INTRODUCTION OF GLOBALIZATION

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 considerable 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 long-term process of change. It has economic, political and cultural dimensions, all of which can have a social impact. The different dimensions of the process are interrelated and mutually reinforcing. There are, undoubtedly, significant potential benefits of globalization. Openness to foreign direct investment can contribute to growth by stimulating domestic investment, improving efficiency and productivity, or by increasing the knowledge applied to production. Increased access to the domestic financial system by foreign banks may raise the efficiency of the banking process thereby lowering the cost of investment and raising growth rates. Trade openness may facilitate the acquisition of new inputs, less expensive or higher-quality intermediate goods and improved technologies that enhance the overall productivity of the economy.

Conversely, the process of globalization entails significant risks and potentially large economic and social challenges, particularly to the developing countries. Openness to global capital markets has brought greater volatility in domestic financial markets, particularly in countries whose financial systems were weak to begin with and whose economic policies lacked credibility. Similarly trade liberalization has led in some countries to reduced demand for unskilled labour, lower real wages, job losses and income declines which have often resulted in higher poverty rates. As a result, there have been growing concerns about the negative effects of globalization, and an increasingly polarized debate on the plight of the worlds poorest.

It is very clear that the phenomenon of globalization has come to stay. In fact, globalization has been described as a fast moving train that waits for nobody.1 Intended passengers either jump onto it or risk of being left behind. Like every journey, every passenger must be prepared to board at the right station, with the necessary kits and with a clear knowledge or vision of his destination. There are obvious indications that Bangladesh is ill prepared to start this journey and cope with the developments. Apart from the fact that most developing countries lack the basic infrastructure to embark on industrialization drives, the inability to make sound economic policies, unpredictability of changes in laws and pervasive corruption are critical obstacles to development. 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.