Although Bangladesh's RMG sector has achieved its present prominent position after many decades, there is still much to be unsure of. Throughout the sector's gradual advancement there have been two main contributors -- the owners, or entrepreneurs, and the workers, especially women workers. Others may have a different opinion, but it is clear that these two parties are surely the major contributors to the industry.

Like in other countries, the government should always be a catalyst. But I feel, as a person involved in this sector, that the government of Bangladesh does not make much of a contribution. On the other hand, due to employment generation and foreign exchange earnings, the government comes across as the main beneficiary, whether the RMG sector makes any profit or not.

You may not agree with me, but let me give you an example to support my view: as you all know, the Ministry of Foreign Affairs has set up an export target for each embassy, where they publish whether or not one has achieved the target. But what have they done to achieve the target? The answer is nothing. Targets were achieved when factory owners took the orders and shipped the targeted amount. But did any of the embassy officials do anything? Once again, the answer is no. Here, one can see that it is clearly all in the effort of the owners and workers.

Since the beginning, buyers have been placing their orders in Bangladesh primarily because of the price. From our point of view we are only concerned about the FOB price, but for the buyer it is the landed price of the garment, which includes -- FOB price, freight charges, duty and tax, clearing and brokerage, and transportation. Out of all these concerns, two main concerns are FOB price and duty and tax. As a manufacturing country we are only responsible for the FOB price and this FOB price consists of material cost and cost of making, known as the CM.

In most cases, factories do not have any control over the materials, as the buyer or buyer's representatives decide for how much and from where to buy materials. On the other hand, the factories bear the expenses such as salary and wages, rent and electricity, clearing and forwarding charges, banking expenses, and transportations. It is only after covering all these expenses that the owner can get any profit.

Let us concentrate on the FOB price. Please note that there are only a very few internationally recognised countries that can provide proper materials. All of the competing countries can buy from these specific countries at a similar price, but due to freight charges, prices vary slightly. Besides, we have to pay a little bit more to cover their cost of funds. Thus, the main factor -- the cost of making -- remains as a variable.

Now, if we go deeper into the issue, the major portion of the CM is the salary and wages, but more specifically, the wages are the main factor which determine the CM of a garment factory. But there are other factors which vary from factory-to-factory, and buyer-to-buyer, depending on the quantity, quality requirement, delivery time, buyers' reputation, factory's goodwill, and so on. In Bangladesh, we can offer better CM as we have cheap labour, which covers the major portion of the CM.

The CM factor is the main determinant for which buyers place orders to Bangladesh rather than other countries such as China, India, Pakistan, Turkey, and North American countries. If you go back in history you will find that buyers have been changing their sourcing countries due to labour costs.

Before the Second World War, or immediately after, it was Britain, US, and the European countries that used to produce ready-made garments. Afterwards, it was South Korea, Taiwan, and the North American countries. Malaysia, Indonesia, and Thailand were soon to join, followed by China, Pakistan, India, and Bangladesh. These buyers are like birds migrating from country to country and from region to region.

Even now Bangladesh receives orders, as labour costs are still cheaper in Bangladesh compared to that of our competitors. Unfortunately, other than this factor, we don't have any other advantage that can help to persuade more buyers to place their orders in Bangladesh. Besides, issues such as port problems, and political instability are also factors that make Bangladesh less attractive to buyers. The moment the buyers find that Bangladesh's labour costs are no longer cheap, they will fly away.

Now, it is our responsibility to stay competitive. Problems concerning the RMG sector need to be removed or else we will lose our buyers. These concerns are -- banking expenses, clearing and forwarding charges, lengthy time consumption in port and customs, expenses against services, and transportation expenses.

Recently, a riot broke out in this sector, and now, the CM rates will increase for various reasons such as increment of wages, new requirements to look after workers' grievances, increased number of security personnel, and increase in insurance premium. Ultimately when things will cross the optimum level, we will start to lose our customers to other countries and regions.

Very soon we will see that the situation will get worse, unless the owners, workers, BGMEA/BKMEA and government immediately take care of these issues. In the recently held round table discussions concerning the unrest in the RMG sector, it has been decided that there will be an increase of salaries, and more facilities will be provided for the workers. The workers will also be given the right to form trade unions. But I am not sure whether or not they have ever checked how feasible things are in this county where trade unions never result in anything good, but rather in destruction.

M Zahedul Anwar is CEO, Mark International, a textile-buying agent.