Suspension of GSP: Image Crisis for Bangladesh

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The most troubled sector of recent times is Readymade Garments (RMG) sector of Bangladesh which is the backbone of our economy. This labor intensive industry has accommodated 4.5 million workers 80% of whom are women in the last fiscal year1. So there are about 5,000 garments factories scattered across the country. 78% of our foreign earnings come from this sector2. This sector keeps our economy moving but the industry has been facing numerous problems. Poor working conditions, bad industrial relations, low wage, arrogant and ruthless attitude of owners or management and lack of solid and positive initiative on behalf of successive governments has made this sector questionable to world market. It has lost GSP (Generalized System of Preference) advantage in the U.S market which has created image crisis for the industry. This is fear of loosing GSP advantage in the EU market as well. To save the employment generation and one of the largest foreign currency earning sectors, BGMEA, BKMEA and Government should adopt an integrated approach on the one hand and boost up image of this industry on the other. Key words: Bangladesh Readymade Garment Sector, Suspension of GSP in the US market, Image crisis, Fear of Suspension of GSP in the EU market. Statement of the Problem: Now the most pertinent question in the economic arena is suspension of GSP programme. Why did the USA suspend GSP programme from June 27, 2013? Bangladesh had been enjoying GSP in the US market excluding readymade garments. She has to face an export fall of about $40 million in the US market. However, direct impact would not be much less than 1% of Bangladesh’s $5 billion of annual export (mostly RMG products) to the US which falls under Washington’s GSP programm... ... middle of paper ... ...pment Research Working Paper Series, May 17, 2013. 12. Ibid. 13. Hossain Md. Forhad, Bangladesh in GSP Review, http://topnewswiki.blogspot.com, Accessed on February 28, 1014. 14. The Independent, July 12, 2013 15. Tasin, Faria GSP cut and its fallout, The Daily Star, July 04, 2013. 16. Dunn J. D. and M. Rachel Faruk, Wage and Salary Administration: Total Compensation System, McGrow Hill Book Company, 1971, U.S.A., pp.18. 17. Shahriar Asif, http://news.prio.com, Accessed on February 18, 2014. 18. Hasim Bin Mustofa, Bangladesh to get back GSP if there is no politics, http://news.prio.com, Accessed on February 13, 2014. 19. Faruk Omar, GSP Cancellation to destroy the Economy of Bangladesh, London based weekly Eurobangla, July 13, 2013. 20. Statistical Year Book of Bangladesh, 2012, Government of Bangladesh, P.266. 21. Tasin, Faria GSP cut and its fallout, Ibid.

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