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Market Failure of Textile Industry

In: Business and Management

Submitted By muyid
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Market Failure
It occurs when the forces of market fails to allocate resources efficiently. Some causes of market failure include imperfect competition, external costs, etc. Our focus will be on external cost and how Bangladesh’s textile industry has contributed to market failure.

Overview of Bangladesh’s Textile Industry

Textile industry is the second largest industry in the world next to agriculture. Bangladesh has emerged, in just under a decade, as the twelfth largest textile manufacturing nation in the world. This industry has been one of the most success stories of Bangladesh over the last two decades. Textile industries are one of the largest and vital industrial sectors of Bangladesh with regard to earning foreign exchange and labor employment, providing 4.5 million jobs of which 80% are women and contributes 13% to GDP. A huge 78 percent of the country’s export earnings come from textiles and apparel, according to the latest figures available. Bangladesh exports its apparel products worth nearly $5 billion per year to the United States, European Union, Canada and other countries of the world. It is the sixth largest apparel supplier to the United States and EU countries.
Combined, the textile and apparel sectors consist of 3,600 firms. There is a concentration of manufacturing activity in and around the capital city of Dhaka and a growing garment manufacturing presence in the country’s export processing zones.

Environmental hazard arising from textile industry

The textile industry, being the second largest industry in the world is also considered as the most ecologically harmful industry. It has been condemned as being one of the world’s worst offenders in terms of pollution. As important as the textile industry is for Bangladesh there’s a hidden cost. This industry involves processing or converting raw material into finished cloth materials…...

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