In Viet Nam, an improved basic infrastructure around Ho Chi Minh City and Danang generated a high impact on the competitiveness of the local garment companies. Cambodia and Laos have still a long way to go before they constitute a significant share in terms of sustainable garment supply. Bangladesh and Sri Lanka face severe security and customs coordination problems. Since 2004, garment exports in Mongolia and Nepal show dramatic decline. An improved logistics infrastructure will have high impact on the success of garment exports as most products are exported overseas.
Policy implications for sustainable garment exports in LDCs:
Economic security and stability, customs coordination, transport and telecommunication facilities are of vital importance for sustainable development. Although, the basic infrastructure in export-processing zones, areas where tariffs and quotas are eliminated and bureaucratic requirements are lowered, is adequate, special emphasis should be laid on upgrading infrastructure resources and lead time reduction. Garment manufacturing and foreign direct investment (FDI) has to become an integral part of LDC industrialization policy within a systemic framework.
High industrial labour force in Myanmar, Bangladesh and Cambodia could attract FDI and boost the local garment manufacturing sector. In contrast, Laos is short in labour force, and thus unlikely to attract large foreign garment companies. Given the nature of competition in the garment manufacturing industry and the unpredictability of preferential agreements, LDCs, especially those with low labour force, should focus on a second industrial foothold. As shipment is crucial for a successful garment industry, landlocked countries, like Bhutan, Mongolia and Nepal sould also simply use garment manufacturing as a complementary industry to generate jobs and to attract foreign investment.
Local Governments have to develop an effective industrial monitoring evaluation mechanism in order to control general conduct of business, management and audit systems. Further, local Governments have to establish stakeholder coordination councils. Stakeholder coordination councils will be in charge of connecting and coordinating all economic agents relevant to upgrade the garment manufacturing industry.
Training levies are successfully used in Singapore, Malaysia and Viet Nam. Bangladesh, Cambodia, Laos and Myanmar could also benefit from such an instrument.