Cassandras are already pointing fingers at the steady decline of exports to the USA, our second most important destination after the EU, and predicting a massive downslide. They are predicating their observations on the basis that the US market will be more competitive not only because of the effects of NAFTA and the USTDA 2000, but also because of the proximity factor of Mexico and the Caribbean countries. They are also stressing that in addition to the growing influx of China, India and Pakistan, these Caribbean islands will enjoy price advantages because of their duty free status and shortage of lead time.

Yes, there will be problems, but this industry will survive given our resilience. We will have stormy weather, particularly because of competition in quota free markets, but then measures can be taken to expand our presence in non-quota items. We have to evolve and implement strategies that will not only reduce the impact but will also take us forward. This has to be done in a bi-partisan spirit, not only between different political parties but also between those in the textile, RMG and knitwear industries. In this fight for survival, there also has to be cooperation between the employers and those employed.

I believe that our RMG industry can stay afloat if we take the following proactive measurers aimed at not only making our products more price competitive but also improving our forward linkages. We will also have to go beyond our current production orientation of just CMT. Such a strategy will involve the following:

Both in the USA as well as in the EU, the price factor will determine our presence. We have to trim our low prices even further. This can be achieved partially by reducing costs, not only in the marginal area of CMT operations but also in overhead components like expenditure on administration, transportation, port management and reduction of lead time.

A key element will be labour productivity. Over the years Bangladeshi RMG workers have enhanced their skills, but their productivity is still way behind their colleagues in Malaysia, Hong Kong and according to some experts even Mexico. Bangladeshi workers, according to a report published recently, 'take longer time to complete stitching a basic shirt.' The suitable remedial measure might be to give appropriate training to the floor workers and their supervisors. We already employ a large number of expatriates in the middle management categories. However, the training that is being provided through supervision and counselling is mostly informal and not institutional in character. The government or even the private sector needs to formalise this through the establishment of training institutes where the latest principles of CMT operations and craftsmanship can be demonstrated.

The aspect of labour productivity should also include further training of workers involved in the backward linkage mechanism of the industry. I am referring here to those associated in the spinning and weaving mills and in the dyeing and processing units at the time of manufacturing fabric. In this regard, it would be useful to take hints from China and Thailand. This improvement of labour productivity will also have to focus on better training and efficiency for the management staff. Having the right kind of helmsmen will allow the boat to cross the turbulent sea ahead.

Similarly, the cost reduction effort will have to move faster on the issue of infrastructures. We have been talking about it a lot. However, there still remains substantive areas which need focussed improvement, particularly after the recent disastrous floods. Road, river and air transportations, residual development of the Chittagong Port, power supply matrix and information and communication technologies are still far from satisfactory. The inefficient use of container transportation by railway is adding cost on to products because of the associated long queues. This management of carrying capacity has to be improved drastically given the anticipated rise in potential volume.

Criticism also holds true with regard to poor turn-arounds in cargo clearance at Chittagong Port arising out of congestion, poor administrative and customs management. Unfortunately, these factors have consequential effect on FOB prices. It is vital that automation and use of computer management is expanded to improve efficiency. We must take lessons from Singapore and Hong Kong.

A mechanism also needs to be found with regard to increased cost resulting out of avoidable interest charges, bank commissions and fees paid to middlemen. Some consultants have also pointed out that cost could also be reduced through maintenance of smaller inventories.

In this context, it would be worthwhile to note that although some effort has been undertaken to gain control of the marketing mechanism, yet a lot of profit is lost by the industry due to intermediary intervention. We need to overcome this by building up our own marketing capabilities.

The onus for this largely rests with the private sector. The government can also be a facilitator Bangladeshi entrepreneurs, like their counterparts in South Korea, India and Malaysia, should try through their respective commodity associations, to open up display centres of their products all over the USA, the expanded EU, in the Far East and South East Asia, Japan, the second largest economy, needs to be focussed upon particularly. Consumers must know that we produce.

I know that most of our Diplomatic Missions are supposed to have display centres of our exportable products. However, the quality and range of products displayed there are far from satisfactory. This is partially because of space constraint within the mission and also because of resource constraint. Separate establishments, with their own personnel (including interpreters) and necessary communication facilities, need to be set up urgently by the different associations to deal with this question more professionally.

This initiative will ensure 'extension' of market diversification. However, at the same time, on the second track, there will also have to be coordinated and serious efforts geared towards product diversification strategy. We have to try to move from just basic shirts to higher end items like jackets, suits and ladies top coats. This will not be an easy task as it will involve keeping up with latest trends in fashion design. Nevertheless, if India, Indonesia and Turkey can slowly graduate into higher categories, so can we. It will mean having more fashion institutes and consultants. I am sure that the EU will be more than happy to assist in this regard. It will involve market research design development and keeping up with the latest regulations, but that is exactly what the association display centres can do.

One cannot however conclude without referring also to the significant factor of good governance, without which all efforts are bound to suffer. This not only means reducing the cost of doing business but also more efficient and speedy implementation of decision-making through e-governance.

We must not forget that the RMG industry has sustained itself largely through the initiative of the private sector. The government needs to understand that this industry is changing the lives of millions of families. It will consequently not be enough for the administration to just sit back and advise. They have to be partners in all senses of the term.

Muhammad Zamir is a former Secretary and Ambassador.