How roughly 130 trainees started Bangladesh's garment industry

Bangladesh’s garment industry did not begin with a big foreign investment. It began with a training trip. The main record is a 1990 World Bank paper by Rhee and Belot, built on data from the two companies involved. A later study by Mostafa and Klepper, published in Management Science in 2018, interviewed 88 of the original trainees. The sources differ on some numbers, so we round where they disagree.

Why did a Korean company train its future competitors?

From 1974, the Multi-Fibre Arrangement (MFA) let rich countries set quotas: limits on how much clothing each exporting country could sell them. South Korea later hit its US and European limits. Bangladesh was not under quota yet (World Bank; NPR). Garments were still tiny in its exports: even in 1980/81 they earned just $3.9 million, or 0.5%.

On 4 July 1978, Noorul Quader of Desh Garments signed a five-year agreement with Daewoo. The terms were unusual:

• Daewoo put in no money: no shares and no loan. The partners chose not to form a joint venture, and Quader was the sole investor.
• Daewoo trained the workers, helped set up the factory and handled marketing.
• In return it took a 3% royalty (a fee for training and supervision) plus a 5% commission on sales: 8% in total.

What happened in Busan in 1979?

The deal was signed in 1978, but the training happened in 1979. From 1 April to 30 November 1979, about 130 Bangladeshis worked on Daewoo’s production lines in Busan. Sources give between 126 and 136: the World Bank paper says 130, and Mostafa and Klepper say 126. More than a dozen were women. None had made garments before. The agreement allowed six months of training; Daewoo’s course ran about eight.

How did one factory become more than 700?

Desh began full production in Chittagong in April 1980, with 450 machines and 500 workers. Its first exports, in the 1979/80 financial year, were 43,200 shirts worth about $55,500. Bangladesh’s financial year runs July to June. Desh ended the Daewoo agreement early, on 30 June 1981, after about 18 months of production. It could run on its own.

Then the know-how walked out of the door. The World Bank paper says 115 trainees left Desh. By 1984 about 75% had gone, and the industry had 294 firms. Most leavers were not founders. Mostafa and Klepper found that most were hired to set up and run other people’s factories. By 1988, 59 new firms had hired Desh workers to do this.

By 1985 Bangladesh had more than 700 garment factories. Desh and Daewoo’s know-how also helped introduce two tools in the early 1980s. A letter of credit is a bank’s promise to pay once the goods ship. With a back-to-back letter of credit, a factory uses the buyer’s letter of credit as security to open a second one that pays for its fabric. A bonded warehouse lets a factory import fabric without paying duty, as long as it is exported again as clothing.

Desh was not the first exporter, though. Reaz Garments shipped 10,000 shirts to France on 28 July 1978. Desh was the first modern factory built entirely for export.

The boom had a cost. In 1985 the US put quotas on Bangladeshi clothing, and about 500 factories closed; about 300 later reopened. Even so, by 1986/87 garment exports reached about $300 million, 28% of exports.

How big is the industry now?

• Ready-made garments (RMG) earned $39.34 billion in FY2024-25, 81.49% of all exports.
• In FY2025-26 they earned $38.70 billion, down 1.64%, about 80% of exports.
• Among single countries, only China exports more clothing. Bangladesh was second in 2024 with a 6.9% share, and still second in 2025, with Vietnam about $1.31 billion behind.
• Women held about 80–90% of garment jobs in the 1980s (World Bank). Today’s estimates are about 54–58%.
• Bangladesh has 291 LEED-certified garment factories, more than any other country (BGMEA, October 2026). LEED is a US green-building rating. It scores the building, not wages or workers’ rights.

The trade-off is concentration. One industry earns about four in every five export dollars, so the country’s export earnings, and your supplier base, ride on it. The number-two ranking is also close.

Bangladesh’s textile story is much older than 1979. Our guide to Dhaka muslin and its revival covers a cloth that was famous long before the export factories.

Why it matters to buyers today

Know-how in this industry has long moved through people. The production manager in your factory may have learned the trade inside another firm, just as the Desh trainees did. When you check a factory, ask who runs production and confirm that your order will be made under that roof. The 1985 quotas also show how fast trade rules can change, so put a date on every duty figure in your plan. If you want someone on the factory floor before you order, Loom & Harvest does factory checks for a fixed fee; you can send an enquiry.