IRLW 1241 (5th Batch)

Assignment

On

“Impact of globalization on the workers right situation in Bangladesh”

Name: Md. Hajrat Ali

Student ID: SMP-I05402

Session: 2021-22

Course Teacher

Mostafiz Ahmed, Associate Professor

Department of Social Work

Jagannath University
Globalisation refers to the inter-connectedness of the world’s economies and cultures brought
about by new technologies and free trade. Globalization has been increased flow of goods,
services, capital, people, and ideas across international boundaries—has brought many changes in
its wake. Accordingly, globalization can mainly be of three varieties - economic, cultural, and
technological. It has revolutionized the way our economies operate. A huge part of any economy
is the employed workforce. We will aim to understand the exact manner in which globalization
affects employment. The employment sector of Bangladesh is simply a collection of the entire
labour force, including workers in different sectors.

Workers are engaged in main three economic sectors in Bangladesh-

1. Agriculture sector which includes crops, forestry, livestock (poultry, diary, fish) etc.
2. Manufacturing sector which includes readymade garments, electronics, steel, plastics,
glass, pharmaceuticals etc
3. Service sector which includes banking, transport, education, tourism, retail shop, medical,
clinic, automobiles servicing centre etc

The contribution of the three sectors- agriculture, industry and services sums up the Gross
Domestic Product (GDP) of economy of Bangladesh. With the change in economic structure the
dominance of agriculture loses its importance while industrial sector gets more significance and
service sector emerges with significant contribution to the GDP as well as a number of jobs share
in Bangladesh.

Agriculture sector added the value (annual % growth) in Bangladesh was reported at 3.1746 % in
2021, according to the World Bank collection of development indicators, compiled from officially
recognized sources. Bangladesh - Agriculture, value added (annual % growth) - actual values,
historical data, forecasts and projections were sourced from the World Bank on March of 2023.
Annual growth rate for agricultural, forestry, and fishing value added based on constant local
currency. Aggregates are based on constant 2015 prices, expressed in U.S. dollars. Agriculture
corresponds to ISIC divisions 01-03 and includes forestry, hunting, and fishing, as well as
cultivation of crops and livestock production. Value added is the net output of a sector after adding
up all outputs and subtracting intermediate inputs. It is calculated without making deductions for
depreciation of fabricated assets or depletion and degradation of natural resources.

The impact of globalization has brought massive positive changes on manufacturing sector in
Bangladesh. Bangladesh manufacturing output for 2021 was $88.40B, a 14.77% increase from
2020. It was $77.02B in 2020, a 3.39% increase from 2019. $74.49B in 2019, a 11.42%
increase from 2018 and $66.85B in 2018, a 13.37% increase from 2017. The sector, specially
RMG contributes to the Bangladesh economy in a distinctive manner.

1. Increasing the number of garments factories: We know that over the couple of decades (last
27 years), the number of garment factory has grown from 384 to over 5600. The factory
growth rate was 3.70% in Fiscal year 2012-2013. The major advantage of RMG sector is
its cheap labour force which provides a competitive advantage over its competitors.
 2. Increasing trend in employment: It clear that in synonymous of factory establishment. In
FY 1984-85 the total employment was 0.12 million which has increased to 4 million in FY
2013-14. The growth rate of worker was 66.67% in FY 1984-85 and shows the positive
trend continuously. It is also mentionable that 90% of the workers are female. This sector
opened up employment opportunities for many more individuals through direct and indirect
economic activities which eventually helps the country’s social development, woman
empowerment and poverty alleviation.
3. Increasing the export earnings: It can be observed that the export is in upward trends which
indicates that the value of export is increasing day by day. Despite the concern and fear of
negative impact on in the aftermath of quota removal, the whole scenario of RMG sector
in Bangladesh appears with positive trends. Bangladesh mainly Journal of Economics and
Sustainable Development www.iiste.org ISSN 2222-1700 (Paper) ISSN 2222-2855
(Online) Vol.5, No.24, 2014 82 exports garment, knit and woven goods including shorts,
trousers, shirts, sweaters, blouses, skirts, tea-shirts, jackets, sports attire and many more
casual and fashion items with the changing times. In FY 1984-85 the value of export was
116.20 million which is continually increases up to FY 2013-14. The value of export was
22170.00 million in FY 2013-14. Despite removing privileged quota system, the number
of RMG industries rose up over the periods. RMG export of Bangladesh was 3.89% of total
export in 1983-84 while in 2013-14 it was about 82%. After quota removal in 2004 average
more than 16% growth were observed from 2004-05 to 2008-09 and during this period
total export growth rate were also more than 15%. There was negative growth rate in 1985-
86, 1990-91 and 2001-02. In 1985-86 and 2001-02 growth rate was negative due to
decrease in RMG export while in 1990-91 negative growth was due to decrease in total
export and this was probably due to severe flood in 1988.
4. Garments industry contribution to different sectors: Growth of RMG sector has spawned a
whole new set of linkage industries and facilitated expansion of many service sector
activities. The RMG industry not only propelled the growth of spinning, weaving, dyeing
and finishing industries, production of accessories and spare parts, but also rendered large
externalities by contributing to other economic activities in such areas as banking,
insurance, real estate, packaging, hotels and tourism, recycling, consumer goods, utility
services and transportation. RMG sector has overwhelmingly high backward linkages. It
has important backward linkage with utilities such as electricity, gas, and machinery and
spare parts supplying. Other advantages of globalization on garment sectors are as follows-
Increase savings, Population Control, Access to large international market, fostering
healthy competition, Increase the flow the inward investment, Invention and innovation,
Increase labour productivity and skill ness, Specialization of product.

The service sector is also known as a tertiary sector which covers area such as retails, education,
health, real estate, bank, hotels, social work, computer services, gas, electricity, water supply,
media, communication and recreation. What is the development of service sector in Bangladesh?
In Bangladesh perspective, the contribution of service sector to the GDP is about 55.89 percent
while the growth of this sector is 11.95 percent holding the position of second fastest growing
employment sector in Bangladesh serving 40 percent of the total employment.

Trade flows lead to shifts in the demand for labour, as more workers are needed in newly profitable
sectors and fewer in unprofitable sectors. If the supply of labour is fixed these demand changes
lead to a rise in wages to more profitable industries. Competition by imports might lower the price
of products by low skilled labour relative to the price of products made by skilled labour, so that
domestic firms shift toward producing skill intensive goods, which will lead to a lower real wage
level for the majority of work force, the unskilled in Bangladesh. Financial liberalization is likely
to result in a fall in the net income received by workers. This is because Bangladesh is lowering
taxes to attract FDI, relatively to high tax rates on labour, as labour is less mobile to resist high
taxes. By applying this discriminatory tax policy against labour, income will be redistributed in
favour of the high-income earners in the society. This negative impact of globalization on wages
is likely to be greater in Bangladesh, which lack strong labour unions and democratic political
systems such as developing countries.

The majority of changes in the employment sector have been brought about by economic and
technological globalisation. Free trade, liberalisation of policies, and new technologies have
brought about substantial modification of the employment sector. Economic globalization affects
the number of jobs that are available in different countries and sectors. The economic growth of
economies has increased consumerism and eventually, demand for products and services. This has
led to an exponential increase in production and job opportunities. This can be seen from the
change in the unemployment rate and the employment-to-population ratio of an economy. The
composition of jobs refers to the division of employment into skilled and unskilled jobs in the
economy. Economic and technological globalization hugely affects the composition of jobs in any
given area. For example, as developing countries try to make their economies more efficient and
technologically advanced, their dependence on unskilled labour may reduce drastically. At the
same time, developed countries have high levels of consumerism and thus high demand. To make
profits, organizations in such countries may try to cut costs to increase profits. They might seek to
do so by employing cheap labour available elsewhere, increasing their need for unskilled labour.

The importance in studying the effects of globalization on the labor market lies in the fact that
earnings from labor represent the main source of income for the great majority of the inhabitants
of developing nations and especially of the poorer groups of workers, who lack ownership of any
other material assets. Wage inequality refers to the extent to which wages are distributed unevenly
among a population. The world today has a wide disparity in wages. An increase in
international trade has the potential to make everyone better off, but if those who gain do not
actually compensate those who lose, the overall effect of welfare is reduced.

-The difference between the earnings of skilled and unskilled labor has been increased
Migration refers to the movement of people from one area of the world to another. Globalization
has caused the reorganization of labor markets, which ultimately has a substantial impact on
migration.

-A great and increasing number of people are moving between countries and continents

Employment relations refer to the complex interrelations between various parties in the field of
employment - employers and employees, labor and trade unions, employer organizations, and the
state. Globalization has had a huge impact on such relations by bringing about a change in how we
perceive employment and the interaction of workers with different agents of society.

Some positive effects are listed as follows-

1. Positive effects can occur as a result of the increased capacity of Bangladesh to create new
opportunities for work and production following the alleviation of price distortions with
respect to both labor and capital. (ESCWA 1999:24).

2. FDI has both direct and indirect effects on employment creation in the recipient countries
like Bangladesh. This depends on the size and type of investment, the type of technology
adopted and the ability of the host country to master the imported technology and adapt it
to its needs.

3. FDI also has indirect effects on employment through the vertical links to the TNCs, and
there may also be spillover effects of TNCs on local science, technology, education and
training.

Some negative effects are listed as follows-

1. Negative effects occur as a result of large-scale technological developments that

accompany this phenomenon, which will reduce the demand on unskilled labour
Even direct foreign investment does not care for cheap workers but only for highly skilled
workers.
2. The traditional nature of ‘work’ might disappear due the rapid advances in technology,
while at the same time creating new and innovative occupations in favour of the highly
specialized professions.
3. An increase in hidden unemployment, a lack of new job openings, and a deterioration of
real wage rates are the consequences of globalization in most developing economies, which
were unable to adapt the new technologies
 4. Moreover, if the labour clause, will be enforced through the WTO, this will have a negative
impact on economic growth and employment in many developing countries, where child
labour exists and where working conditions are miserable (Nassar,2003).
5. Most trade liberalization benefits will be received by the manufacturing-producing
countries, while the smallest share will be going to the agricultural-producing countries
(developing countries).
6. In addition, policies of structural adjustment such as privatization imply an increase in
unemployment since privatization is accompanied usually by a reduction in the demand for
labour.
7. Finally, the theoretical predictions about the employment consequences of trade
liberalization are based on assumptions of full employment of resources and flexible labour
markets. These assumptions, might not hold true in Bangladesh where labour markets are
inflexible due to structural factors.

But globalization & economic development could not develop workers conditions remarkably in
Bangladesh. According to the Global Rights Index 2022 of the International Trade Union
Confederation (ITUC)- Bangladesh is one of the world's 10 worst countries for workers. The
report, published on June 26 and based on a survey on 148 countries, looked at the workers' right
to strike, to establish and join trade unions, arbitrary arrests and the right to justice. Violations are
recorded from April to March each year. The report said workers' rights in Bangladesh continued
to be severely curtailed. In the garment sector, which employs more than 4.5 million workers,
attempts at forming unions were relentlessly obstructed, while strikes were met with extreme
brutality. Industrial police fired live rounds and used batons and tear gas to disperse workers during
strikes. In 2021 alone, at least six workers were shot and killed by the police during strikes while
many others were gravely injured. On June 13 of that year, many garment workers were injured
following a police crackdown on strikes at Lenny Fashions and Lenny Apparels in the Dhaka
export processing zone (DEPZ) in Ashulia. The workers were demanding their wages after the
factory's closure. Over 6,000 workers lost their jobs when Lenny Fashion and Lenny Apparels
closed on January 20, 2021. Management had said it would pay due wages by May, but the
company never fulfilled its commitment, ITUC said. A planned meeting on September 24, 2021,
in Chattogram to form a regional committee of the Industrial Bangladesh Council (IBC) was
stopped following a phone call from the police. On August 6, 2021, the Bangladeshi Industrial
Police filed a criminal case against 25 union leaders and members in relation to incidents at
Crossline Factory (Pvt) Ltd and Crossline Knit Fabrics Ltd. The factory management also filed a
criminal case against its workers for forming two unions. In the garment sector, over 500,000
workers employed in export processing zones (EPZs) were not allowed to form or join unions,
which left them without any power to bargain for better working conditions. ITUC said the
situation worsened with the implementation of the Export Processing Zones Labour Act (ELA)
2019, which states that workers can only be a part of a workers' welfare association where they
may not be given the full scope of collective bargaining. It is strictly prohibited for them to organise
any protest within the EPZ, where demonstrations are often met with violent retaliation from the
authorities, the ITUC report said. According to the index, workers in 113 of the 148 surveyed
countries have been denied the right to form or join trade unions, while 74 percent (of the 148)
have blocked the registration process of unions. In a climate of increasing levels of violence and
attacks on workers, the number of countries which expose workers to physical violence increased
from 45 in 2021 to 50 in 2022. The Asia-Pacific region saw a significant rise in the number of
countries where workers faced violence. The number rose from 35 percent in 2021 to 43 percent
this year.