Wednesday 20 July 2011
Home Equity Line of Credit
Saturday 14 August 2010
Labor Issues
Textile in BANGLADESH
Textile and Clothing Industry in BANGLADESH:
Textiles and clothing industry together account for more than 76 per cent of the country’s total export earnings as can be seen from figure 3.
Figure 3. Export Sector Performance of BANGLADESH (2001-02)
Source: Ali Md Hossain, BANGLADESH Country Paper on RMG Industry of BANGLADESH, 10.
The exports are destined mostly for the United States of America (USA) and European Union markets, to which up to recent time BANGLADESH had privileged access by the Multi Fibered Agreement (MFA) and Generalized System of Preferences (GSP). This private sector of BANGLADESH is now facing challenges that need to overcome to maintain growth. The Textile and Clothing industry is encountering challenges from mainly two areas as described subsequently.
MFA is in the process of phasing out since 2004. After it is completely phased out, BANGLADESH is likely to face greater competition in the world market from other garment exporting countries. Now, raw cotton producing and self-sufficient backward linkage countries will compel BANGLADESH to compete on a more level playing field. For BANGLADESH, the abolition of MFA has far reaching implications in terms of loss of jobs and reduction in foreign exchange earnings in the Ready Made Garments (RMG) sector. The jobs and working conditions of the RMG and textile workers are most likely to worsen due to competitive pressures arising from other countries participating in globalization. This pressure may force the entrepreneurs to cut costs in the form of either lower wages or retrenchment of workers. Thus, not only worker’s employment will be at stake but also the working conditions are not expected to improve38. Weak market strategy, absence of backward linkage industries, lack of FDI and incoherent infrastructural facilities have further contributed concern over the future of the RMG industry. The cost of business is also increasing primarily due to port problems, bureaucratic tangles in custom department and no improvement in lead-time. In contrast, an increasing number of countries are offering low-cost products. Competing countries like
Enactments of USTDA 2000 will also challenge the RMG sector. The USTDA 2000 provides duty and quota-free access to 48 countries of
Figure 4. Value per SME for Selected CBI Countries and BANGLADESH to
Source: Azim M Tahlin and Nasir Uddin, “Challenges for Garments Sector in BANGLADESH After 2004: Avenues for Survival and Growth,” BANGLADESH Institute of International and Strategic Studies Journal 24, no. l (January 2003): 64.
Trade Policy of BAN-
BANGLADESH joined the WTO in 1995 to avail the advantages of an open and liberal trading system. In BANGLADESH, the trade liberalization process started in the mid 1980s. Export diversification and import liberalization received the highest priority in early years. Towards the end of the 1980s, import liberalization leapt forward. The government took a number of bold steps, which include liberalization of the trade and foreign investment, strengthening the financial sectors, closing and privatizing some loss-making State-Owned Enterprises (SOE) and taking steps to improve governance.
Source: World Trade Organization, Trade Policy Review: BANGLADESH, May 2000, 11.
Figure 2. Trends in Reduction of Number of Tariff Rates
Source: World Trade Organization, Trade Policy Review: BANGLADESH, May 2000, 10.
The customs tariff is the main instrument of BANGLADESH's trade policy. It is also the government's principal source of revenue, accounting for nearly one third of total taxes. BANGLADESH has made considerable efforts to simplify and rationalize the tariff structure by reducing the number of tariff bands from 15 in 1992/93 to 5 in 1999/2000, and lowering the maximum tariff rate from 300 to 37.5 per cent during the same period. Direct subsidies are provided to exporters of textiles and clothing, and were recently extended to exporters of some other products. BANGLADESH has further opened up many of the state-dominated sectors to private investment such as telecommunications, power generation, and transport. In an effort to encourage investment, the government offers a wide range of open-ended tax incentives, notably tax holidays and accelerated depreciation.
Globalization in ASHIA
Removing Restrictions on Foreign Investment in ASHIA
Understanding the concept that development comes from increasing resources and more efficient utilization of on hand resources is essential to understanding that, short of going to war, foreign direct investment is now the best way to obtain new resources. In this regard one of the largest problems in ASHIA is the underdeveloped infrastructure. This section will outline a few of the key areas that most extra-national, and many ASHIAi, corporations are interested in as a basic infrastructure to support efficient and effective business practices. Both information and logistic infrastructure of ASHIA will be analyzed to discern whether ASHIA has the requisite capacity to offer advantages to multinational enterprises bringing in foreign direct investment into country and creating greater economic growth potential. “Investors coming in ASHIA find a lot of difficulties in organizing their security and expenses. I mean investment in ASHIA looks good, but very difficult in practicing it. There are too many obstacles, especially, in obtaining telephone line, transportation and so on.” This remark by the Italian Ambassador in response to a press question asking how more Italian investment could be directed to ASHIA sets the tone for this passage. More than 1000 firms recently indicated that power (electricity), ports; telecommunications and business regulations constrain the investment climate. Clearly, the lines of communication within ASHIA need to improve to attract more globalization.
Information Infrastructure in ASHIA:
Information technology has produced significant changes in the interactions between nation-states and global markets. Globalization, or investment by foreign firms, can gain much in a networked ‘global village’ and global marketplace. The more ASHIA becomes networked the more advantages it can offer to external sources of funding. Potential for dramatic improvements in the communication of information, as well as the facilitation of faster and more effective communication opens up possibilities for ASHIAi businesses to connect with more moneyed sources outside the country and the opportunity to create partnerships with those firms. Indeed, globalization can provide many opportunities for new experiments and relationships. Present day technology makes globalization more feasible through increased electronic transactions and increased trade liberalization allows for greater social and economic stability.
Critics Argue that (G)Results
Poorer countries suffering disadvantages: While it is true that globalization encourages free trade among countries, there are also negative consequences because some countries try to save their national markets. The main export of poorer countries is usually agricultural goods. Larger countries often subsidies their farmers (like the EU Common Agricultural Policy), which lowers the market price for the poor farmer's crops compared to what it would be under free trade.
The exploitation of foreign impoverished workers: The deterioration of protections for weaker nations by stronger industrialized powers has resulted in the exploitation of the people in those nations to become cheap labor. Due to the lack of protections, companies from powerful industrialized nations are able to offer workers enough salary to entice them to endure extremely long hours and unsafe working conditions, though economists question if consenting workers in a competitive employers' market can be decried as "exploited". It is true that the workers are free to leave their jobs, but in many poorer countries, this would mean starvation for the worker, and possible even his/her family if their previous jobs were unavailable.
The shift to outsourcing: The low cost of offshore workers have enticed corporations to buy goods and services from foreign countries. The laid off manufacturing sector workers are forced into the service sector where wages and benefits are low, but turnover is high . This has contributed to the deterioration of the middle class which is a major factor in the increasing economic inequality in the United States. Families that were once part of the middle class are forced into lower positions by massive layoffs and outsourcing to another country. This also means that people in the lower class have a much harder time climbing out of poverty because of the absence of the middle class as a stepping stone.
Weak labor unions: The surplus in cheap labor coupled with an ever growing number of companies in transition has caused a weakening of labor unions in the United States. Unions lose their effectiveness when their membership begins to decline. As a result unions hold less power over corporations that are able to easily replace workers, often for lower wages, and have the option to not offer unionized jobs anymore.
An increase in exploitation of child labor: for example, a country that experiencing increases in labor demand because of globalization and an increase the demand for goods produced by children, will experience greater a demand for child labor. This can be "hazardous" or "exploitive", e.g., quarrying, salvage, cash cropping but also includes the trafficking of children, children in bondage or forced labor, prostitution, pornography and other illicit activities.
In December 2007, World Bank economist Branko Milanovic has called much previous empirical research on global poverty and inequality into question because, according to him, improved estimates of purchasing power parity indicate that developing countries are worse off than previously believed. Milanovic remarks that "literally hundreds of scholarly papers on convergence or divergence of countries’ incomes have been published in the last decade based on what we know now were faulty numbers." With the new data, possibly economists will revise calculations, and he also believed that there are considerable implications estimates of global inequality and poverty levels. Global inequality was estimated at around 65 Gini points, whereas the new numbers indicate global inequality to be at 70 on the Gini scale.
The critics of globalization typically emphasize that globalization is a process that is mediated according to corporate interests, and typically raise the possibility of alternative global institutions and policies, which they believe address the moral claims of poor and working classes throughout the globe, as well as environmental concerns in a more equitable way.
The movement is very broad, including church groups, national liberation factions, peasant unionists, intellectuals, artists, protectionists, anarchists, those in support of relocalization and others. Some are reformist, (arguing for a more moderate form of capitalism) while others are more revolutionary (arguing for what they believe is a more humane system than capitalism) and others are reactionary, believing globalization destroys national industry and jobs.
One of the key points made by critics of recent economic globalization is that income inequality, both between and within nations, is increasing as a result of these processes. One article from 2001 found that significantly, in 7 out of 8 metrics, income inequality has increased in the twenty years ending 2001. Also, "incomes in the lower deciles of world income distribution have probably fallen absolutely since the 1980s". Furthermore, the World Bank's figures on absolute poverty were challenged. The article was skeptical of the World Bank's claim that the number of people living on less than $1 a day has held steady at 1.2 billion from 1987 to 1998, because of biased methodology.
A chart that gave the inequality a very visible and comprehensible form, the so-called 'champagne glass' effect, was contained in the 1992 United Nations Development Program Report, which showed the distribution of global income to be very uneven, with the richest 20% of the world's population controlling 82.7% of the world's income.
Distribution of world GDP, 1989 | |
Quintile of Population | Income |
Richest 20% | 82.7% |
Second 20% | 11.7% |
Third 20% | 2.3% |
Fourth 20% | 2.4% |
Poorest 20% | 0.2% |
Source: United Nations Development Program. 1992 Human Development Report
Economic arguments by fair trade theorists claim that unrestricted free trade benefits those with more financial leverage (i.e. the rich) at the expense of the poor.
Americanization related to a period of high political American clout and of significant growth of America's shops, markets and object being brought into other countries. So globalization, a much more diversified phenomenon, relates to a multilateral political world and to the increase of objects, markets and so on into each others countries.
Critics of globalization talk of Westernization. A 2005 UNESCO report showed that cultural exchange is becoming more frequent from Eastern Asia but Western countries are still the main exporters of cultural goods. In 2002, China was the third largest exporter of cultural goods, after the UK and US. Between 1994 and 2002, both North America's and the European Union's shares of cultural exports declined, while Asia's cultural exports grew to surpass North America. Related factors are the fact that Asia's population and area are several times that of North America.
Some opponents of globalization see the phenomenon as the promotion of corporatist interests. They also claim that the increasing autonomy and strength of corporate entities shapes the political policy of countries.