy. Committees and commissions have been galore since independence of the country to reform the public administration. But nothing has happened. In most cases, the reports prepared by those bodies have been successfully pushed under the rug. It is unlikely there would be a fresh attempt anytime soon to bring about dynamism in the country's civil administration. And as far as power and energy situation is concerned, all, including those in the RMG sector, would have to keep their finger crossed.
EDITORIAL: Financial Express, Wed, 30/03/2011
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1 comments:
"What would be the benefit???"... that's a question. Another ministry means an another minister from the same source. But I deeply expect such.
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