Opportunities of Globalization in Private Sector

Bangladesh has a low human capital stock and is relatively closed to the global economy even by standard of the other low-income countries. Therefore, Bangladesh has not yet fully become part of the global economy. This is as truer in trade as in technology achievements. Globalize offers the potential to free Bangladesh and other developing countries from the restrictions imposed by a relatively small domestic market, low saving and limited access to world technology and credit (S. R. Osmani, 2005).

Opportunity to break the vicious circle:-

It offers an opportunity to break the vicious circle of savings and investments, a long-standing important challenge for all developing countries. Better education, training, technology, equipment and infrastructure in general raise living standard. Due to globalization, foreign investment in our country will increase. If we can properly utilize it then employment will increased which will raise the income of people of Bangladesh. So, if there is a high rate of income then savings of people will increased which will enable us to break the vicious circle.

Alternative source of domestic investment finance:-

Globalization offers an alternative source of domestic investment finance. Such financing is channeled through direct investment and frequently come with attached benefits, such as technology transfer, training, marketing networks and managerial and technical expertise. Foreign investment is especially attractive when it brings its own physical capital and the means to enhance human capital of domestic citizens.

Internet and Telecommunication in Bangladesh:-

As we know that internet is directly depend on the telecommunication infrastructure of the country. According to the report (Hossain, 2000) Bangladesh telecommunication sector as poor level of penetration, high cost of access and lengthy waiting period. But there is good news as well. Bangladesh telecommunication regulatory commission (BTRC) has decided to launch Third Generation (3G) mobile phone operator in this year. At the same time WiMax is ready to start its activities(BILS Study Report 2007).

Ericsson Bangladesh ltd, a telecommunication vendor introduced 3G network technology at the first time in Bangladesh.

Experts argue that 2100 MHZ spectrum of 3G would enable Bangladeshi operators to launch mobile broadband service. Through this customer can get easy and reliable access to internet (BILS Study Report 2007).

The GSM (Global System of Mobile communication) signal covers 95% of Bangladesh area. But the mobile broadband marker remains untouched. If the mobile broad band can be provided at affordable prices, the number of subscribers will reach from 70 million by 2011(Tauhid, 2008).

E-Business in Bangladesh:-

Private sector is recognized as the lead in e-business success in Bangladesh. The e-travel scheme became popular in Bangladesh. The micro-SMEs secure 90% of enterprises. Medium businesses are those that have less than 5 employees and are a leading target for e-commerce knowledge development. Most of them are active in handicraft exporting and information

consolidations/vendors. Infrastructure issues such as telephone line penetration and online payment systems need to be developed in order to boost sector growth.

ICT Penetration in Businesses Sector:-

There is tremendous growth of Internet users in Bangladesh within last couple of years. Lots of B2C sites and portals, most them run by SMEs, are operating in domestic market and also in the international market. The financial sector of Bangladesh is dominated by the banking system. Due to the short of data, we have concentrated on the ICT penetration in the banking sector. Research show that number of Branches Linked within branches 3% 1% 76% and number of Branches Linked with other branches 0.86% 22% 76% (Source: Raihan, 2001)

Increased competitiveness and raise export potentials:-

Product market competition induced by government policy of economic liberalization can bring about increased competitiveness and raise export potentials. The competition can be enhanced by reductions in transport and communication costs of conducting international trade, by removal of external tariff barriers, and by more vigorous application of pro-competitive policies in those domestic industries not exposed to international competition (BILS Study Report 2006).

Competition is healthy for the economy in the long run. It not only influences the relative bargaining power of firms and workers but it is also a force for renewal and change.

Actions of Employers to reap the opportunities of Globalization:-

Volatility in the labour market has prompted employers in Bangladesh to become more organized and to move towards greater unity. There is a tendency among the employers to shift

certain risks and responsibilities away from the enterprise or society to the workers. Employers have tended to introduce new labour-saving technologies to reduce cost of production and to avoid the risk of labour unrest ( M. Hoqe,2007). Unlike in the public sector, employers in the private sector have resorted to growing casualisation of workers resulting in the deprivation of workers of provident fund, gratuity, normal working days and hours, group insurance, leave encashment, leave with pay and pension benefits and, above all, job security.

Actions of Trade Unions to reap the opportunities of Globalization:-

Economic integration and increasing competition erode the bargaining power of trade unions. However, the increasing mobility of goods and capital allows such obstacles to be readily circumvented, thereby prompting the trade union movement to adopt a global approach (Hye Mondal, Abdul, 2004). Globalization has also created opportunities for trade unions by offering organized labour the alternative of collaborating with employers to enhance productivity, adaptability and product or service quality, in exchange for job security and higher wages.

Some other Opportunities of Globalization:-

Globalization has also created some new scope and opportunity for the development. Following may be considered as opportunities:

Bangladesh is being integrated with global economy and business. Expanded private sector employment opportunity with poor labor rights. Increasing competitiveness and efficiency Emergence of new sectors of production and employment according to the global need, such as ternary, footwear, pharmaceuticals, RMG, etc.

Competitiveness of Bangladesh is increasingly being based not on low wages or natural resources but on knowledge /innovation, skills and productivity.

Labor export to external market increased. As more countries are participating in trade, finance and production, Bangladesh is being integrated globally to a greater extent than before.

In Bangladesh, where labor rights have been restricted, democratization and pressure for improved labor rights are taking place (e.g. in the EPZs).

Greater liberalization and deregulation, for example, of trade (e.g. increasing customs duty concessions or exemptions), finance (e.g. increasing number of private banks) and labor markets (e.g. declining public sector employment).

Competition for investment and markets (e.g. attracting more FDI and exploring new markets).

Privatization of SOEs, especially jute and cotton textiles, the largest industries in Bangladesh, involving job losses and the pressing need for social safety nets.

Increased economic interdependence compared to other developing nations. Bangladesh is being linked to both developed and developing countries more closely through economic institutions, international agreements or treaties.

Increase in foreign capital, information and technology flows. Bangladesh is facing competition from increased internationalization of foreign enterprises, mergers and alliances.

Bangladesh is experiencing customer-driven (rather than product-driven) global and local markets, though at the same time segmented markets.

Competitiveness of Bangladesh is increasingly being based not on low wages or natural resources but on knowledge/innovation, skills and productivity.

Potential to boost productivity and living standards across the globe, because a globally integrated economy can lead to a better division of labour between countries, allowing low-wage countries like Bangladesh to specialize in labour-intensive tasks while highwage countries use workers in more productive ways thus allowing global firms to exploit bigger economies of scale.

Merit of compelling inefficient economies to institute reforms as a precondition to effective participation in the world economy.

Openness to trade that brings benefits to consumers in all parts of the world allowing for wide choice of goods and services not available hitherto, at much cheaper prices than in a closed economy.

Capacity to compel transparency not only on the part of Government, but also in the management of private sector institutions.

Advantage to create enormous opportunities for enhancing economic growth, diffusing technology and improving living standards

Provision of an impetus for the diffusion of ideas and values (such as democracy, and human rights) through (ICT).

Conclusion and Recommendation

The impact of globalization on the economy of Bangladesh is mixed with marginal positive outcome overshadowed by vast negative results. Globalization provides many opportunities for development for Bangladesh and its people, including the potential to improve wages and living standards. It has challenged many economic strategies of the past as the way towards development. It provides an impetus and incentive to develop human resources and to improve productivity as key factors of competitiveness and improved living standards. Globalization has made Bangladesh conscious of the need to improve productivity. Even unions in Bangladesh have come to acknowledge the importance of productivity enhancement to the standards of living of their own members (S. R. Osmani, 2005).

Trade liberalization and privatization has created social insecurity in terms of loss of jobs and aggravating unemployment and underemployment in the country pointing to the need for social protection to contain insecurity of the workers. Voice of the common workers, collective awareness and participatory management of trade unions at various levels are the three main processes for the improvement of trade union governance. The existing practice of centralized governance of trade unions has largely contributed to the major failures in the labour processes in Bangladesh (Hye Mondal, Abdul, 2004).

Competitive labor market is expected to link wages with productivity. In the case of SOEs, real wage growth outpacing productivity growth is a factor raising unit labor costs and reducing international competitiveness calling for adjustment of real wages in line with productivity growth.