Globalization

President of Institute of

Chartered Accountants of Bangladesh

Distinguished Guests

Ladies and Gentlemen

I am indeed honoured and pleased to be with you this evening in this inaugural session of the seminar on “Globalization : Threat or Promise for Bangladesh?” During the past three decades a remarkable globalization has taken place in the world economy. All the countries of the world, whether big or small, have been affected by this process of globalization. Some of the impacts of globalization have decidedly been positive. However, some specific aspects of globalization have also raised very genuine concerns. I commend the organizers for selecting globalization as the theme of this seminar which would enable a dispassionate and objective discussions on globalization, especially whether increasing globalization pose threat to Bangladesh or also offers opportunities.

We firmly believe that globalization has a major role to play and opportunity to offer to us in terms of increasing trade opportunities and prospect for flow of capital into Bangladesh. As the recent economic trends have confirmed increasing globalization has led to greater specialization, greater mobility of capital and technical know-how as well as significant increasing global trade flow. Production processes have also undergone radical transformation and these are not confined to one country or one area. Major economic actors in the world economic scene have not only dispersed their production bases in different parts of the world but have also increasingly resorted to outsourcing major components and raw materials needed in their production plants.

All these changes have opened up new opportunities for countries like Bangladesh. The increasing integration of national economies into global markets, if properly carried out, certainly promises to alter dramatically the volume and character of our gains from international trade and resources flow into our economy. Besides, the increasing size, competitiveness and diffusion of financial markets have the potential to draw economies of countries like Bangladesh into the global economic mainstream if we can create the necessary conditions and also fully exploit our comparative advantage in specific areas. The phenomenal success of the RMG sector of Bangladesh is a case in point. The right international enabling environment and our own initiatives have helped us achieve this success.

Our Government is determined to fully seize the opportunities provided by globalization. We have thus initiated a comprehensive policy package to implement an export-led growth strategy for Bangladesh. We have not only liberalized our trade regime, which is by far the most liberal in South Asia, it is at the same time one of the most open one. We have been systematically trying to increase our exports. In the context of WTO negotiation it has been our consistent and constant effort to support all moves to liberalize trade. We would continue to support further liberalization of the world trade.

Our support for trade liberalization notwithstanding, we remain deeply worried about certain aspects of globalization. One major feature of recent trends in international trade has been that the benefits from globalization have not been shared evenly. While some countries have benefited from it most others have found it extremely difficult to fully benefit from the increasing flow of two way trade due to globalization. It is disconcerting that, in the process of increasing globalization, the interest of the Least Developed Countries have largely been by-passed. Thus, while in most of these countries conscious efforts are being made to open up their national markets, their access to global markets remains problematic due to a variety of reasons. Although there has been some positive movements towards granting duty and quota free access to the products of Least Developed Countries in specific regional economic blocks or developed countries the LDC exports still encounter formidable barriers including qualitative restrictions and very stringent rules of origin requirements. The real interest paid by these group of countries on borrowed resources from international market also remains disproportionately high compared to those of their industrialized counterparts. This is a major concern for all of us.

The international community has a major responsibility to address our very genuine concerns in these areas both in the context of the WTO negotiations as well as in the context of efforts to make globalization work for all. I need not also mention how important it is to forge global consensus on special measures to safeguard the interests of countries like Bangladesh on issues with relating to intellectual property rights, investment and other standards being evolved specific aspects of trade in goods and services. I would here like to mention another aspect of globalization which, if not adequately addressed, may pose long-term problems. In this age of increasing globalization and increasing mobility in the capital market, money and capital can now be instantly transmitted from one corner of the earth to another. This has created increasing risk of financial market instability. This poses a major challenge as countries like Bangladesh depend heavily on external resources for their growth and development. One should not also forget that low income countries with limited technological endowments find it extremely difficult to access global market. Some concrete initiatives are in order to address both these challenges.

There is also need to see what additional measures are necessary over and above what we ourselves are doing to make our investment regimes liberal