Opportunities Of Globalization For Bangladesh

Opportunities and challenges of Globalization for Bangladesh Mohammad Shamsuddoha Assistant Professor, Department of Marketing University of Chittagong, Chittagong-4331, Bangladesh E-mail: [email protected], [email protected] Hossain Shahid Shohrowardhy Lecturer, Department of Marketing, University of Chittagong, Bangladesh S M Sohrab Uddin Lecturer, Department of Finance & Banking, University of Chittagong, Bangladesh Abstract The essence of economic development is the transfer of technology from the industrially advanced country to the developing world like Bangladesh. It was argued that knowledge is a heritage of humanity. None should block its spread, as it blocks progress and prosperity particularly for the poor of the world. Not much has happened to cheer in this regard. One of the ways the multinational companies exploit the developing countries is by transfer pricing – showing higher invoice prices of raw materials imported from its own plants elsewhere and thus transfer in hard currency its undeclared profit. Another widely used practice was to produce a good number of commodities and sell the substitute competing products of developing countries at a price lower than the cost of production of the latter’s products. Jute and synthetic substitutes were an example of such unwholesome marketing policy. The control and regulation of these multinational companies were urged on the advanced countries for healthy development in trade and investment. For the sake of development of their multinationals, developed countries have introduced Globalization whereas developed country have got the maximum benefit from it. However, after open the its market and globalize his business, Bangladesh may introduced as a beneficiary country or nor. This is why, the researchers tried to focus on secondary writings relating impact of globalization in Bangladesh to find out the real challenges and opportunities for Bangladesh through Globalization in International market. Keyword: Globalization, Challenge, Bangladesh Objectives of the study: The main objective of the researchers is to know about Globalization and find out the potential chances, impacts, and challenges of Globalization for Bangladesh by analyzing theoretical aspect. Scope and Methodology The proposed study would be empirical one. Secondary data has been used in this study. The secondary data have collected from various books; reference Journal, seminar & working papers and local and foreign articles. The research is empirical or observational one. Different graphs, tables are used in this paper for the sake of make understand regarding challenges and threat of globalization for Bangladesh specially. Introduction Globalisation has become a magical slogan these days. Some people have been led to believe that by its magic touch a country can become rich. Incessant propaganda emanating from interested quarters has produced this blinding effect on them. They believe that all you need to do is to fling your country open and by some mysterious process, wealth will flow in. This mystical faith is unaware of the fact that globalisation has always existed since mankind was able to move from shores to shores with the development of navigation and other accompanying technical developments that made long ocean

voyages possible. Globalisation, which is understood with reference to a country’s foreign trade to GDP ratio or by composite criteria of ratios of foreign trade and foreign direct investments to GDP ratios, is said to have certain benefits to the globalising country. Here is a confusion of cause and effect. An analysis of the forces at work does not reveal benefits flowing from the single source of globalisation. As a matter of fact, globalisation appears more an effect rather than the cause of economic growth. At any rate, it has to wait upon the development of those domestic forces, which create the favourable climate for economic growth. It has an accelerating effect on growth at an advanced stage of development. These are well-known forces of good governance, favourable investment climate, development of financial institutions, and the development of physical and social infrastructures. In other words, the country desirous of globalising to a higher level has to develop its own domestic economy to benefit from globalisation. The economic benefits to a country from globalisation may rightly be viewed as economic benefits generated by economic growth primarily with own steam. It has to be self-generating process that links up for global benefits. History says that we had been far behind the modern world during the colonial rule. Both Britain and Pakistan ruled Bangladesh for 200 years and 23 years respectively. They used their power to exploit the Bangladeshi people and there was no democracy or freedom. This kept us separate from the rest of the world and made it impossible for us to become a modern country. "The birth of Bangladesh in 1971 was the first instance of an ethnic linguistic nationalist movement succeeding in creating a new state in the post-colonial period" (Jahan, p12). Independence gave us the opportunity to share knowledge with other nations and led us towards modernity. 1 The new round of globalisation that we are passing through has got to proceed on lines that the developing and industrially advanced countries agreed three decades earlier but could not see much in concrete actions and results. As for Bangladesh, mere slogan and further liberalisation shall be suicidal. What needs to be done is go vigorously for good governance. There is other feasible alternative to taking essential measures to ensure economy, effectiveness and efficiency in the government, improve the investment climate, reform the financial institutions to be investment friendly, provide reliable utility services, social infrastructure in education, health and needed skills and internal security for progress and prosperity. This simple programme should be our first national priority. Nothing else shall work unless the dysfunctional role of the government is corrected soon. Government must respond to the concerns of the people and serve them, as democracy dictates, and the people demand (The Daily Independent, February 31, 2002) 2 . Concept of Globalisation The concept of globalisation is global and dominant in the world today. But, it was not handed down from heaven, it was not decreed by the Pope, it did not emerge spontaneously. The dominant social forces in the world today to serve their specific interests created it. Simultaneously these social forces gave themselves a new ideological name the - “international community” - to go with the idea of globalisation (Madunagu, 1999) 3 . Globalisation...has largely been driven by the interests and needs of the developed world (Grieco and Holmes, 1999) 4 Globalisation has turned the world into the big village... This in turn has led to intense electronic corporate commercial war to get the attention and nod of the customer globally...This war for survival can only get more intense in the new millennium. (Ohuabunwa, 1999) 5 . It is needless to distractedly search for any premise other than the foregoing to commence the analytical examination of the holocaust effects 1

http://www.angeltowns.com/members/belavista/globalization/how_good_is_globalisation.htm, Source: The Daily Star, Dhaka, July 13, 2002. Chowdhury, Mohammad Nurunnabi, The Daily Independent, February 31, 2002)., http://www.angeltowns.com/members/belavista/globalization/globalisation_and_global_truth.htm 3 Madunagu, E (1999) "Globalisation and its victims" Guardian (July 26) P53. 4 Grieco, M. and Holmes, L (1999) "Tele Options for Community Business: an opportunity for economic growth in Africa" Africa Notes (October) pp1-3. 5 Ohuabunwa, Mazi S.I. (1999): the Challenges of Globalisation to the Nigerian Industrial Sector" Nigerian Tribune December 14, PP. 20 - 21. 2

of globalisation particularly as it concerns the African continent. It should be stated, however, that the extent of these effects as well as the coping ability/capacity of its victims are explainable within the context of human history, which, on its own has not been static, and which had continuously evolved with the society itself over the years. In the course of this evolution, various developments and changes had taken place. These changes or developments had, in most cases, affected the systemic existence of humankind per se regardless of the geo-political location within the universe.6 Within the parameters of the foregoing, globalisation could be correctly defined from the institutional perspective as the spread of capitalism (MacEwan, 1990) 7 . However, it is germane to adumbrate that the collapse of the Eastern block in the late 80s and early 90s led to the emergence and ascendancy of a global economy that is primarily structured and governed by the interests of Western behemoth countries, thus, facilitating the integration of most economies into the global capitalist economy. With the demise of the Eastern Europe in the early 90s, capitalism as an economic system now dominates the globe more than it had been at any time in its history. Even, China, by far the largest non-capitalist economy, has undergone dramatic changes in its international economic policy orientation, and, is today the recipient of almost one-half of all foreign direct investments that go into developing nations - this is a country that essentially blocked all foreign investments until the 1980s (United Nations, 1995b) 8 . Globalization is one of the most charged issues of the day. It is everywhere in public discourse – in TV sound bites and slogans on placards, in web sites and learned journals, in parliaments, corporate boardrooms and labour meeting halls. Remarkably, for so widely used a term, there does not appear to be any precise, widely agreed definition. Indeed the breadth of meanings attached to it seems to be increasing rather than narrowing over time, taking on cultural, political and other connotations in addition to the economic. However, the most common or core sense of economic globalization – the aspect this paper concentrates on - surely refers to the observation that in recent years a quickly rising share of economic activity in the world seems to be taking place between people who live in different countries (rather than in the same country). This growth in cross-border economic activities takes various forms: ♦ International Trade ♦ Foreign Direct Investment (FDI) ♦ Capital Market Flows Overall observations about globalization. First, it is crucial in discussing globalization to carefully distinguish between its different forms. Second, the extent to which different countries participate in globalization is also far from uniform. Third, it is important to recognize that economic globalization is not a wholly new trend. (http://www.sdnbd.org) 9 The Social Dimensions of Globalisation: While globalisation has created unprecedented wealth and resources, this has been associated with a stillwidening gap in incomes both inside and between countries and enduring unacceptable levels of absolute poverty. Core labour standards are under attack in many countries, with globalisation tending to undermine national protections of basic workers’ rights or to render them irrelevant. It is unsurprising that as a consequence; there is growing concern worldwide that people and governments are losing control of the processes known as globalisation. There is a lack of legitimacy of the intergovernmental institutions that can only worsen until peoples’ social, developmental and environmental concerns are properly addressed by the multilateral system.

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Martin A. Lee, Globalization And Its Discontents Far Right Backlash Against The European Union, November 27, 2000 in the San Francisco Bay Guardian. 7 MacEwan, A. (1990): "What’s "new" about the ‘New International Economy’, mimeo, University of Massachusetts, Boston. 8 United Nations, 1995b. World Investment Report. Geneva; UNCTAD. 9 http://www.sdnbd.org/sdi/issues/globalization/What%20is%20Globalization.htm

The ratio of average incomes in the world’s twenty richest countries to those of the world’s poorest has risen from a ratio of twenty to one in 1960 to about forty to one nowadays. As the UNDP noted recently, some 66 countries ranging across every corner of the globe are poorer now than a decade ago. Such inequity leads to appalling contrasts. For example, in Europe $50 billion are spent on cigarettes annually. According to United Nations figures, providing all developing countries, for one year, with basic health and education as well as water, sanitation and nutrition, would cost much less than that. More than 10 million children in developing countries still die every year from preventable diseases that their industrialized country counterparts rarely face. And a World Bank study has shown that inequality between people within countries rose for most of the second half of the twentieth century, particularly in the years after 1987. The period of increasing globalization has also been associated with seriously adverse effects of trade liberalization on women. In many developing countries, traditional agricultural products mainly produced by women have been unable to compete with imported goods when trade barriers have been reduced. This has resulted also in decreased food security. And the expansion of export processing zones (EPZs) and clothing, textiles and light manufacturing industries in developing countries over recent decades has generally been based on low-wage female labour working in unacceptably bad conditions and without any protection of their right to organise into trade unions. On average, 80 per cent of the workers in EPZs are women. Their average wage can be half of what men get. Some countries even boast about the fact that they employ women workers in advertising aimed at attracting foreign investment, pointing out that not only are the women cheap, but they are also supposedly more docile and less likely to become trade union activists. Many companies have been only too happy to take advantage. That exploitation of women is but one example of the links we have so often seen between globalisation and the violation of basic workers’ rights over the past twenty years or more. Rather than trade providing increased resources for improving living and working conditions, it has all too often resulted in governments actually reducing workers’ rights in order to minimise labour costs. All the standards included in the ILO Declaration on Fundamental Principles and Rights at Work have been under attack in consequence. The countries worst affected are those developing countries genuinely seeking to protect workers’ human rights and raise basic living standards, for these are the countries most vulnerable at the margin to being forced out of the world market.10 Bangladesh Faces the Challenge of Globalization Bangladesh faces the challenge of achieving accelerated economic growth and alleviating the massive poverty that afflicts nearly two-fifths of its 135 million people. To meet this challenge, market-oriented liberalizing policy reforms were initiated in the mid-1980s and were pursued much more vigorously in the 1990s. These reforms were particularly aimed at moving towards an open economic regime and integrating with the global economy. During the 1990s, notable progress was made in economic performance. Along with maintaining economic stabilization with a significantly reduced and declining dependence on foreign aid, the economy appeared to begin a transition from stabilization to growth. The average annual growth in per capita income had steadily accelerated from about 1.6 per cent per annum in the first half of the 1980s to 3.6 percent by the latter half of the 1990s. This improved performance owed itself both to a slowdown in population growth and a sustained increase in the rate of GDP growth, which 10

http:// www.worldbank.org, Submission by the International Confederation of Free Trade Unions (ICFTU) to the first meeting of the ILO World Commission on the Social Dimensions of Globalisation (Geneva, 25-26 March 2002)

averaged 5.2 percent annually during the second half of the 1990s. During this time, progress in the human development indicators was even more impressive. Bangladesh was in fact among the top performing countries in the 1990s, when measured by its improvement in the Human Development Index (HDI) as estimated by the United Nations Development Project (UNDP). In terms of the increase in the value of HDI between 1990 and 2001, Bangladesh is surpassed only by China and Cape Verde. 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 labour-intensive manufactures. Although Bangladesh still does not rank among the most globally integrated developing economies, the pace of integration has been quite rapid. Until hit by the global recession in 2001, there had been robust and sustained, growth of exports earnings, averaging about 15 percent per year in the 1990s. As a result, the ratio of export earnings to GDP had nearly doubled to about 14 percent by the end of the decade. In 2001-02, however, export earnings declined in US dollar terms for the first time in nearly 15 years. Although there was a recovery in the following year, the medium term outlook indicates that it will be difficult to regain the export momentum of the 1990s. A greater integration with the global economy seems to fit well with the kind of pro-poor growth envisaged by Bangladesh's development efforts. The export-oriented garment industry presently employs around 1.8 million workers - mostly women from low-income, rural backgrounds. The second dominant export-oriented activity, shrimp farming, is also very labour intensive, presently employing nearly half a million rural poor. 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. The relatively strong growth of the Bangladeshi economy in the 1990s was underpinned by the even stronger export growth. Unfortunately, the removal of the Multi-Fibber Arrangements (MFA) quotas now threatens to increase competition in the global garment industry and thus limits 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; excluding the garment industry, the growth of the largescale manufacturing industries was a meagre 4 percent annually in the 1990s. That may partly reflect the overall poor investment climate, but also partly the effect of increased competition from imports on industries catering to the domestic market. In such a situation, the desirability of further import liberalization may be put to question. Since the country depends heavily on imported raw materials, machinery and components, cutting back on imports would hurt prospects for creating jobs by adversely affecting production and investment activities. 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 to satisfy the so-called "rules of origin" in getting preferential access for its exports in the markets of the developed countries. Thus, most of Bangladesh's garment exports are not eligible for the tariff concessions given under the Generalized System of Preferences (GSP) in the EU market. This problem has not received adequate attention, since the other major players in textile trade among developing countries are hardly affected by it. Bangladesh can hopefully benefit from the European Union's decision to allow duty-free import of "everything but arms" from the LDCs, and it would like to see the replication of such trade concessions in other industrialized countries. Unfortunately, the same rules of origin as under GSP apply here as well. The 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 labour standards. Anti-dumping actions are already under way against exports from Bangladesh, and they are an important latent threat when the MFA is dismantled. The tough sanitary and phytosanitary regulations of the developed countries are also an impediment for diversifying into agro-processed export items for Bangladesh and other countries that lack product standards and certification facilities. Another issue of great importance to Bangladesh is that the free movement of temporary workers across borders be expanded, for workers' remittances play an important role in its economy. Indeed, a redeeming feature in the face of the export slowdown in Bangladesh is the continued increase in the inflow of migrant workers' remittances, which grew from about 2.5 percent of GDP in the beginning of the 1990s to above 5 percent in 2001-02 (amounting to about US$2.5 billion). Migrant workers are mostly unskilled or semi-skilled, and most of them come from poor rural families, making their remitted savings an important means for their families to escape poverty. There is, however, considerable uncertainty about the continuation of these remittance inflows, which depend on the economic fortunes of the host countries and their changing policies and attitudes towards guest workers. Most of Bangladesh's temporary migrant workers are in the Middle East, but increasingly they are going to more diverse destinations in East Asia and Europe, though often illegally. In the wake of the 2001 global recession, Bangladesh's reliance on foreign countries as a market for exports and as a source of remittances has become obvious. If Bangladesh is to become less vulnerable to the economic fortunes of others, it will need to strengthen its domestic economy, creating jobs and markets at home. A strong domestic sector and an improved overall investment environment will provide a more stable source of income - like what the garment industry has provided so far - and will rekindle and sustain Bangladesh's economic growth. (http://www.globalenvision.org/library/3/558/).11 Threats of Globalization World Bank has presented the new world development report [1900/2000] under the title “Entering the 21st century” and governments escape responsibility if they change every few years and blame their predecessors. The World Bank lists six major issues of the 21st century: ♦ Poverty ♦ Population growth ♦ Food security ♦ Water scarcity ♦ Climate change ♦ Cultural preservation. Among the “many powerful forces, both glacial and fast-paced, which are reshaping the development landscape”, five are emphasized: ♦ Innovations in technology ♦ The spread of information and knowledge ♦ The ageing of populations ♦ The financial interconnectedness of the world ♦ The rising demand for political and human rights. It is also very challenging to cope up with below ingredients for country like Bangla desh. ♦ Globalization ♦ Trade in goods and services 11

http://www.globalenvision.org/library/3/558/

♦ ♦ ♦ ♦ ♦ ♦

International flows of capital Global environmental issues (climate, biodiversity) Localization Decentralisation of political power to sub national levels of government Movement of population and economic energy towards urban areas Provision of essential public services in these growing cities (Source: http://www.sai.uni-heidelberg.de/abt/intwep/zingel/golden99.htm Globalization also poses tensions and dilemmas to countries integrated to the world economy. One tension of globalization associated with the fact that in a more interdependent and inter-linked world economy any adverse global or regional shock, for example the Asian and Russian crisis of 1997-98, is rapidly propagated to other economies. The propagation (contagion) mechanisms at work can be a decline in the import volumes and/or changes in the real price of commodities (oil, copper, timber, etc). Economies that depend heavily on a few main commodities as their main source of export earnings and fiscal revenues can be hit hard by these shocks. This has been the case of Mexico, Indonesia, Ecuador, Venezuela and Russia with the drop in oil prices, and Chile with the decline in copper prices, to give some examples. Another transmission mechanism is asset markets. Highly integrated financial markets tend to transmit global, regional or local shocks much more rapidly than in past decades when financial markets were less integrated. Portfolio shifts affect exchange rates, interest rates and economic activity. As the volumes of financial intermediation and currency transactions are enormous nowadays, shocks can be greatly amplified in more or less synchronized fashion with destabilizing effects on many economies. This source of financial volatility was largely absent in the world of the 1950s, 1960s and early 1970s when multilateral lending, aid and foreign direct investment dominated global capital movements. There is ample empirical evidence showing that uncertainty and volatility penalize capital formation (and productivity growth) with adverse effects on economic growth. Thus instability and volatility can be ultimately viewed as a tax on growth and prosperity. In many instances, this instability originates from abroad. However, the quality of the domestic policy response in the face of adverse external shocks matters. The nature and timing of the domestic policy response can soften or increase the impact of these shocks. Another tension of globalization lies in its social effects. As globalization is often associated with increased instability of output and employment, this affects, among other things, job security. As labor income is the main source of earnings for the majority of population under capitalism, job insecurity is socially disruptive and brings tensions to the fabric of society. In addition, flexibility in labor markets required to compete, successfully, in international markets, tends to erode long term work and personal relationships between firms and employees, workers and managers that traditionally give a sense of security to people. Another open discussion is whether foreign trade and globalization narrow or widen income disparities. Traditional trade theory suggesting factor price equalization across countries seem of little relevance in a world of large per capita income differentials (e. g. between say Sub-Saharan Africa and the OECD); moreover, convergence in income levels (per person) is, at least, very weak across regions and nations. In addition, globalization gives a premium to people with sophisticated skills, high levels of education, and entrepreneurial traits. These are people better equipped to survive and succeed in the more competitive world brought about by globalization. The mirror image of this is that unskilled labor; uneducated workers and marginalized population are likely to benefit less in a more competitive world economy. Thus income and wealth inequality can be amplified, underscoring the need for public policy to correct these inegalitarian trends. Another critique of globalization is that it tends to transmit the cultural patterns of large countries to the rest of the world through imitation of consumption patterns, global mass

media and other means of influence. This trend would, eventually, lead to homogenization of values, thereby reducing cultural diversity and national identities.12 Recommendations for Bangladesh to cope up with Globalization Countries facing the many policy questions raised by the integration of financial markets are likely to look at past experiences for guidance. It is therefore natural to provide an initial characterization of the present process in terms of similarities or differences with past phenomena of financial integration and regulatory harmonization. Looking back at the past fifty years the question then becomes: how much and where has the process changed in the last two decades with respect to the previous ones? For this purpose we shall consider three constants in the regulatory process: its interaction with other components of the legal and regulatory framework; the nature of the rule -setting institution; the level of cogency of the rules. Looking at the dynamic of the regulatory process, we shall consider what sequence of regulatory events (trade versus financial integration), of the rule-setting institutions (political versus technical authorities) and of rules (binding versus indicative) best characterizes the present evolution of financial regulation. 13 Government Induced Regulatory Convergence. Capital controls largely insulated national economies for the period between 1970 to 1990 and the early 1980s reflecting the lack of interest in the process of financial integration and the ease of controlling capital flows, compared to today. In the few cases where integration among different financial systems was actively pursued it was largely the result of political decision. Recent historical experience shows that in three clearly defined sets of circumstances, government induced integration has been significant and there are lessons to be learnt. Market Tempted Regulatory Convergence. All regulatory convergence must start with the market(s), but markets themselves are institutions that represent a shared set of rules, the very existence of which rests on some initial agreement or shared regulatory principles. There is therefore a more intimate relationship between private forces and the rulemaking process than is frequently perceived. Private contracts have almost invariably shaped the initial development of most financial institutions up to the point where the emergence of externalities of some sort has required the intervention of the public regulator. Notwithstanding the emphasis that the analysis of regulatory convergence in financial, and in particular, capital markets, has put on formal regulation, the role of private legal rules as a factor of regulatory convergence remains of primary relevance. The new consensus on minimum standards and codes.

As we have seen, government induced regulatory convergence has led to different forms and models of regulatory harmonization. In a few but significant areas of the world it has made possible the establishment of monetary unions, as in the case of Western European, Eastern Caribbean and African Franc Zone countries. In other regions, the gravitational pull of one or more large and successful countries acted as a catalyst, favoring a process of regulatory alignment. The experiences in these regions have shown that invoking instead principles of the minimum harmonization whereby a political authority imposes common rules across jurisdictions – can reduce the difficulties of a “top-down” harmonization -. It is difficult to overestimate the importance of the minimum harmonization principle for the process of global financial integration for Bangladesh. 12

Solimano Andrés, 1999, “Globalization and national development at the end of the 20th century: tensions and challenges” presented at the International Summit ‘Globalization and Problems of Development’ held in Havana, Cuba on January 18-22, 1999 and the UNDP Conference on Human Development held in Cartagena, Colombia on March 10, 1999. 13 Chen, Xin and Giovanni Majnoni, (2002), “What Are Basel Core Principles Meant to Signal: An Empirical Analysis”, mimeo.

The complementarily issue The process of transformation of consensus views into national laws (the complementarity between “soft” and “hard” law) is particularly complex at the international level. Consistency of interpretation of the standards and codes across jurisdictions with different cultural and legal backgrounds cannot be taken for granted; this has been the main difficulty with the application of the subsidiary principle in the European Union. In addition, compliance with different standards and codes is purely voluntary. These factors have led to attributing responsibilities in the dissemination and monitoring of codes and standards to institutions which represent a large number of national jurisdictions and with a mandate to promote conditions for economic stability and development internationally such as the IMF, the World Bank and other regional development banks (the IFIs). Observers of the process claim that the dissemination activity performed, by and large, although not exclusively, by the IFIs has triggered substantial national legislative and regulatory activity (Kim, 2001). The fair representation issue The “fair representation” issue is a general feature of “soft laws” but it may present particular characteristics at the international level. Soft laws, as an expression of conventions, not laws, often materialize in the form of “understandings” or guidelines. Soft laws represent the consensus within a certain social or professional group of individuals and therefore cannot be expected to fully address the issues and problems that Concluding Remarks This paper reviews opportunities opened by globalization to developing countries like Bangladesh but also identifies the dilemmas and tensions it poses. The main opportunities of globalization for Bangladesh lie in the potential for wealth-creation through export led growth and the benefits of expanded international trade of goods, services, access to new technologies, ideas, institutional designs in the global market place. However, globalization brings along also serious problems and tensions that need to be managed in appropriate ways. Global business cycles give rise to considerable macroeconomic volatility at the national level. Of course, volatility has been observed for a long while in developing countries but has become more acute in late 20th century globalization. In particular, the scope and strictness of the crisis of the 1990s, say in Mexico (1994-95), Asia (1997), Russia (1998), Brazil (1999) is evidence that we are facing severe financial vulnerability. This is a very serious problem of globalization as highly integrated financial markets transmit, very quickly, across countries, financial shocks and change in confidence levels that affect exchange rates interest rates, asset prices and ultimately output and employment with adverse social effects. The effects of globalization on income distribution and social differentiation is another area of policy concern, as globalization along with technological progress might exacerbate instability of employment and, eventually, widen income disparities both within and across countries. More dramatically, the severe macro/financial crisis of the era of globalization often lead to increases in poverty and social tensions that can be politically destabilizing. This paper also discusses the challenges for Bangladesh of coping with globalization. Nowadays, these institutions have to deal with large scale volatility associated with globalization, their resources are strained by the size of the rescue packages and the problems of stabilization are more complex due to the financial and social ramifications of the crisis. In addition, new complex themes have creped their agendas such as anticorruption, good governance and transparency. Finally, a theme that deserves further attention is the need to strike a proper balance between global, regional and national institutional responses to the challenges posed by globalization. Finally, Bangladesh has lot of potentials to enter in abroad country through his established products like Garments, Leather, Tea, Vegetable, Firm products, shrimp, and salt water species by using the benefits of Globalization concept in worldwide.

Tables and Graphs Table 1: Overall Ranking of Bangladesh

Source: http://foreignpolicy.com/issue_marapr_2004/countrydetail.php? Country=Bangladesh Graph 1. Employment in Export Processing Zones

Graph 2. Wage Growth by Country Groups

Source: Oostendorp and Rama (2001). Countries are classified as non-globalizes, rich or globalizes as in Dollar and Kraay (2001). Wage data for the 1980s are from period 1983-1989, whereas wage data for the 1990s are for 1990- 1998.

Graph 3: Does Globalization Adversely Affect Population and Poverty?

Fig. _ Age Structure: Developed and Developing Countries

Figure 4: ... while inequality within many countries with a large number of poor has increased

Graph 5: Lack of openness increases inequality between countries

Graph 6: The gap between the richest and poorest countries has increased…