Globalisation, trade liberalisation and economic growth in asia Should labour and environmental standards be part of the equation? the case of bangladesh

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  • Globalisation, trade liberalisation and economic growth in asia Should labour and environmental standards be part of the equation? the case of bangladesh

In the 1950s and 1960s as globalisation accelerated, the mantra of the developing Asian countries was industrialisation, which was identified with modernisation. The modern state was an industrial state where governments were able to incorporate and transform peasant sectors and contain uneven development.

In the 1950s and 1960s as globalisation accelerated, the mantra of the developing Asian countries was industrialisation, which was identified with modernisation. The modern state was an industrial state where governments were able to incorporate and transform peasant sectors and contain uneven development. Economic integration via export-led growth, it was believed, would create a global economy without the need for large transfers of wealth between the developed and the developing countries. Concurrently, a new form of the international division of labour brought opportunities for export-oriented industrialisation. The Asian countries’ comparative advantage lay in lower labour costs and informal welfare nets and fewer regulations against pollution. They were also expected to benefit from relations with transnational corporations and other sources of direct foreign investment (DFI); gain experience and knowhow; acquire technology and make the transition to newly industrialising economies. Trade policies were viewed as the mechanism for redistributing income, reducing inequality and promoting economic growth.

As the developing countries’ proportion of world population increased and their membership of the United Nations Assembly rose, they succeeded in getting their concern about international trade and investment placed on a permanent agenda. This permanent agenda, managed by the United Nations Conference on Trade and Development (UNCTAD), was later formalised into the North-South dialogue and centres on multilateral trade deliberations.

Trade liberalisation and the increasing interdependence of countries led to trade negotiations between 1967 and 1994. The most recent round, the Uruguay Round, was completed in 1994 and with its successful completion; governments now concentrate on the implementation of the measures that have been adopted. However as the 1990s drew to a close, there was pressure from some quarters for the insertion into multilateral trade agreements of clauses which would allow trade sanctions against countries that do not comply with labour and environmental standards.

The labour standards debate revolves around several issues – child labour; health and safety features of the workplace; working conditions and labour rights. The developed countries’ rationale for including these standards is “to mitigate potentially adverse effects of international market competition”. Developing countries are sceptical of this line of thinking and accuse developed countries of promoting humanitarian concerns when in fact the real motivation for the concern is protection. Given their past colonial histories, developing countries also resent the imposition of rules by developed countries.

The environmental standards debate stems from the fact that freer trade and investment have meant that companies and, therefore production, have been encouraged to locate to countries where environmental protection is the most lax. Again, is the aim to pressure developing countries for tighter standards or to impose protection on the products arriving from the developing countries?

Both these concerns are worthy of attention. But in both cases, the problem is one of protection of labour and the environment per se, not a matter of trade. In fact, the expansion of trade should be seen as the solution because if trade makes countries better off, these countries will want not only their labour to be better off but will also want a cleaner environment as they get wealthier.

This Workshop focuses on issues raised in these debates. The field is vast but the workshop will concentrate on Bangladesh as a case study for the following reasons:

  • The economy has grown by around 5.5% a year for the past five years; the country is self-sufficient in food and has vast yet mostly unexploited natural gas-reserves.
  • According to the World Bank Development Report, it appears that Bangladeshi women as a group have gained “much more from better access to modern sector jobs than from special standards to protect those who already have good employment”. (World Bank 1995 :73)
  • It is the eighth-most-populous country in the world and a third of the workforce is unemployed.

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