A BIDS study published in 2017 found that Bangladesh’s ready-made garments (RMG) sector experienced the highest annual job growth, 29.07% each year, from 1990 to 1995.

The BIDS study, Labour Market and Skill Gap in Bangladesh claimed that the RMG sector’s spectacular growth started at the beginning of the 1990s. In 1990, its rank in terms of value addition of manufacturing subsectors was third. In 2002, the rank rose to first; since then, it has been at the top.

RMG’s contribution to the country’s export earnings increased from 3.89 per cent in 1984 to 32.45 per cent in 1990, 75.61 per cent in 2010, and 82.05 per cent in 2016. Thus, the country overwhelmingly depends on this sector for its export earnings.

The sector’s growth vis-á-vis other manufacturing subsectors shows that its index is not only the highest but also rising and has been at the top during the 2010-14 period.

Data show that total employment in the industry expanded from less than half a million to about 4.0 million from 1990 to 2015. The rate of employment growth was not uniform throughout the period. Growth was sharp during the first half of the 1990s and slowed down during 1995 to 2005.

However, the employment growth rate rose again during 2005-2010, more than double that of the previous ten years. Since 2010, employment in the sector has stagnated. The decline in job growth after the initial period of high growth was because the industry was going through a period of stabilisation and consolidation.

The growth acceleration from 2005 to 2010 is quite remarkable. This is particularly notable because there was a general apprehension about the adverse effect of the withdrawal of the quota system in the post-MFA regime.

The RMG sector in Bangladesh has not only survived the withdrawal of MFA but has also been showing stable growth. However, the stagnation of employment in recent years (2013-2015) is in stark contrast to the earlier periods. This lowdown of employment generation will disappoint policymakers who wish to depend on RMG for significant employment growth.