Readymade Garments Export to the United States of America and the European Union- An Analysis based on the Pre-and-Post-Recession Scenario of Bangladesh

Abstract

Ready-made garment (RMG) is the largest and most pivotal export item of
Bangladesh that constitutes four-fifth of the total export earnings for the country.
The global recession of 2007-08 has kept an adverse effect on the global economy.
The export performance of most of the countries of the world has been significantly
affected by the recession. The two giants of the global economy, the U.S and the EU
market shrank very substantially which has reduced the import demand of the RMG
items from the rest of the world. This reduction in import of U.S and EU market has
substantially reduced the export of other countries of the world economy. But most
surprisingly, the RMG export of Bangladesh continued to dominate the market
around the globe which has caught the attention of many international experts and
other stakeholders of the RMG market. Since the recession has reduced the income
growth as well as consumption expenditure of the people the demand for expensive
items has been replaced by the low cost products. Bangladesh specializes in the
production of low cost RMG items because of its absolute advantage in producing
RMG items with the lowest labor cost in the world. That is why, the dominance of
Bangladeshi RMG export increased substantially to our most lucrative destinations
namely the U.S and EU market while most of the other leading competing countries
staggered to be in race with us.