Abstract
Only a very small number of industries have achieved successful development in developing countries other than several East Asian countries. Exceptionally, the garment industry and the pharmaceutical industry in Bangladesh have grown from scratch into major producers in the respective world markets within a few decades after the early 1980s. They have enormously contributed to the economic development and the advancement of welfare of the Bangladeshi society. While the garment industry has created a huge number of jobs, especially for females, the pharmaceutical industry has drastically improved the access of ordinary people to essential drugs. This chapter attempts to learn from these examples about what the key to industrial development is.
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Notes
- 1.
Essential medicines are defined as the medicines that “satisfy the priority health care needs of the population” according to the World Health Organization (2004). The WHO model list of essential medicines has been updated every two years since 1977.
- 2.
In addition, the international community decided in 1994 to abolish the MFA gradually by 2005. This phased abolition is said to have strengthened the position of global buyers vis-a-vis local suppliers (Mlachila and Yang 2004; Saxena and Wiebe 2005). Bangladesh had been brought under the quota system in 1984.
- 3.
- 4.
This medicine was introduced to the market between 1981 and 2001.
- 5.
See Lall and Bibile (1978) for the experience of Sri Lanka.
- 6.
This estimate was given by Dr. Zafrullah Chowdhury, one of the expert committee members who drafted the NDP. We held a personal interview with him on January 15, 2011.
- 7.
Moreover, the ambassadors from the USA, UK, and West Germany threatened to stop the provision of all aid to Bangladesh.
- 8.
The turnover data were taken from DGDA and IMS Health, Bangladesh.
- 9.
The GDP growth rate of the country was about 5% from the mid-1990s to the mid-2000s, and about 6% from the mid-2000s to the present.
- 10.
We selected the sample knitwear firms randomly from the members of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), and the sample buying houses randomly from the member traders of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA). The results of the data analysis have been previously reported by Mottaleb and Sonobe (2011). All the sample buying houses had dealt with both knitwear and woven garment firms.
- 11.
While 250 firms (262 plants) were registered with the DGDA in 2011 according to its web page, http://www.dgda.gov.bd/index.php?menuName=Allopathic&mmn=Manufacturers, on March 15, 2011, 71 were not in operation or being suspended at this time, 25 produced other major products than medicines, two had only been established in 2011, and four were multinational firms.
- 12.
The sweater-producing variable is a dummy variable indicating whether the factory is a producer of sweaters and other products produced by using flat knitting machines, or of T-shirts, polo shirts, and other products produced by using circular knitting machines. The positive and significant coefficients on the year dummies indicate that the level of international accreditation has been increasing in more recent years.
- 13.
This variable cannot take a value greater than 1 or smaller than 0. Only 144 observations out of the total of 341 observations took values between 0 and 1, and the rest were either left- or right-censored. Thus, we employed the two-limit Tobit model.
- 14.
Since this dependent variable is censored, we used the two-limit Tobit model.
- 15.
Since the number of new products is zero or one for many years for many firms, the table shows the results of the Poisson model estimation, but the qualitative results are mostly the same if the ordinary least square method is used.
- 16.
We do not have a convincing explanation for the negative and significant coefficient relating to the years of prior experience in pharmaceutical production, or for the positive and significant coefficient relating to prior experience in government service.
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Sonobe, T., Mottaleb, K.A., Amin, M.N. (2018). The Miraculous Development of the Garment and Pharmaceutical Industries in Bangladesh. In: Sawada, Y., Mahmud, M., Kitano, N. (eds) Economic and Social Development of Bangladesh. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-63838-6_2
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