Globalisation and development - Bangladesh context

Globalisation is a complicated issue. There is no question that globalisation has done a lot of good for many developing countries like Bangladesh who now have access to global markets and can export cheap goods. Globalisation has been very good for multi-national corporations also. Proponents of globalisation argue that it allows poor countries and their citizens to develop economically and raise their standard of living, while opponents of globalisation claim that the creation of an unfettered international free market has benefited multinational corporations in the Western world at the expense of local enterprises, local cultures and common people.
Globalisation is a process of interaction and integration among the people, companies and governments of different nations, a process driven by international trade and investment and aided by information technology. This process has effect on the environment, culture, economic development and prosperity and human physical well-being in societies around the world.
Globalisation is not new, though. For thousands of years, people-and, later, corporations-have been buying from and selling to each other in lands at great distances, such as through the famed Silk Road across Central Asia that connected China and Europe during the middle ages. Likewise, for centuries, people and corporations have invested in enterprises in other countries. In fact, many of the features of the current wave of globalisation are similar to those prevailing before the outbreak of the First World War in 1914.
But recently, the pace of globalisation has increased dramatically. Advances in transportation and telecommunication network and its modern offspring, the internet and mobile phones, have been major drivers of globalisation, generating further interdependence in economic and cultural activities. Money, labour, technology and raw materials move more swiftly across national borders than ever before. Along with products and finances, ideas and cultures spread more freely. As a result, laws, economies and social movements are blooming at the international level. Many politicians, academics and journalists treat these trends as both inevitable and welcome changes.
Policy and technological developments of the past few decades have spurred increases in cross-border trade, investment and migration so much that many observers believe the world has entered a qualitatively new phase in its economic development. Distinguishing this current wave of globalisation from earlier ones, author Thomas Friedman has said that today globalisation is "farther, faster, cheaper and deeper."
Globalisation has its influence on different spheres of life, such as economic, cultural, political, geographical, technological etc. Economic globalisation is the increasing economic interdependence of national economies across the world through a rapid increase in cross-border movement of goods, service, technology and capital. With improvements in transportation and communication, international business grew rapidly from the beginning of the 20th century. In most countries, such trade constitutes a significant share of gross domestic product (GDP). Industrialisation, advanced transportation, multinational corporations, offshoring and outsourcing all have a major impact on world trade.
Measurement of economic globalisation focuses on variables such as trade, Foreign Direct Investment (FDI), portfolio investment and income. However, newer indices attempt to measure globalisation in more general terms, including variables related to political, social, cultural and even environmental aspects. One index of globalisation is the KOF Index, which measures three important dimensions of globalisation: economic, social, and political.
Cultural globalisation refers to the transmission of ideas, meanings and values around the world in such a way as to extend and intensify social relations. It involves the formation of shared norms and knowledge with which people associate their individual and collective cultural identities.
Supporters of globalisation argue that it has the potential will to make this world a better place to live in and solve some of the deep-seated problems like unemployment and poverty. According to them, globalisation and democracy should go hand in hand. It should be pure business with no colonialist designs. Globalisation represents free trade which is supposed to reduce barriers such as tariffs, value added taxes, subsidies and other barriers between nations. Free trade promotes global economic growth, creates jobs, makes companies more competitive and lowers prices for consumers. Competition between countries is supposed to drive prices down. It also provides poor countries, through infusions of foreign capital and technology, with the chance to develop economically, creates the conditions in which democracy and respect for human rights may flourish. Labour can move from country to country to market the skills. Globalisation has made tourism a popular global leisure activity. The World Health Organisation (WHO) estimates that up to 500,000 people are in flight at any given time. Modern aviation has made it possible to travel long distances quickly. According to the United Nations Educational, Scientific and Cultural Organisation (UNESCO) in its 2014 World Conference on Higher Education report, over 3.5 million students were studying outside their home country.
But globalisation has not been good for working people and has led to the continuing deindustrialisation. For billions of the world's people, business-driven globalisation means uprooting old ways of life and threatening livelihoods and cultures. The global social justice movement, itself a product of globalisation, proposes an alternative path, more responsive to public needs.
The general complaint about globalisation is that it has made the rich richer while making the non-rich poorer. Globalisation is supposed to be about free trade where all barriers are eliminated but there are still many barriers. For instance 161 countries have value added taxes (VATs) on imports which are as high as 21.6 per cent in Europe. Large multi-national corporations have the ability to exploit tax havens in other countries to avoid paying taxes. Those corporations are accused of social injustice, unfair working conditions as well as lack of concern for environment, mismanagement of natural resources and ecological damage. Multinational corporations, which were previously restricted to commercial activities, are increasingly influencing political decisions. Globalisation has led to exploitation of labour. There is also an increase in human trafficking. Globalisation is an economic tsunami that is sweeping the planet. We can not stop it but there are many things we can do to slow it down and make it more equitable.
Globalisation presents opportunities as well as challenges for Bangladesh. What is clear is that missed opportunities in an age of globalisation could be costly. The Bangladesh economy is more integrated with the global market today than ever before. This is largely due to the rapid growth in trade, massive migration of labour and remittance inflows, liberalisation of foreign exchange rules, financial sector reforms, and creation of a favorable FDI regime. Having embraced globalisation, Bangladesh should have the right policy framework and infrastructure in place to seize opportunities coming its way and to address challenges. Besides strengthening our balance of payments position, remittance inflows have brought significant impact on poverty reduction. Remittance inflows in the financial year 2014-15 stood at $15.32 billion and were about 11 per cent of GDP. Sustaining the growth of remittance inflows could be a major source of external finance in the march towards the country's middle income aspiration by 2021. Strategic actions required to ensure continued flow of remittances should include: (a) close monitoring and supervision of the activities and practices of recruitment agencies, (b) moving to technology-based system of effective practices of remitting money, (c) training workers in the vocations and skills that have a high future demand in global markets, and (d) making the policy of overseas employment more comprehensive so that it covers multiple aspects of migration, including workers' and employers' documentation, employment contracts, their implementation and settlement of workers' welfare.
Bangladesh's progress is a picture of solid achievements with some disappointments.
Over the past 40 years since independence, Bangladesh has increased its real per capita income by more than 130 per cent, reduced poverty by more than half, and is well set to achieve most of the millennium development goals. The economy today is a lot more flexible and resilient, as indicated by the ability to withstand the global financial crisis with minimum adverse effects. Bangladesh is now much more capable of handling natural disasters with minimum loss of life. This remarkable progress was achieved despite numerous internal and external constraints. Yet, after 40 years of independence, the country remains a low-income country, almost one third of the population remains below the poverty line, and some 40 per cent are illiterate. This situation must change for the better. Significant policy reforms and a long-term strategy can make achieving the targets of Vision 2021 possible.
The country's development priorities should include ensuring broad-based growth and reducing poverty; ensuring effective governance and sound institutions but creating a caring society; addressing globalisation and regional cooperation; providing energy security for development and welfare; building a sound infrastructure and managing the urban challenge; mitigating the impacts of climate change; and promoting innovation in a knowledge-based society.
For Bangladesh, the journey to middle-income country and high human development index (HDI) status requires sustained growth and its equitable and inclusive nature. To reach middle income threshold by 2021, industrial expansion must move hand-in-hand with highly productive farm and non-farm agriculture. Furthermore, a strong and competitive manufacturing sector is especially important for generating productive high income jobs.
Economic advancement, accompanied by rapid urbanisation and industrialisation, has taken its toll on Bangladesh's own ecosystem. This is evident from natural calamities, loss of bio-diversity, deforestation, destruction of wetlands and inland fisheries, arsenic contamination in the ground water in the southern part of the country, soil nutrient depletion and inland salinity intrusion in the South West region, and creeping desertification in the Northern region. In urban areas, air pollution, sound pollution and waste load from industries, hospitals, and municipalities are a matter of great concern. To protect Bangladesh from unpleasant effects of climate change and global warming we shall have to take all necessary steps.
 Finally, to find the right balance between benefits and costs associated with globalisation, we need to understand how it works and select proper policies accordingly. Moreover, democracy in its fullest sense can help us utilise the opportunities offered by globalisation, restore hope and lead Bangladesh to the prosperity it has always yearned for.                      
The writers are students of MDS Programme, University of Dhaka. [email protected]