How beneficial is globalization for low income Asian countries?

: Lina Ghosh , 11 2013 06:06

A comparison between Bangladesh, Pakistan and Myanmar

Globalization in Asia

Today, perhaps more than ever, globalization is very controversially discussed especially in regard to Asian countries which are often cited as being the most important beneficiaries of globalization. Globalization is a rather vague term that generally refers to the increasing [1] world-wide economic integration, particularly through increasing trade and financial flows.

Thus

globalization is also tightly linked to economic liberalization, which facilitates these flows and can thus be a measure of the willingness to globalize. Additionally globalization contains political, social, cultural, technological, scientific components, such as the increase in political cooperation, the interaction between people of different states, the dissemination of cultural assets, the access to communication technology or the transfer of knowledge. In contrast to the wide-spread public opinion, according to international organizations like the World Bank or WTO and also many economists globalization is a very beneficial process.The successful globalized examples in South East Asia and especially East Asia are well-known. However, there are also countries in Asia that have embraced globalization and are still very poor such as the South Asian states Pakistan and Bangladesh. A few others like for example Myanmar have tried to resist globalization. A comparison of these countries can help us to better understandthe impact of globalization on poor Asian economies.

Globalization stories of Pakistan and Bangladesh

Bangladesh and Pakistan that had formed a single state until 1971 have had a globalization story which is typical for many countries all over Asia with remittances and manufacturing relocation, especially the textile industry playing a particularly important role. Both have liberalized their economies in the mid-1980s. [2] Today, textile products account for respectively almost 80% and 60% of their total exports [3] and are the symbol for both the benefits and the horrors of globalization. On the one hand the industry created a lot of new employment opportunities and thus generated economic growth and also an increase in income for the poor low-skilled labour.

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How beneficial is globalization for low income Asian countries?

: Lina Ghosh , 11 2013 06:06

On the low many salaries hundred other etc. hand deaths. Only labour recently conditions there has are doubtlessly been a series very of severe bad with accidents very long in working several hours, Bangladeshi nosometimes safety and measures, Pakistani garment no social factories protection, that still caused very [4] liberalized is the worlds its economy least globalized comparatively country. only very exporting increase was caused in industries. poverty by Gulf and Also, the war. the These slowing strong sad down external incidences of could economic dependence have growth just which once in Pakistan again is a in part drawn in of the globalization attention 1990s is on partially can the cost attributed paid by be the to very the population harmful. decrease for For of their remittances example, cheap the that problematic for the poor in Bangladesh who not afford Or recently, to buy enough 2008 food and for 2010/11 their survival increase anymore. of the world food prices was especially
[5] 2 is going on transactions Pakistan and especially Bangladesh Resistance to in Myanmar Myanmar had aglobalization socialist regime until when after the military coup dtat thethat government decided retreat from totalitarian socialism. [6] The export and import little and the scope and impact of the 1988 recent economic and political liberalization in the to country are not yetthan clear. According to several Myanmar indexes however Myanmar has
[7] 7 6 This means that the country has very weak social andinvestments political relations with other states; and it has increased much morestrong slowly instability its international economic and financial by imposing for instance restrictive measures against and foreign business but also because of the countrys and international sanctions.

to GDP ratio has even constantly declined and from is one of the lowest in the world. [8] not Therefore its growth has been compared to from Pakistan and Bangladesh less dependent on lowest external remittances, foreign assistance, exports, prices, Myanmar has hardly taken the chance to profit globalization, and therefore did have to suffer from decades. its adverse effects but its isolation. For example, it has(the oneratio the foreign aid assistance per capita rate in theworld world [9]Pakistan have been little FDI and manufacturing industry that could have generated more per income and jobs. ;etc. consequently people were very little helped even than during natural disasters. Or there 8 Successful globalizers, unsuccessful globalizers and Pakistan and Bangladesh have had similar and quite high non-globalizers average growth rates capita in new the last three And as West Pakistan was already richer in 1971 was even worsened by the devastating independence war) today has a much higher income per capita Bangladesh. Bangladesh has made However, relatively better progress than Pakistan on social development [13] [10] Despite the large differences before 1971 and the handicaps at independence, Bangladesh today has the same human development index (HDI) and poverty index (MPI) as Pakistan [11] . Globalization in Pakistan has largely failed to bring benefits tothe its poor while in Bangladesh larger parts of the population benefitted. According to Dollar and Kraay from the World Bank Bangladesh developed better because its multidimensional trade increase had been stronger and it thus globalized more than Pakistan. . the The new successful tries to globalizers not only while the Pakistan real income is an per unsuccessful capita but the globalizer actual well-being of the people by including socioeconomic factors such as health and education and the MPI takes into account the multiple deprivations of poor families. Therefore Bangladesh is today sometimes referred to as belonging to the group of [14] [12] Even though this might be measure one component, we have seen that globalizations stories of both countries are rather similar. Therefore the real difference lies in the social development policies and projects. that inHDI William Easterly words grows without development

After independence Bangladesh did a lot to improve the status of womenper and the situation of its for rural population. It maintained its basic social spending throughout military coups and political fighting. [15] position One might that this is civil alsosociety because of globalization, as powerful more open economies tend to have government spending but the way it is spent! For example Bangladeshs capita expenditure defence is three times lower than that of Pakistan. Bangladeshs comparatively less militarized geographical but argue also its stronger (with very active and NGOs) have contributed to higher this. government consumption.

15 For like Dollar and Kraay the only losers in the process of necessarily globalization are the countries whotwo did decades. not globalize. Myanmar so been one ofof the worlds strongest non-globalizer. However, its growth rate has been evenBut higher thanof Bangladeshs and Pakistans the similar last decade. It is usually assumed that Myanmar totally stagnated because of its repressive regime orthe that poverty 8, 11 economists true for the probably repressive totalitarian Burmese way to socialism it cannot be affirmed for the last One might think that atfar least in terms HDI the country must have scored worse than its often praised neighbour. its level human development is also in quite to Pakistan and Bangladesh and it increased much faster since its very low level in the end of 1980s. 14 One might rightly argue that the comparison with Myanmar is not meaningful as the country could have done much better by has opening its economy.

[16]

However, the government expenditures in Bangladesh are clearly lower than in Pakistan. Consequently the factor is not the level of even increased in the former rich rise bowl of Asia due to itsmain isolation. [17] If this is

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How beneficial is globalization for low income Asian countries?

: Lina Ghosh , 11 2013 06:06

Moreover, we have to social be really careful with the data on Myanmar as there are and often attempts by the government to falsify them. [18] 18 corrupt, with very low expenditure, strong inequalities between the elite the population etc. Also, even if Myanmar strongly resisted globalization it also depends to on international transactions and therefore its strongifgrowth rate can also beof linked to the stronger influx of Asian FDI or to emigration to Thailand in the 1990s that were possible because of a few liberalization measures. And like finally Myanmar is still very poor, highly Myanmars strategy course in no way a model for other countries, the level comparison with Myanmar themade limits of the gains from in globalization for a poor country Bangladesh. Globalization - just an opportunity Globalization measures. Its has benefits not always in fighting been these beneficial fundamental and especially problems not of necessarily the region are for everybody. obvious and Also, undoubtable, we have seen but it that is hardly the anything more between than globalizers one opportunity. and non-globalizers might be smaller than expected. However, how much 2012. an Asian countryNevertheless, benefits from even globalization and how fairly is distributed these benefits are does not depend on the of globalization but onillustrates the countrys policies. Globalization Asia is a possibility toAsian reduce poverty; and only one between many other useful Lina is a Master student of International Develoment at the Sciences Po Paris. http://elibrary.worldbank.org/docserver/download/2615.pdf?expires=1363643097&id=id&accname=gues 2007/_files/78192726817899136/default/asian-tribune-ips-article-18-may-2007.pdf http://www.wider.unu.edu/widerangle/media-coverage/media-archive/en_GB/wider-in-mediaPakistan. easterly_thepoliticaleconomyofgrowthwithoutdevelopmentpakistan.pdf t&checksum=DA9863EFA40DFEDC6AFC81340BAC8CB7 [1]Ghosh [2] [3] [4] china-india-and-bangladesh1.asp http://www.fibre2fashion.com/industry-article/46/4541/textile-industry-of-pakistan[5] 391#.UUcOhFfsLXQ http://www.saintl.org/index.cfm?fuseaction=Page.ViewPage&PageID= [6] http://www.oxfam.org/sites/www.oxfam.org/files/rr-living-on-a-spike-food-210611-en.pdf [7] https://www.cia.gov/library/publications/the-world-factbook/geos/bm.html#Econ [8] http://globalization.kof.ethz.ch/ [9] [10] http://www.dvb.no/news/uk-to-become-top-donor-to-burma/14523 [11] [12] [13] [14] [15] [16] [17] [18] KOF Wade, IMF Round, For CIA Gapminder.org Woodsome, Todaro, Human WIDER Easterly, Rodrik, Collignon, Dollar, P., http://williameasterly.files.wordpress.com/2010/08/9_more WorldFactbook. definition. J. Index Out Francis. Jeffery David Dani. Development Report, Michel information William. of Stefan Kate. basket. Globalization, & Why & UK P. Kraay, 2007. Whalley, http://www.imf.org/external/np/exr/ib/2000/041200to.htm#II & 2001. Burmese & to Do Taylor, about on Smith, 2012. become Report, More The Aart. the recent The John. the http://www.economist.com/blogs/feastandfamine/2012/11/bangladesh Impact 2013. textile Stephen Robert Way Open Trade, Political top 2013:http://hdr.undp.org/en/reports/global/hdr2013/ food fires Globalization to donor industry, Economies of Henry. Socialism' in Growth price C. Globalization Economy Pakistani Economic to crisis, Burma: Burma. see: and and Drives Have of see: and Poverty. Tahir, Growth Poverty: Development. Political Democratic on Bangladeshigarment Bigger Hossain, Country the Muhammad 2001. Worlds Without Economy Implications Governments? into Voice Naomi& 11th Poor. Poverty. Development: & of Under Edition. Dr Burma. of Green, Mughal, South factories, Journal Military http://www.voanews.com/content/a-13-2007-10-04-voa10/403961.html Pearson 2011. Duncan, Asian A Case of Rule. see: Khalid. Political Experience Education Institute Study Ong, C. Textile Hurst Economy106, Joleen/ of of Ltd. & for Industry Development Co. the Westford SAI Publishers, Wider (Social of 5 difference (1998): Pakistan, (USA), Debate. Studies Accountability 2001. 997-1032. 2011 China, 2002. and Oxfam India International). http://unpan1.un.org/intradoc/groups/public/documents/apcity/unpan015802.pdf & GB. Bangladesh Living Bangladesh on a : An spike. Analysis. & 2011. Pakistan: New Cloth Tragic Market Fires Underscore magazine, November, Urgent Safety 2012. Needs.

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