LDC Transition: Japan offers a new growth opportunity to Bangladesh RMG sector

September 8, 2018

Bangladesh is on fast-track to becoming a developing nation by 2021. Having made significant progress on the key parameters of transition – Economic Vulnerability Index (EVI), Human Assets Index (HAI) and Gross National Income Per Capita (GNI) – it’s just a matter of time before the country sheds its LDC tag to join the big league of developing nations.

A significant achievement to say the least, graduating to a developing nation comes with its own share of limitations, the biggest of which is perhaps losing the international support measures (ISMs), provided by the global community. A beneficiary of trade privileges offered by various nations, Bangladesh readymade garment sector runs risk of facing business constraints following a successful transition. Key to the country’s economy, Bangladesh Government has already initiated moves to ensure that the apparel sector is not hamstrung in such a scenario, keeping with which it is reportedly pushing for FTAs and continuance of duty-free market access from existing and new export destinations. And a big name from Bangladesh’s perspective to assure the former duty-free access is Japan.

World’s third largest economy with a population of 127.1 million and GDP per capita (PPS) of US $ 36,194, Japan is emerging as a very promising market for Bangladesh. As per data from the Export Promotion Bureau (EPB), in the fiscal year 2017-18, Bangladesh earned US $ 1.13 billion from exports to Japan, which is 11.73 per cent higher compared to earnings of US $ 1.01 billion in FY17.

Source: Apparel Resources