Globalization and Its Impact on Bangladesh Economy Essay Example
Introduction
Globalization in the broadest sense implies integration of economies and societies across the globe through the flow of technology, trade and capital. It basically refers to a process that enables people, goods, information, norms, practices and institutions to transcend national jurisdictions through markets, technologies, interests and information flows.
Four types of changes characterize globalization. First, it involves a stretching of social, political and economic activities across frontiers, regions and continents. Second, it is marked by the growing magnitude of interconnectedness and flows of trade, investment, finance, migration, culture, etc. Third, it can be linked to a speeding up of global interactions and processes. And fourth, the effects of distant events can be highly significant elsewhere and specific local developments can have consi
...derable global consequences.
Thus the boundaries between domestic matters and global affairs become increasingly fluid. Globalization, in short, can be thought of as the widening, intensifying and growing impact of worldwide interconnectedness. It causes an expansion in the volume and variety of cross border transactions in goods and services. Globalization is a much used term and there are diverse views as to how and why globalization is occurring this time around. The late 19th and early 20th centuries saw a globalization in economic markets, but we can see its pervasive and widespread impacts at the present time.
Every country in this world enters into global economy and trying to cope with the pace of global economy. Bangladesh is one of the developing countries in the world and its economy has already being impacted by global economy. It is not possible for a third world country like Bangladesh
to keep pace with global economy, because it is conceivable that the origins of globalization lie in the political decision by merely the developed countries of the world. Bangladesh’ economy experiences a recession of industrial growth.
The study is focused that there is strong opportunity for Bangladesh to boost its economy, but the socio-political situation should be favorable one to enhance savings and investment in this country. The study articulates some strong recommendations that could make Bangladesh even stronger to boost to compete globally to a greater magnitude. It is conceivable that Bangladesh needs to privatize its State- owned enterprise (SOEs) and should maintain an unassailable relation with World Bank, IMF and other donor agencies. It is a big challenge for Bangladesh to contend in global economy through considerable internal and external obstructions.
The entire paper is arranged by giving a brief current economic condition of Bangladesh followed by an introduction initially; after then the next section is discussed how Bangladesh economy impacted through regional trade agreement and later the paper portrays the role of privatization in Bangladesh economy. And this paper also discusses how Globalization affects the whole economy of our country Bangladesh. Later the paper discusses some constraints of Bangladesh economy and then it illustrates some basic recommendations that could make this economy stronger to compete with global economy.
And at last a conclusion is illustrated that reflects the overall theme of this paper. It would be very difficult to keep pace with modern globalization. Therefore, one of the greatest challenges faced by Bangladesh in this century is how to strengthen its participation in the global economy in a manner
that will bring widespread and sustainable benefits to its people. Motivation and Significance of the Research The motivation that we have for this research is based on the fact that we are Bangladeshi who have seen and experienced the impact of globalization phenomenon on economic development.
Developed countries use globalization for improving their economy in many ways. We have marked how these countries use globalization to their advantage. Having compared the socio-political and economic environment of Bangladesh and the countries we have researched, we are now in a position to understand the likely effects of globalization on Bangladesh economy. We would like to take this opportunity to do the research based on our experience and understanding of the subject from our reading. Research Questions The primary question of this term-paper is: What is the overall impact of Globalization in Bangladesh economy? What should Bangladesh do to use the advantages of globalization in improving her situation?
Literature Review
Many books and articles have discussed the various effects of globalization exhaustively. These studies include globalization as a phenomenon in general and the positive and the negative impacts of globalization in particular. Even though many books and articles have addressed globalization from the developing countries point of view, few even mention its impact specifically on Bangladesh. Globalization is a growing concern and it is perceived as a vast subject that can impact all aspects of the world, or a nation.
People blame globalization for affecting everything from culture, to political systems, to religious institutions, and the economy; all of these perceived impacts of globalization would impact Bangladesh differently. It is important to determine how
exactly it can impact Bangladesh. This paper will concentrate on finding viable options for Bangladesh to sustain the world of global economy. The paper will also focus on the measures that Bangladesh might consider in using the effects of globalization in its economic growth. The literature generally looks at globalization from three different angles.
These are:
- Globalization as a phenomenon.
- The positive impact of globalization.
- The negative impact of globalization.
During this period, up to the end of the fifteenth century, the volume of long distance trade, travel, and communications was inevitably irregular.
Increased trading expeditions by British, Dutch, and Portuguese merchants in the seventeenth century raised the demand for colonial goods such as coffee, tea, sugar, tobacco, and chocolate. The requirement for more production of these goods as the demand increased prompted the beginning of slave trade from Africa to the Americas and Europe. Following these expeditions, European languages were easily transplanted to other continents and the three monotheistic religions namely Islam, Christianity and Judaism took root. In the nineteenth century, the technology revolution in transport and communications including the emergence of the railway, the telegraph and the steam ship all lowered freight rates and raised incomes therefore further boosting globalization.
Core Elements of Globalization: Basically, globalization rests on a tripod namely, the expansion of markets economic), challenges to the state and institutions (political), and the rise of new social and political movements (cultural). 8 economically, technological changes and government deregulation have permitted the establishment of transnational network in production, trade, and finance creating what is referred to as a “borderless world”. The second
element affects States. Political power and activities extend across the boundaries of nation- states while policy making on issues such as human rights, environmental degradation and nuclear safety have required global consensus.
The third element of globalization affects more than markets and states. It is altering the lives of people across the globe. Fast dissemination of media, books, music, international ideas and values has produced a somewhat global culture. Positive impacts of globalization: A thorough understanding of the effect of globalization is needed to use its advantages to improve the economy of Bangladesh. This may also help Bangladesh maintain a sustained growth in the face of likely economic peril.
Though some view NGO (Non-Government Organization) as a tool of economic exploitation, it brings changes on the living condition and status of the poor and rural people. Excludes are now becoming Includes. While most low-income countries depend largely on the export of primary commodities, Bangladesh has made the transition from being primarily a jute-exporting country to a garment-exporting one. This transition has been dictated by the country's resource endowment, characterized by extreme land scarcity and a very high population density, making economic growth dependent on the export of labor-intensive manufactures.
A greater integration with the global economy seems to fit well with Bangladesh's development efforts. The garment sector opens the door of sufficiency to the people who previously live in a hurdle living. The export-oriented garment industry presently employs around 2. 5 million workers - mostly women from low-income, rural backgrounds. The second dominant export-oriented activity, shrimp farming, is also very labor intensive, presently employing nearly half a million rural poor. This economic
revaluation is not only creates skilled sectors but also gradually decreased unemployment problem.
More generally, import liberalization is likely to have contributed to the creation of productive employment for the poor through the strengthening of many small-scale and informal sector activities that have benefited from improved access to imported inputs. Another issue of great importance to Bangladesh is that the free movement of migrant workers across borders be expanded, for workers' remittances play an important role in its economy. Moreover, as a result of increasing global connection and technological improvements diversification of export is possible as many new export items are added as the global demands are increasing.
We can talk about ship building industry and IT based call center service are now coming as a new dimension in our economic arena. Globalization also creates impact on our culture and social structure as we are now considering ourselves as a global citizen. The interaction with other cultures and knowledge and information about other societies create a great impact on our lifestyle and thinking. c) Negative impacts of globalization: The removal of the Multi-Fiber Arrangements (MFA) quotas now threatens to increase competition in the global garment industry and thus limit Bangladesh's growth.
The strength of the industry depends on the export quotas dictated by the MFA and preferential access in the major Western markets. Moreover, other export industries are unlikely to take its place if the garment industry shrinks. It is not easy for a Least Developed Country (LDC) like Bangladesh to specialize in manufactured exports. Having low wage costs can hardly compensate for its lack of marketing skills and infrastructure and poor
overall investment climate. Moreover, the high degree of dependence of domestic industries on imported raw materials and industrial inputs makes it difficult for Bangladesh.
In this connection, it is likely to mention that, the Generalized System of Preferences (GSP) rules were devised decades ago to help developing countries promote export-oriented industrialization. But, in effect, the rules proved discriminatory against LDCs like Bangladesh that count on low value-addition processing activities. On top of these rules, Bangladesh also has to worry about non-tariff barriers such as those relating to environmental or labor standards. Anti-dumping actions are already under way against exports from Bangladesh,
Also, the role of globalization played by the western dominated institutions such as, the World Bank (WB), International Monetary Fund (IMF), Asian Development Bank (ADB) and the World Trade Organization (WTO). The agenda of the Bangladesh’s economical sector and upcoming debt formulated by these kinds of organizations are running on the process of economic exploitation of a country. For this, they are willing to give money for construct a road rather than a factory. Beside this for every debt they are selling their products in our country without any tax.
Globalization is a well excepted term all over the world, but developed countries are the real beneficiaries of the concept; whereas the developing countries are in a confused situation to relate the term on their economic, social, political and personal life and it cannot helps to reduce the gap between haves and have not.
Objective of the Study: The overall objective of the project is to expand the theoretical discussion on the relationship between globalization, environmental change, resource use social
suffering and human security in the context of a least developed country-Bangladesh.
And the primary objective is to analysis how globalization effect on country’s economy. This study will:
- investigate the role environmental change play in social conflicts and resultant social suffering;
- assess the role of population movement as a factor of environmental degradation;
Critically assess the gender dimension of social change resulting from the interacting forces of globalization and environmental change. The principal objective of this study was to identify all major dimensions and issues of Globalization and attempt to explain those, to the extent possible, from industrial perspective.
- The specific objectives set were as follows:
- To assess the effect and impact of the process of globalization on the life and livelihood of industry especially in Bangladesh.
- To analyze the overall economic condition of Bangladesh.
- To find the opportunities and challenges of Globalization in the context of Bangladesh economy.
Limitation of the Problem
All data are not available in internet. It was very short time to collect all relevant data and to prepare this assignment. Also we faced load shedding problem and our lab was over crowded that distract our mind sometimes. . Analysis a) Overall Economic Condition of Bangladesh: Bangladesh is one of the poorest countries in the world, but it is plausible that the overall growth rate of Bangladesh is not stagnant; the overall growth rate of Bangladesh is actually moving forward. The growth average of Bangladesh is 5. 4%per year over the FY01-05 period, which has been the highest since the country’s independence (The World Bank).
Bangladesh has global merchandize trade relationship ships with many countries around the world.
Bangladesh has a good market in the United States, United Kingdom, Australia and Germany. Bangladesh also exports goods and services from around the globe. The economy of Bangladesh is a rapidly developing market-based economy. Its per capita income in 2010 was est. US$1,700 (adjusted by purchasing power parity). According to the International Monetary Fund, Bangladesh ranked as the 43rd largest economy in the world in 2010 in PPP terms and 57th largest in nominal terms, among the Next Eleven or N-11 of Goldman Sachs and D-8 economies, with a gross domestic product of US$269. billion in PPP terms and US$104. 9 billion in nominal terms.
The economy has grown at the rate of 6-7% per annum over the past few years. More than half of the GDP is generated by the service sector; while nearly half of Bangladeshis are employed in the agriculture sector. Other goods produced are textiles, jute, fish, vegetables, fruit, leather and leather goods, ceramics, ready-made goods. Garments sector is the largest exporting sector for Bangladesh. For Bangladesh, openness to trade would be a vital basis of future growth.
Growth from trade directness will depend upon simultaneous investment climate reforms that would boost competitiveness to domestic firms. In Bangladesh the government should undertake policies to attract overseas remittance into productive investment activities. Remittances from Bangladeshis working overseas, mainly in the Middle East, are the major source of foreign exchange earnings; exports of garments and textiles are the other main sources of foreign exchange earnings. Ship building and cane cultivation have become a major force of growth.
style="text-align: justify;">GDP's rapid growth due to sound financial control and regulations has also contributed to its growth; however, foreign direct investment is yet to rise significantly. Bangladesh has made major strides in its human development. The land is devoted mainly to rice and jute cultivation as well as fruits and other produce, although wheat production has increased in recent years; the country is largely self-sufficient in rice production. Bangladesh's growth of its agricultural industries is due to its fertile deltaic land that depends on its six seasons and multiple harvests.
Transportation, communication, water distribution, and energy infrastructure are rapidly developing. Bangladesh is limited in its reserves of oil, but recently there has been huge development in gas and coal mining. Bangladesh’s economy has been remarkably resilient, with GDP growth averaging 5? % a year for the past 15 years. But the growth has been off a low base, so the country remains one of the poorest in Asia. Its economic base is narrow (based around garments and agriculture) and vulnerable to natural disasters. Moreover, despite a recent period of relative calm, political stability is far from assured.
Bangladesh is below the regional average for per capita income, growth and creditworthiness. The business climate can be difficult – but according to the World Bank’s Doing Business Survey no worse than the regional average. Like most developing economies, Bangladesh can be a risky place to do business. But it does have attractions: a large and growing population; steady GDP growth; and strong demand for foreign capital to meet the country’s large infrastructure and energy needs.
Over the past 15 years, growth has been rapid
and has slowly accelerated. Over 2012-14, the IMF expects growth to be over 6% pa, an impressive performance in the current economic climate. However, this partly reflects strong population growth, with per-capita income growth continuing to lag the regional average. Moreover, inflation remains a problem, with prices recently being boosted by reductions to fuel subsidies and a weakening in the currency. Inflation is also very exposed to swings in food prices, which account for 60% of consumption.
Opportunities of Globalization: Bangladesh has a low human capital stock and is relatively closed to the global economy even by standard of the other low-income countries. Therefore, Bangladesh has not yet fully become part of the global economy. This is as truer in trade as in technology achievements. Globalize offers the potential to free Bangladesh and other developing countries from the restrictions imposed by a relatively small domestic market, low saving and limited access to world technology and credit.
Opportunity to break the vicious circle: It offers an opportunity to break the vicious circle of savings and investments, a long-standing important challenge for all developing countries. Better education, training, technology, equipment and infrastructure in general raise living standard. Due to globalization, foreign investment in our country will increase. If we can properly utilize it then employment will increased which will raise the income of people of Bangladesh. So, if there is a high rate of income then savings of people will increased which will enable us to break the vicious circle.
Alternative source of domestic investment finance: Globalization offers an alternative source of domestic investment finance. Such financing is channeled through direct investment and frequently
come with attached benefits, such as technology transfer, training, marketing networks and managerial and technical expertise. Foreign investment is especially attractive when it brings its own physical capital and the means to enhance human capital of domestic citizens.
Increasing the living standards of poor people and employment opportunities: Globalization is increasing the living standards of poor people in Bangladesh. Industries from foreign investments create employment opportunities for a large number of people including young women who, for the first time, can visibly enter the male dominated public space. Foreign and export oriented industries are changing the economic and social scenario of Bangladesh which, results in an increase of living standards.
Motivating the people and increasing the modernity of our society: Increasing globalization is motivating the Bangladeshi people and increasing the modernity in our society. A person can forces by inspiration refers what effect his direction, intensity, and persistence of voluntary behavior. Foreign investments create high paying jobs, which require more knowledge and skill, therefore motivating people to work for a higher education. Bangladeshi students are performing better than before. Advertisements for foreign products also motivate people. Globalization allows foreign companies to advertise their products in our country. When people watch advertisements for expensive foreign products, they want to buy them even if they don't have the ability.
The transfer of technology: Bangladesh has largely benefited from the transfer of technology. One nation cannot produce everything, because it has limited resources. Globalization gave us the opportunity to use modern technology. We got world-class telecommunication technology, which was not possible without foreign investment.
Modern telecommunication technology: Modern telecommunication technology connected us to the
rest of the world. Bangladesh are getting technological advantages like computers and the Internet, transportation and online banking with evaluation in the modern world. We are earning foreign currency and creating many new jobs by exporting computer software. Globalization has made a big social and economic change in Bangladesh.
Increased competitiveness and raise export potentials: Product market competition induced by government policy of economic liberalization can bring about increased competitiveness and raise export potentials. The competition can be enhanced by reductions in transport and communication costs of conducting international trade, by removal of external tariff barriers, and by more vigorous application of pro-competitive policies in those domestic industries not exposed to international competition. Competition is healthy for the economy in the long run. It not only influences the relative bargaining power of firms and workers but it is also a force for renewal and change.
Actions of Employers to reap the opportunities of Globalization: Volatility in the labor market has prompted employers in Bangladesh to become more organized and to move towards greater unity. There is a tendency among the employers to shift certain risks and responsibilities away from the enterprise or society to the workers. Employers have tended to introduce new labor-saving technologies to reduce cost of production and to avoid the risk of labor unrest.
Unlike in the public sector, employers in the private sector have resorted to growing casualization of workers resulting in the deprivation of workers of provident fund, gratuity, normal working days and hours, group insurance, leave encashment, leave with pay and pension benefits and, above all, job security
Actions of Trade Unions to reap the
opportunities of Globalization: Economic integration and increasing competition erode the bargaining power of trade unions. However, the increasing mobility of goods and capital allows such obstacles to be readily circumvented, thereby prompting the trade union movement to adopt a global approach.
Globalization has also created opportunities for trade unions by offering organized labour the alternative of collaborating with employers to enhance productivity, adaptability and product or service quality, in exchange for job security and higher wages. 10. Benefit from return migrants: Because of globalization also Bangladesh can benefit from return migrants. Migrants make-up a pool of potential investors and managers who have benefited from foreign training, not merely from academic or vocational training but in the wider sense of learning on the job and assimilating more of the global business culture .
Migrants are likely to return for changing lifestyle for example they wish to return home to set up a business (however small) or to take advantage of early retirement. Due to globalization these migrants are interested to invest in Bangladesh. Foreign Direct Investment: FDI in RMG industry should be welcomed and pursued to ensure higher investment in this sector. FDI would also help in transferring technology and ensure bigger market access by providing direct linkages with the retailers. Some other Opportunities of Globalization: Globalization has also created some new scope and opportunity for the development.
Following may be considered as opportunities:
- Bangladesh is being integrated with global economy and business.
- Expanded private sector employment opportunity with poor labor rights.
- Increasing competitiveness and efficiency.
- Emergence of new sectors of production and employment according
to the global need, such as ternary, footwear, pharmaceuticals, RMG, etc.
Potential to boost productivity and living standards across the globe, because a globally integrated economy can lead to a better division of labor between countries, allowing low-wage countries like Bangladesh to specialize in labor-intensive tasks while high-wage countries use workers in more productive ways thus allowing global firms to exploit bigger economies of scale. So we think Globalization will help Bangladesh a lot to increase its overall economic condition and others sectors that need to be strong to build up a decent economy.
Challenges of Globalization
Within a country, there is the challenge of forgoing liberalization policies that promote greater integration of the domestic economy into the global economy. There are pressures from trade unions, lobby groups and local businesses over the effect of these policies on jobs and the closure of
local industries. These can make it politically and socially difficult to implement reforms that could benefit a country in the medium to long term. The responsibility for achieving the right balance and pace of adjustment lie with individual Governments, but in practice this is not simple as it appears.
Bangladesh pursued a number a number of stabilization and structural reform programs between 1987 and 1993, and made considerable progress in achieving macroeconomic stability. The various challenges of globalization that Bangladesh faces are as follows:
Challenges for national economy: During the period of rapid integration with the global economy, the incidence of poverty appeared to have increased and so have inequalities in the country. Economic reforms in the country produced disappointing results in the absence of a system to induce entrepreneurs to invest in industries. Lack of institutions to make the economy efficient and reduce transaction costs was also a reason behind the country's poor performance. Inequalities increased in the country during the period of rapid globalization. Inequality in income distribution increased quite substantially both in rural and urban Bangladesh.
Challenges for our culture and social life: Globalization makes worldwide boundaries fade away and enlarging contest in the market place. For globalization we are facing a huge impact on our culture and social life in the modern world. For example, McDonalds introduced American fast food to other parts of the world. The American fast food of McDonalds, Pizza Hut, etc. are introducing to our country, which is a challenge for our Bengali fast food. Also the Indian culture becomes a major challenge for our own Bengali culture now-a-days.
Challenges for business: As
in the case of industries, globalization impinges heavily on the business in Bangladesh with destabilizing forces debilitating balance of trade and balance of payments. Bangladeshi products are increasingly losing competitiveness in the global market due to growing cost of business exacting high prices. The cost of business is increasing primarily due to port problems, bureaucratic tangles in customs department and no improvement in lead-time. In contrast, an increasing number of countries are offering low-cost products.
Challenges of Globalization on Industry: In Bangladesh many industrial units in jute, cotton, RMG, and paper and several other sectors are closed down by a number of reasons of which globalization is one crucial factor. These industrial units have difficulties to compete both domestically and internationally. Even in the domestic market, it is difficult for them to keep up the competitive advantages compared to imported goods. Notably, in all these sectors there is considerable inflow of FDI and presence of MNCs (multinational companies) and there is no SOE.
Challenges faced by ICT and Bio-technology: Such challenges faced by Bangladesh for the ICT and Bio-technology and their Impact on Employment and Intellectual Property Rights are:
- Makes some of the traditional farming role of people redundant leading to unemployment particularly among older and rural people.
- It's not a desires and traditions of our communities to imported bio-technologies always.
- Needs to make easy to codify and move some of the un-codified knowledge of local citizens to the worldwide market. However if uncompensated, the move deprives people the economic gains and royalty they should be entitled to.
Challenges for Power Sector: Government has opened up
foreign investment in power generation as independent power producer (IPP), and has also privatized transmission and distribution to the private sector (DESA, DESCO). Significant private foreign capital invested in the sector.
As a result Bangladesh Power Development Board gradually has been losing its control over the power sector. Companies appointed employees under new terms and conditions. Job security of the employees also was ensured by the agreement.
Challenges for Telecommunication: Telecommunication service was exclusively under Bangladesh Telephone and Telegraph Board (BTTB). This sector has been opened up for private investment. Different private telephone companies, TV channels, marine and rural telecommunication, radio trucking service and revering telecommunication have already been opened up for private sector.
These private phone companies or TV channels are capturing a large number of customers. As a result govt. owned companies losing their customers. Government has been making different efforts to privatize this sector like PDB under company management. There is strong opposition from employees against privatization of BTTB. 8. Challenges for Labor Market: In Bangladesh many industrial units jute, cotton, paper and RMG, and several other sectors were closed down by a number of reasons of which globalization is one of crucial factor.
It is estimated that near about 7 thousand big and medium size industries closed down as an impact of globalization. In Bangladesh near about 2 million people lost their employment due to closure of industries. Most of the privatization and closure of industries resulted in huge retrenchment. Fall in the aggregate demand for labor has accelerated declination of wage. Real wage declined due inflation and currency market deregulation. Also there is a decreased in
number of working people under permanent contracts of employment.
Non-traditional forms of employment including part time, casual and contract labor, home-work and migratory work increased. Casualization of workers in the private sector resulted in deprivation of provident fund, gratuity, normal working days and hours, group insurance, leave, pension and above all job security. Numerical functional flexibility in labor market increased, increased of out sourcing of work, and increased irregular payment. In the name of competition workers are forced to work overtime. Minimum wages of the workers in the private sector are not protected.
Challenges for Employment: Challenges for employment are as follows:
- Trade liberalization and privatization created social insecurity and aggravating, unemployment, underemployment.
- Social security of the workers decreased.
- Reduced job security, workers are terminated without benefits.
- Working environment degraded, especially in the private and informal sector.
- Labor laws are not implemented in most of the privately owned industries.
Mutual dependence: Globalization has increased mutual dependence between macroeconomic stability and good institutions and organizations, and made stability vulnerable to volatility in financial markets.
Financial and currency crises around the world have occurred with an acceleration pace and with relatively more devastating impacts since the globalization process accelerated from 1989. 11. Some other Challenges: Bangladesh has to face some challenges to fight as well as cope with globalization. Challenges are as follows:
- Build up strong resistance against privation.
- Reopening of closed industries.
- Unite trade union movement to achieve greater collective bargaining power.
- Capacitate trade union with new bargaining approach.
- To fight against
the fast changing rules of the game of rapid transformation workers need to develop knowledge based skill in manufacturing through continuous updating of skill to face the challenges of globalization.
Globalization has both positive as well as negative impacts on its players. In an increasingly open, integrated and borderless world there have been remarkable growths in trade and exchanges. It was basically possible because of the democratization of technology, finance and communications. On the other hand globalization also generates number of problems.
Recommendations
The impact of globalization on the economy of Bangladesh is mixed with marginal positive outcome overshadowed by vast negative results. Globalization provides many opportunities for development for Bangladesh and its people, including the potential to improve wages and living standards. It has challenged many economic strategies of the past as the way towards development. It provides an impetus and incentive to develop human resources and to improve productivity as key factors of competitiveness and improved living standards. Globalization has made Bangladesh
conscious of the need to improve productivity.
Even unions in Bangladesh have come to acknowledge the importance of productivity enhancement to the standards of living of their own members. > Trade liberalization and privatization has created social insecurity in terms of loss of jobs and aggravating unemployment and underemployment in the country pointing to the need for social protection to contain insecurity of the workers. Voice of the common workers, collective awareness and participatory management of trade unions at various levels are the three main processes for the improvement of trade union governance.
The existing practice of centralized governance of trade unions has largely contributed to the major failures in the labor processes in Bangladesh. Competitive labor market is expected to link wages with productivity. In the case of SOEs, real wage growth outpacing productivity growth is a factor raising unit labor costs and reducing international competitiveness calling for adjustment of real wages in line with productivity growth. The state thus has a critical role to play; both in handling such shocks and in helping people and firms seize the opportunities of the global market place.
Globalization also sharpens the need for international co-operation in at least five areas, such as:
- Managing Regional Crisis,
- Promoting global economic stability,
- Protecting the Environment,
- Fostering Basic Research and the dissemination of know-how
- Making International Development Assistance more effective.
Some Recommendations are given below: Government level reforms: Bangladesh Government has taken initiatives or resources for telecommunications and transports which are not along to meet the nation’s growing requirements.
Bangladesh government should continuously improve system
capabilities to enhance the private sector participation. Monetary Policy: The central bank must maintain a close look on the growth of the monetary base or domestic credit creation. Attract free flow of FDI : Foreign Direct Investment is inevitable for any developing economy. Bangladesh should create proper field to attract more FDI in industrial sector. Productive investment: Bangladesh needs substantial quality investment in the industrial sector and investment in those activities where we can produce more efficiently.
The economic growth rate in Bangladesh is not necessarily constrained by insufficient savings; rather it is due to poor level of investment and lack of efficient use of capita Integration into World Markets: In Bangladesh, firms can be internationally integrated by means of ownership or by selling their products in foreign markets. In the readymade garments and leather/footwear industries, most of the firms are majority exporters, i. e. , they sell more than 50% of their output in export markets. In contrast, in the pharmaceuticals industries there are no majority exporters (Fernandes2006).
Limited foreign capital assimilation: Every year Bangladesh seeks foreign capital for undertaking various projects. But foreign capital can be a substitute for domestic savings only to limited extent. Foreign aid, commercial borrowing and portfolio investment can limit the expansion of savings by expanding consumption. The government should immediately constitute a national committee on aid for trade to work on getting a better share of the aid-cake as well as adopt a foreign aid policy statement in consistent with the new PRSP (Poverty Reduction Strategy Paper) to make donors clear about the priority areas of aid.
Conclusion
Globalization has a very far-reaching effect
on almost every sphere of life. In the question of economic development and growth it is even more being in this era of globalization. Developing country like Bangladesh must take the advantages of globalization and attempt to improve her economy. However, we found from each piece was that the impact of globalization was more negative on Bangladesh than it was positive.
Globalization has not only kept Bangladesh from advancing ahead in economic development, but it has changed the traditions and ways of life for the indigenous people for the worse. As a poor country, Bangladesh needs to be more concerned about the appropriate implementation of Globalization. As we find thru our research, Bangladesh’s potentials to economic globalization is highly promising. We believe that the recommendation made in this paper if implemented well will take Bangladesh to a point of sustained economic growth and development.
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