Bangladesh is a developing nation. It is a country with few large and some moderate size industries of different kinds. Among these, the industry that has been making stringent contribution to develop the country and its economy is none other than the Ready-made Garment (RMG) industry which is now the single biggest export earner for Bangladesh. The sector contributes significantly to the GDP. Bangladesh RMG Industry has played important role by creating employment opportunities for the poor mainly women from low income families and uneducated people who were previously engaged with the traditional agriculture sector. So my target audiences are policy makers, government agencies, and donor agencies of this RMG sector.

1. Submission Date: 10-December-2015
The Role of Private Finance for Development
in Ready-made Garment (RMG) Sector
of Bangladesh
MOOC : Finance for Development (Fin4Dev),
World Bank Group
Final Project: Digital Artifact

2. Lessons Learnt
• Massive opportunity for developing countries to access
more resources by improving Tax-GDP ratio for
development finance.
• Billions to trillions concept from domestic resource
mobilization
• Official Development Assistance (ODA) can be used as a
means of mitigating risk in certain environments.
• Sustainable Development Goals (SDGs): Goal 1, 3, 5, 8,
9, 12, and 15 will be fostered simultaneously by
industrial development.
• Sources of private sector finance

3. Summary and Target Audience
Bangladesh is a developing nation. It is a country with few
large and some moderate size industries of different
kinds. Among these, the industry that has been making
stringent contribution to develop the country and its
economy is none other than the Ready-made Garment
(RMG) industry which is now the single biggest export
earner for Bangladesh. The sector contributes significantly
to the GDP. Bangladesh RMG Industry has played
important role by creating employment opportunities for
the poor mainly women from low income families and
uneducated people who were previously engaged with
the traditional agriculture sector. So target audiences are
policy makers, government agencies, and donor agencies
related to this sector.

4. Role of Private Sector in Development
Growth engine of the economy
Advancing innovation
Revenue generation source for government
Creating wealth, income
Jobs creation
Mobilizing domestic resources
Contributing to poverty reduction
Women empowerment and reducing inequality etc.

5. Contribution of RMG Sector
 39.31% in the overall export of Bangladesh at last 10 Fiscal Year (FY 2005-
06 to FY 2014-15) where currently 81.71 percentage of national export (FY
2014-15)
 14.06% of Gross Domestic Product (GDP) (FY13-14)
 Provide 4.02 million direct jobs
 Structural adjustment policies of the factories according to the demand of
ILO*, ACCORD**, and ALLIANCE*** & Other related international bodies.
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Exports(FreeonBoardvalue)
ShareofRMG(%)
Fiscal Year (July-June)
Exports (from FY73-FY15) Scenario of Bangladesh Share of RMG (%) Exports (FOB)

6. Contribution of Development Partners
 International Finance Corporation (IFC) used a blended finance structure
to actually help & rebuild some of buildings of the garment industry in
Bangladesh
 United Nations Development Programme (UNDP)* enhanced cooperation
among the stakeholders in three major areas:
• Resilient business which includes disaster safe investments,
establishment, production and markets.
• Business Opportunities in disaster risk reduction (DRR) through
innovation.
• Enabling environment for business to adopt disaster safe approaches,
including incentives, private sector leadership in DRR and strong
partnership.
 United Nations Industrial Development Organization (UNIDO) is about to
complete Better Work in Textile and Garments (BWTG) which is Better
Quality Infrastructure (BQI) component of Better Work and Standards
Programme (BEST).

7. Financing Scenario in RMG Sector
Domestic Source : Private investment 95
percent.
International Source: 5 Percent investment
though Foreign Direct Investment (FDI)

8. Contribution into Sustainable Pillars
Social
• Employment generation.
• The urban garment industry has created more than one million formal
sector jobs for women, contributing to the high femal labour participation
about 80% in RMG sector in Bangladesh.
• Improving standard of living.
• Substantially decreasing social cost in terms of crime, violence, moral
decadents, wastage of potential labor force.
• In the corporate world in Bangladesh the social responsibilities are
not yet so widespread but companies are emphasizing on the social
responsibilities in the local market as well.
• Companies are realizing that social responsibilities are an investment, not
a cost, much like quality management.
• Business organizations are trying to have an inclusive financial,
commercial and social approach to minimize the risks linked to
uncertainty.
• Health Hazardous Chemical Usages To be continued

9. Contribution into Sustainable Pillars
Economy
• Moved from lower income to lower middle income country and expecting
to be a developed economy by 2041.
• Between 2007 and 2014, Bangladesh averaged a Real GDP growth rate of
6.05% and projected to be 6.7% in 2020 (World Economic Outlook 2015,
IMF).
• The economy is increasingly led by export-oriented industrialization. The
Bangladesh textile industry is the second-largest in the world behind
China.
• The inflation rate in Bangladesh was reported at 6.24 percent in
September of 2015.
• The economy has grown at the rate of 6-7% over the past few years.
• Total Export: 31.20 billion US dollar in FY 2014-15 (July-June).
• Total Import Payments : 40.45 billion US dollar in FY 2014-15 (July-June).
• Stable exchange rate against Taka/Dollar.
To be continued

10. Contribution into Sustainable Pillars
Environment
• Green financing by central Bank of Bangladesh (Bangladesh Bank).
• Effluent Treatment Plant (ETP) use to water sanitation
• Water Pollution
• In Bangladesh, the Companies are facing the challenges of adapting the
changing environment in the context of globalization particularly in the
export sector.

11. Development Investment Fields
 Public resources should be mobilized to finance large
infrastructure e.g. electric power, gas, ports, railways,
roads, and urban services.
 Set up ‘Industrial Park’.
 Increase the competition in ground handling of cargo.
 Strengthen the capacity of the airports and sea-ports.
 Adopt a coordinated strategy to improve performance of
Dhaka-Chittagong corridor.
 Establish a number of institutions which will produce skilled
manpower.
 Develop technology to mitigate environment pollution by
eco-friendly technology used such as ETP, high technology
with least energy consumption, economizer etc.

12. Financial Assistance Solution
• Specialized bank for RMG sector
• Foreign Direct Investment (FDA)
• Projects finance
• Remittance
• Pension funds
• Capital market
• Insurance communities
• Civil society organizations
• Foundations and non-governmental organizations
• Incentives (cash, policy, duty-drawback etc.) by government
• Grants or Concessional loans
• Commercial bank by prioritizing, etc.

13. Recommendations
• Initiate necessary programme for Branding
• Development of research, design and fashion for
manufacturing high value added products
• Investment for Energy sustainability
• FDI and protect illicit money flows
• Green industrialization
• Resilient business which includes disaster safe
investments
• Establish institution for Fashion & Textile and
testing lab facilities

14. Reference
• MOOC, Fin4Dev, World Bank Group, Week 3 Video Talks :The Role of Private Finance in
Financing for Development.
• Central Intelligence Agency (CIF), Factbook, GDP (official exchange rate) 2014 est:
https://www.cia.gov/library/publications/the-world-factbook/rankorder/2001rank.html
• Bangladesh Bureau of Statistics (BBS), 2014:
http://203.112.218.66/WebTestApplication/userfiles/Image/SY2010/Chapter-05.pdf
• Apparel Export Statistics of Bangladesh FY 2014-15, annual publication of Bangladesh
Knitwear Manufacturers & Exporters Association (BKMEA):
http://www.bkmea.com/iART_Market_Brief.html (accessed: 09-December-2015)
• World Economic Outlook 2015, International Monetary Fund (IMF):
http://www.imf.org/external/pubs/ft/weo/2015/01/
• Bangladesh Bank: https://www.bb.org.bd/
• Export Promotion Bureau: http://www.epb.gov.bd/index.php/home/exportdata
• World Bank: http://data.worldbank.org/country/bangladesh
• United Nations Development Programme (UNDP):
http://www.bd.undp.org/content/bangladesh/en/home.html
• United nations Industrial Development Organization (UNIDO):
http://www.unido.org/factsheets.html

15. Thank You Very Much