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Course: Introduction To Industrial Social Work (101) : Globalization: Opportunities in Industrial Sector in Bangladesh
Course: Introduction To Industrial Social Work (101) : Globalization: Opportunities in Industrial Sector in Bangladesh
Course: Introduction To Industrial Social Work (101) : Globalization: Opportunities in Industrial Sector in Bangladesh
Submitted To
Submitted By
Rashedul Hasan
ID#: FR-30
Session: 2019-2020
Batch: 6th
Program: MSS in Industrial Relations and Labour Studies
Email: md.rashed44@gmail.com
Introduction
Globalization is a process of expanding trade and commerce creating borderless market all over
the world. Some view it to be the conquest of one by other increasing inequality between nations.
Others view it to be benefiting for world economic development and – also inevitable and
irreversible.
The significance of globalization differs for individuals, groups and countries. The impact of
various global flows varies depending on the stage of economic development of a country, its
access to technology, strength of its state and democratic institutions, and cultural characteristics.
In other words, the heart of the matter is the “Differential Access” to power, where power is
conceptualized as the capacity to transform material circumstances – whether economic, political
or social and to achieve goals based on the mobilization of resources, the creation of the rule
system, and the control of infrastructures and institutions. The differential, unequal, and uneven
access to the dominant organizations, institutions and processes of the new global order has,
therefore, come under increasing attack. Like many other developing countries, Bangladesh is
not in a comfortable position to cope up with the winds of globalization, as it has less access to
and use of different opportunities, living at the margin in the hierarchies of global order with low
technological base and weak industrial infrastructure. The impact of globalization, its form,
extent and multiple linkages are, therefore, very important in understanding how the process of
globalization will unfold in future, and how Bangladesh will work out its political, social and
cultural costs as it tries to reap its benefits out of it.
Industrialization is a process that happens in countries when they start to use machines to do
work that was once done by people. Industrialization changes the society as it happens. During
the industrialization of a country people leave farming work to take higher paid jobs in factories
in towns. Industrialization is part of a process where people adopt easier and cheaper ways to
make things. Using better technology, it becomes possible to produce more goods in a shorter
amount of time. Modernization and structural transformation of the economy and diversification
of the economic base, increasing returns and economies of scale, technological progress and
productivity increase, accelerated economic growth and employment creation, increase in
incomes and standard of living of the people are the universally recognized dynamic benefits
arising from industrial development. Industrialization is thus pursued as an overriding
development objective in its own right. Industries are the most important aspect of the economy.
Industries refer to the production of an economic good or service with an economy. The
processing of raw materials to finished goods and provision for services is done by the industries.
Industries can be classified as public and private. Industrial revolution led to the development of
factories for large scale production with consequent changes in society. It is the extensive
organization of an economy for the purpose of manufacturing. Industrialization introduces a
form of philosophical change where people obtain a different attitude towards their perception of
nature, and a sociological process of ubiquitous rationalization. There is considerable literature
on the factors facilitating industrial modernization and enterprise development. Key positive
factors identified by researchers have ranged from favorable political-legal environments for
industry and commerce, through abundant natural resources of various kinds, to plentiful
supplies of relatively low-cost, skilled and adaptable labor’s industrial workers incomes rise,
markets for consumer goods and services of all kinds tend to expand and provide a further
stimulus to industrial investment and growth.
The purpose of this study is to present the issue of globalization in short, the effect of
globalization in the industrial sector of Bangladesh, the ways to reap the benefit in the 21st
century by Globalization.
The research is descriptive in nature. The research technique has relied on secondary data,
collected through Literature review, case studies in other countries, Journals, Research articles,
Thesis papers, Newspapers, Online news and survey reports, garments Manufacturing Industries
Annual reports, BGMEA Yearly report and Files. The data was collected through several
techniques.
What is Globalization?
Globalization means the speedup of movements and exchanges (of human beings, goods, and
services, capital, technologies or cultural practices) all over the planet. One of the effects of
globalization is that it promotes and increases interactions between different regions and
populations around the globe.
According to the Committee for Development Policy (a subsidiary body of the United
Nations), from an economic point of view, globalization can be defined as:
“(…) the increasing interdependence of world economies as a result of the growing scale of
cross-border trade of commodities and services, the flow of international capital and the wide
and rapid spread of technologies. It reflects the continuing expansion and mutual integration of
market frontiers (…) and the rapid growing significance of information in all types of productive
activities and marketization are the two major driving forces for economic globalization.”
The ability of countries to rise above narrow self-interest has brought unprecedented economic
wealth and plenty of applicable scientific progress. However, for different reasons, not everyone
has been benefiting the same from globalization and technological change: wealth is unfairly
distributed and economic growth came at huge environmental costs. How can countries rise
above narrow self-interest and act together or designing fairer societies and a healthier planet?
How do we make globalization more just?
Lagarde defends we should pursue globalization policies that extend the benefits of openness and
integration while alleviating their side effects. How to make globalization more just is a very
complex question that involves redesigning economic systems. But how? That’s the question.
Globalization is deeply connected with economic systems and markets, which, on their turn,
impact and are impacted by social issues, cultural factors that are hard to overcome, regional
specificities, timings of action and collaborative networks. All of this requires, on one hand,
global consensus, and cooperation, and on the other, country-specific solutions, apart from a
good definition of the adjective “just”.
For some people, this global phenomenon is inherent to human nature. Because of this, some say
globalization begun about 60,000 years ago, at the beginning of human history. Throughout time,
human societies’ exchanging trade has been growing. Since the old times, different civilizations
have developed commercial trade routes and experienced cultural exchanges. And as well, the
migratory phenomenon has also been contributing to these populational exchanges. Especially
nowadays, since traveling became quicker, more comfortable, and more affordable.
This phenomenon has continued throughout history, notably through military conquests and
exploration expeditions. But it wasn’t until technological advances in transportation and
communication that globalization speeded up. It was particularly after the second half of the 20th
century that world trades accelerated in such a dimension and speed that the term “globalization”
started to be commonly used.
Examples of Globalization
Financial globalization: can be linked with the rise of a global financial system with
international financial exchanges and monetary exchanges. Stock markets, for instance,
are a great example of the financially connected global world since when one stock
market has a decline, it affects other markets negatively as well as the economy as a
whole.
Ecological globalization: accounts for the idea of considering planet Earth as a single
global entity – a common good all societies should protect since the weather affects
everyone and we are all protected by the same atmosphere. To this regard, it is often said
that the poorest countries that have been polluting the least will suffer the most from
climate change.
Globalization has benefits that cover many different areas. It reciprocally developed economies
all over the world and increased cultural exchanges. It also allowed financial exchanges between
companies, changing the paradigm of work. Many people are nowadays citizens of the world.
The origin of goods became secondary and geographic distance is no longer a barrier for many
services to happen.
The most visible impacts of globalization are definitely the ones affecting the economic
world. Globalization has led to a sharp increase in trade and economic exchanges, but also to a
multiplication of financial exchanges.
In the 1970s world economies opened up and the development of free trade policies accelerated
the globalization phenomenon. Between 1950 and 2010, world exports increased 33-fold. This
significantly contributed to increasing the interactions between different regions of the world.
This acceleration of economic exchanges has led to strong global economic growth. It fostered as
well a rapid global industrial development that allowed the rapid development of many of the
technologies and commodities we have available nowadays.
Knowledge became easily shared and international cooperation among the brightest minds
speeded things up. According to some analysts, globalization has also contributed to improving
global economic conditions, creating much economic wealth (thas was, nevertheless, unequally
distributed – more information ahead).
At the same time, finance also became globalized. From the 1980s, driven by neo-liberal
policies, the world of finance gradually opened. Many states, particularly the US under Ronald
Reagan and the UK under Margaret Thatcher introduced the famous “3D Policy”:
Disintermediation, Decommissioning, Deregulation.
The idea was to simplify finance regulations, eliminate mediators and break down the barriers
between the world’s financial centers. And the goal was to make it easier to exchange capital
between the world’s financial players. This financial globalization has contributed to the rise of a
global financial market in which contracts and capital exchanges have multiplied.
Together with economic and financial globalization, there has obviously also been cultural
globalization. Indeed, the multiplication of economic and financial exchanges has been followed
by an increase in human exchanges such as migration, expatriation or traveling. These human
exchanges have contributed to the development of cultural exchanges. This means that different
customs and habits shared among local communities have been shared among communities that
(used to) have different procedures and even different beliefs.
Good examples of cultural globalization are, for instance, the trading of commodities such as
coffee or avocados. Coffee is said to be originally from Ethiopia and consumed in the Arabid
region. Nonetheless, due to commercial trades after the 11th century, it is nowadays known as a
globally consumed commodity. Avocados, for instance, grown mostly under the tropical
temperatures of Mexico, the Dominican Republic or Peru. They started by being produced in
small quantities to supply the local populations but today guacamole or avocado toasts are
common in meals all over the world.
At the same time, books, movies, and music are now instantaneously available all around the
world thanks to the development of the digital world and the power of the internet. These are
perhaps the greatest contributors to the speed at which cultural exchanges and globalization are
happening. There are also other examples of globalization regarding traditions like Black Friday
in the US, the Brazilian Carnival or the Indian Holi Festival. They all were originally created
following their countries’ local traditions and beliefs but as the world got to know them, they are
now common traditions in other countries too.
Apart from all the benefits globalization has had on allowing cultural exchanges it also
homogenized the world’s cultures. That’s why specific cultural characteristics from some
countries are disappearing. From languages to traditions or even specific industries. That’s why
according to UNESCO, the mix between the benefits of globalization and the protection of local
culture’s uniqueness requires a careful approach.
Despite its benefits, the economic growth driven by globalization has not been done without
awakening criticism. The consequences of globalization are far from homogeneous: income
inequalities, disproportional wealth and trades that benefit parties differently. In the end, one of
the criticisms is that some actors (countries, companies, individuals) benefit more from the
phenomena of globalization, while others are sometimes perceived as the “losers” of
globalization. As a matter of fact, a recent report from Oxfam says that 82% of the world’s
generated wealth goes to 1% of the population.
Many critics have also pointed out that globalization has negative effects on the
environment. Thus, the massive development of transport that has been the basis of globalization
is also responsible for serious environmental problems such as greenhouse gas emissions, global
warming or air pollution.
Industrialization in Bangladesh
In 1947, the Indian subcontinent was divided into two parts. One was India and the other one
was Pakistan. Pakistan had two parts. One was West Pakistan and the other one was East
Pakistan, which is now known as Bangladesh. The government of then West Pakistan dominated
the people of this country in different sectors. In the economic sector, the discrimination was the
most. Most of the industries of Pakistan were in this country. However, the profit from them was
taken to West Pakistan. The progress in jute manufacturing started in that period. Jute
manufacturing sector is one of the oldest traditional manufacturing sectors of Bangladesh, which
emerged in erstwhile East Pakistan in the early 1950s. During the1960s and 1970s major share of
the manufacturing sector in national income and manufacturing employment was accounted for
by this sector. Exports of jute and jute goods were the two most important sources of foreign
exchange of Pakistan during the 1960s. The East was subjugated, as all the revenue went to West
Pakistan. In 1971, with the liberation war of 9 months, Bangladesh became independent. As after
the war, the country was left in dire states, the industrial development was very slow. However,
Ready Made Garments (RMG) started during this period. And in this sector, Bangladesh could
lay claim to considerable success. Today garment export is the main source of foreign exchange
earnings. Its success was not necessarily influenced by government policy but essentially by
outside forces. It originated in the 1970s when the investors of other South East Asian nations
ventured to set up garment factories in Bangladesh and to work around the export quotas
imposed on their native countries by the United States. In the 1980s, the Pharmaceutical Sector
made advancement in Bangladesh. It is one of the most developed hi tech sector which is
contributing in the country's economy. After the circulation of Drug Control Ordinance - 1982,
its development accelerated. During the 80s, other sectors like tea manufacturing, leather
factories etc also gained importance. In 1990s, sectors like ship breaking, steel, cement and cold
storage goods etc developed and gained momentum. From 2000 to 2012, many industries started
their journey successfully, and contributed to the economic
growth of Bangladesh. Among them are- electronics, glass, aluminum, plastic, cycle, and
ceramic etc. industries. To sum up the whole thing, we can say that after 1971, Bangladesh is
slowly and steadily turning its attention to develop its economy, through industrial development,
moving away from the agricultural sector.
The industrial sector has historically been the sector that has driven growth as countries have
moved from low to middle income status. This is because industry can provide high-wage
employment for large numbers of workers and can raise social productivity by producing high
value goods on a mass scale. Poor countries can earn valuable foreign exchange by exporting
manufactured products and the foreign exchange can be used to invest in newer machines and
technologies so that a rapid move up the technology ladder becomes possible. The average
productivity of industry is higher than in agriculture or most service-sector activities, so as
people move out of agriculture into industry, Gross Domestic Production (GDP) increases.
Bangladesh as a country with a poor land-person ration is unlikely to prosper through
agricultural growth alone. Agriculture is unlikely to deliver rapid growth in Bangladesh because
of the difficulty of setting up large-scale farms that can compete with countries that specialize in
agriculture such as Australia or Argentina. Bangladesh has natural resources but that can be
exploited, with the exception of natural gas. Thus, industrialization and specialization in
manufacturing is the obvious way in which Bangladesh can raise its per capita income and social
productivity. The industrial sector consists of manufacturing, together with utilities (gas,
electricity and water) and construction main industries, textiles and apparel, jute, sugar, tea,
leather, telecommunications, pharmaceuticals, cement, ceramics, shipbuilding, fertilizer, food
processing, paper newsprint, light engineering, etc.
Different size categories of industries are defined according to Industrial Policy in the following
manner:
Large Industry
In the case of manufacturing activity, large industry will include enterprises with either the value
(replacement cost) of fixed assets excluding land and building in excess of Tk. 200 million or
enterprises having more than 150 workers.
In the case of non-manufacturing industrial activities, large industry will include enterprises with
either the value (replacement cost) of fixed assets excluding land and building in excess of Tk.
100 million or enterprises having more than 50 workers.
Medium Industry
In the case of manufacturing activity, medium industry will include enterprises with either the
value (replacement cost) of fixed assets excluding land and building in the range of Tk 15
million to Tk. 200 million or enterprises having between 50 and150 workers.
In the case of non-manufacturing industrial activity, medium industry will include enterprises
with either the value (replacement cost) of fixed assets excluding land and building in the range
of Tk 5 million to Tk. 100 million or enterprises having between 25 and 50 workers.
Small Industry
In the case of manufacturing activity, small industry will include enterprises with either the value
(replacement cost) of fixed assets excluding land and building in the range of Tk 0.5 million to
Tk. 15 million or enterprises having between 10 and 50 workers.
In the case of non-manufacturing industrial activity, small industry will include enterprises with
either the value (replacement cost) of fixed assets excluding land and building in the range of Tk
0.5 million to Tk. 5 million or enterprises having between 10 and 25 workers.
Micro Industry
Micro industry will include industrial enterprises with either the value (replacement cost) of
fixed assets excluding land and building of up to Tk 0.5 million or enterprises having 10 or fewer
workers.
Cottage Industry
Micro industries with predominance of family labor will be defined as cottage industries.
Reserved Industry
Industries that are kept reserved for public investment due to national security or other reasons
have been termed as reserved industries. Current list of reserved industry is given as follows:
Thrust sectors will include industries that require preferential policy support to harness their high
growth potentials. This may include industries that currently occupy a dominant position in the
economy or industries which have high growth potentials but are currently non-existent or are in
a nascent stage in the economy. The government will prepare the list and update them from time
to time in consultation with all stakeholders and on the basis of information collected on various
industries, their growth potentials and likely positive impact on the economy. The government
will also determine specific policy support to be provided to these industries on the basis of the
identification of constraints faced and past performances of the industries. Current list of thrust
sectors is given as follows:
Over the years, the boundaries of the industrial manufacturing sector have been stretched
to cover transport sector, nationally important activities that include many service sectors.
Some service sector industries are listed below:
Hospitals and clinics
IT-based activities
Agro-based activities such as fishing, fish preservation and marketing
Telecommunication
Transport and communication
Forestry and furniture
Construction industry and housing
Construction business
Entertainment
Photography
Hotel and tourism
Warehouse and container service
Printing and packaging
Ginning and baling
Laboratory
Cold storage
Horticulture, flower cultivation and flower marketing
Food crop and oilseed processing
Knowledge society with high quality merit and efficiency
Bangladesh is mainly an agricultural country. Agriculture has always been given priority and as
a result industries have been ignored. Recently some agro-based industries have been set up.
There are some reasons for which the country has lagged behind in heavy and medium-level
industries. Industrialization in Bangladesh faces some challenges due to some structural
constraints that hindered industrial growth. Let us now consider the challenges faced by the
industry sector in general.
The globalization process offers both opportunities and poses challenge for Bangladesh. It has
both positive as well as negative impacts. The positive impacts include influence on
parliamentary democracy and adult franchise, a global outlook and modern mindset of the
people, the positive effect on education, environment and women emancipation, access to IT, the
entrance into global trade, marketing and joint-venture entrepreneurship and the availability of
high quality and low cost products. The negative impacts include the downfall of local industries
and products and competitiveness resulting in local unemployment, the threats to the survival of
culture, community norms, ethics and values, the widening of the gap between the rich and poor;
and the foreign dominance and dependency on investors. Bangladesh, although poor in most
respect, is not entirely without resources. It has manpower (cheap labour), water resources and
mineral resources (coal, gas and oil), if mobilized effectively, its vast but homogeneous and
resilient population can take advantage of the information technology that is now available and
in the process create a pool of skilled labour force. The per capita low-income in Bangladesh can
be attributed to the workers inadequate training, capital and technology. The liberal international
trade has led to an increase in the level of employment. Therefore, there is an urgent need for
Bangladesh to conduct its economic diplomacy with vigor and vision. The ways to reap benefit
from different sectors are enumerated in the subsequent paragraphs.
Foreign Policy
The foreign policy of Bangladesh should focus to broaden the scope for prosperity through the
creation of a modern and efficient economy. It is mandatory for Bangladesh to make diplomatic
efforts to make it possible for the Bangladeshi workers to work in other countries where there re
better opportunities. In this era of competition, Bangladesh will not necessarily get what it thinks
to deserve but only what it can negotiate. If the issue is not negotiated through legal means, it is
not impossible that labour would flow out of the country illegally.
Bangladesh needs to take advantage of the opportunities that globalization offers through the free
flow of information and the use of English as an international language. This would help produce
a better-trained workforce capable of competing at the international level. It is well know that
productivity is linked to skills and knowledge.
Access To Markets
Bangladesh has to negotiate preferential access to the markets of the western developed
countries, as well as those of India and China, huge trade gap in the bilateral trade relations has
to be redressed. In the era of competition, Bangladesh will not necessarily get what it thinks to
deserve but only what it can negotiate.
How to Address Challenges Globalization – Some Recommendations
Bangladesh needs improvement on the normative structural and substantive aspects of policy and
political framework. The normative political discourse and ideological question of culture needs
to be linked with the issue of political leadership as a factor in regime legitimization.
Globalization is now largely based on a strong technological foundation. The electronic transfer
of information via Internet has now created an instantaneous and interconnected world of
information resulting in a 24 hour trading network. The advancement in information and
technology will help disseminate knowledge in the field of study and technology. Globalization
is now only what technology makes possible.
Bangladesh will have to take revolutionary steps for expansion of the capacity for work for its
people. The following strategy of energy development may be adopted:
a. Demand and supply of energy should be planned on the basis of discrete areas into which
the country should be divided.
b. For electric power generation and distribution, waiting applicants for generation of power
should be permitted to undertake many projects. The monopoly of power Board in supply
of power to customers should be broken.
c. The policy on trading energy resources must be very pragmatic. Coordinated planning of
energy development and supply should enjoy priority in Bangladesh. However, equally
gigantic is the need for enhancement of the capacity for work for a huge number of
people. If the problem is dealt with on a regional basis, the solution of the problem
becomes manageable.
For a dynamic investment climate, Bangladesh should confront the following pre conditions
considered conducive for investment:
a. Primacy of political pluralism.
b. Establishment of the rule of law.
c. Dominant role for local government and community initiatives.
d. Rapid spread of education.
e. Widespread dynamism in agriculture sector.
f. The environment of an open and competitive economy.
REFERENCES