What the papers say

Industrial Potential

A weekly round up of articles about employment, the labour market, skills training and workforce development. This week’s round up is drawn from The Financial Express. Here is the news for the week ending 10th March 2015.

This week in the Bangladesh English Press…

…Garment industry and other enterprises show good progress in profits and worker livelihood. Deals with Malaysia over foreign workers still at an impasse, even as reports praise their potential. Imports could raise costs for textile industry, under questionable circumstances. Cost of produce up this week as hopes of bumper mango season distracts.

Industries Show Good Progress

Small and Medium Enterprises (SMEs) have made large strides recently in turnover rates, job creation, and profits due to foreign loans from the Japan International Cooperation Agency.  The JPY 5.0 Billion (TK 3.4 Billion)  fund mostly helped  SMEs in the manufacturing sector, seeing  increases in turnover by 49.35 percent, profits by 16.3 percent, and employment by 15.7 percent across 513 enterprises.

New census reveals that Women make up 65 percent of the ready made garment (RMG) industry, contrary to beliefs that it could be as high as 80 percent.

This follows a vision of the Bangladeshi Government to create “job-rich growth” over the last five to six years, leading to an increased number of disbursements and credits to the manufacturing and service sectors.

New census reveals that Women make up 65 percent of the ready made garment (RMG) industry, contrary to beliefs that it could be as high as 80 percent. The study also tried to identify the social and economic impacts of the RMG industry, on factors such as poverty reduction, standards of living, health, and education. It found that RMG workers had an above average literacy rate (83 compared to 58 percent), and that the average family income of a worker in the RMG industry is nearly double the national average (TK 15,720 compared to TK 8,900).

Foreign Workers in Malaysia

The Malaysian Government and KL Administration was urged by entrepreneurs to lift its suspended intake of foreign workers and freeze on permit renewal as manpower shortage threatens to slow production and construction across country.

World Bank reports that Bangladeshi immigrant workers are helping to expand employment opportunities for Malaysians

Bangladeshis make up a large portion of the foreign work force and could face deportation if their work permits are not renewed before they expire soon. Many companies and projects are urging the government to reconsider or suffer the resultant economic consequences.

The World Bank (WB) reports that increased numbers of immigrant workers, many of whom are from Bangladesh, are helping to expand employment opportunities for Malaysians, not hurting them. A WB study reveals that increased immigration depresses the wages of foreign workers, reducing the costs of production and increasing opportunities for expansion, thereby increasing the wages and opportunities for highly skilled and educated Malaysians.

Import Concerns

Industry leaders showed concerns over a growing trade imbalance as Imports for local textile and RMG industries grew faster than the growth in exports from those sectors. The growth rate of imported raw materials for the textile industry was up 5-10 percent over last year, as export growth from the sector stagnating at 4.08 percent. For example, 95 percent of required cotton comes from imports as the country’s cotton industry can only satisfy 3-5 percent of the demand. Similarly, demand for synthetic fibres has also increased dramatically in recent years, as a result of the increased number of mills switching to synthetic materials. Allegations were made that factories were selling imported raw materials in local markets, causing leakages and possibly leading to this imbalance.

Buying produce this week? Maybe wait…

The prices of onion, garlic, and some other vegetables continue to increase as the harvest period comes to an end. Grocers have reported that the wholesale price of these vegetables has been increasing by TK 0.5 to TK 1.0 per kg every day for the past week. This comes as import prices have dramatically increased. The import cost of garlic rose from USD $1,000-1,050 per tonne to $1,800-$1,850 this past January. Prices for garlic increased on average by Tk 10-20 in local markets this past week.

Lentil prices unexpectedly rose during the height of the harvest as poor weather conditions lead to low production. Similarly, potato farmers face challenges as prices drop due to inadequate storage facilities and heavy hailstorms. More optimistically, farmers expect record mango production this season as climate conditions will remain suitable for flowering and budding later this season.

And that’s the news from The Financial Express for this week.

2 replies on “Industrial Potential”

A couple of interesting insights in this post: First that migrant labour is not necessarily bad for domestic wages and can benefit the host country’s economy.

And second that the literacy rate of garments workers is significantly higher than average rates. Does this mean that literacy is effectively a determining factor in getting a job. Or that employers are providing training that facilitates literacy once in a job. Or even that employment incentivises workers to take classes outside to improve their literacy – to get a promotion, say?

Interesting post. Thanks, Aidan.

Thanks for your comment Phillip.

The discussion in Malaysia reminds me of an ongoing debate in the United States surrounding documented and undocumented workers. Recent research has shown that undocumented workers not only compliment the productivity and wages of skilled workers, but also benefit the economy in meaningful ways, such as contributing USD $300 billion a year to social security.

On your second point, it is hard to say whether literacy begets employment or whether employers provide opportunities for workers to become literate. I would be interested to learn more about the corporate culture and conventions found in the garment industry.

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