206 Part 3 The Rise of Bangladesh's Textile Trade Bangladesh, one of the world's poorest countries, has long depended heavily upon exports of textile products to generate income, employment, and...

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The Rise of Bangladesh's Textile Trade Bangladesh, one of the world's poorest countries, has long depended heavily upon exports of textile products to generate income, employment, and economic growth. Most of these exports are low-cost finished garments sold to mass-market retailers in the West, such as Walmart. For decades, Bangladesh was able to take ad-vantage of a quota system for textile exports that gave it, and other poor countries, preferential access to rich markets such as the United States and the European Union. On January 1, 2005, however, that system was scrapped in favor of one that was based on free trade principles. From then on, exporters in Bangladesh would have to compete for business against producers from other nations such as China and Indonesia. Many ana-lysts predicted the quick collapse of Bangladesh's textile industry. They predicted a sharp jump in unemploy-ment, a decline in the country's balance of payments ac-counts, and a negative impact on economic growth. The collapse didn't happen. Bangladesh's exports of textiles continued to grow, even as the rest of the world plunged into an economic crisis in 2008. Bangladesh's exports of garments rose to $10.7 billion in 2008, up from $9.3 billion in 2007 and $8.9 billion in 2006. Ap-parently, Bangladesh has an advantage in the produc-tion of textiles—it is one of the world's low-cost producers—and this is allowing the country to grow its share of world markets. As a deep economic recession took hold in developed nations during 2008-09, big im-porters such as Walmart increased their purchases of low-cost garments from Bangladesh to better serve their customers, who were looking for low prices. Li & Fung, a Hong Kong company that handles sourcing and apparel manufacturing, stated its production in Bangladesh jumped percent in 2009, while production in China, its biggest supplier, slid 5 percent. Bangladesh's advantage is based on a number of fac-tors. First, labor costs are low, in part due to low hourly wage rates and in part due to investments by textile manufacturers in productivity-boosting technology dur-ing the past decade. Today, wage rates in the textile in-dustry in Bangladesh are about $50 to $60 a month, less than half the minimum wage in China. While this pay rate seems dismally low by Western standards, in a coun-try where the gross national income per capita is only $470 a year, it is a living wage and a source of employment for some 3 million people, 85 percent of
whom are women with few alternative employment opportunities. Another source of advantage for Bangladesh is that it has a vibrant network of supporting industries that sup-ply inputs to its garment manufacturers. Some three-quarters of all inputs are made locally. This saves garment manufacturers transport and storage costs, im-port duties, and the long lead times that come with the imported woven fabrics used to make shirts and trousers. In other words, the local supporting industries help to boost the productivity of Bangladesh's garment manu-facturers, giving them a cost advantage that goes beyond low wage rates. Bangladesh also has the advantage of not being, China! Many importers in the West have grown cau-tious about becoming too dependent upon China for imports of specific goods for fear that if there was disrup-tion, economic or other, their supply chains would be decimated unless they had an alternative source of sup-ply. Thus, Bangladesh has benefited from the trend by Western importers to diversify their supply sources. Al-though China remains the world's largest exporter of garments, with exports of $120 billion in 2008, wage rates are rising quite fast, suggesting the trend to shift textile production away from China may continue. Bangladesh, however, does have some negatives; most notable are the constant disruptions in electricity because the government has underinvested in power generation and distribution infrastructure. Roads and ports are also inferior to those found in China.4'
Case Discussion Questions 1. Why was the shift to a free trade regime in the textile industry good for Bangladesh? 2. Who benefits when retailers in the United States source textiles from low-wage countries such as Bangladesh? Who might lose? Do the gains out-weigh the losses? 3. What international trade theory, or theories, best explain the rise of Bangladesh as a textile export-ing powerhouse? 4. How secure is Bangladesh's textile industry from foreign competition? What factors could ulti-mately lead to a decline?
Answered Same DayDec 23, 2021

Answer To: 206 Part 3 The Rise of Bangladesh's Textile Trade Bangladesh, one of the world's poorest countries,...

Robert answered on Dec 23 2021
105 Votes
The Ecuadorean rose Industry
Question 1
Ecuadorean rose Industry, one of the world’s largest producer of high quality roses,
exports their products to all parts of the world. Most of their roses
are sold at finest prices in
many states in United States like New York, and also in European countries like England, etc.
Due to its bigger size and color choice availability, it attracts the customers to a greater extent
than other variety of roses. Many European countries and United States are benefitted by
importing quality of roses and based on its quality deliverable, the Ecuadorean roses are to be
called as Rolls-Royce of roses. Due to its business growth, the population in Cayambe where
Ecuadorean rose industry was built has been increased. Ten years back, the population in
Cayambe was only 10,000 people, but it was seven times bigger than their 10 years population
strength. The process of rose growth is a bit complicated process. The rose bushes are planted
very close to the volcanic areas and they are protected by 20 feet high of canopies of plastic
sheet. Having intense sunlight, productive soil background and farming the bushes at high
altitude, the conditions suite these roses an ideal place to grow and it takes almost a year for
them for complete maturation. The income generated by this rose industry has increased to $ 240
million and it also increased their employee size to almost ten thousand. Based on the revenue
and tax generated from rose industry, the government has provided additional benefits to the
town in Cayambe by paving roads, building schools and constructing sophisticated irrigation
systems. The rose industry has also taken necessary steps for the welfare of their employees by
providing health care and pension
Question 2:
Ecuadorean roses, the world’s leading rose producers has clients all over the world. But,
major of their rose business was in United States and European Nations. Quality is the trademark
for the rose...
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