The Impact of Trade Liberalization on Growth, Unemployment, and Poverty in Bangladesh

Date of Award

Summer 8-2005

Document Type

Thesis

Degree Name

Master of Arts (MA)

Department

Political Science & Geography

Program/Concentration

Graduate Program in International studies

Committee Director

Francis Adams

Committee Member

Larry Filer

Committee Member

Trisha Bezmen

Call Number for Print

Special Collections LD4331.I45 M57 2005

Abstract

Trade liberalization has been one of the major policy components of the governments of the developing countries in the recent decades. Bangladesh as many other developing nations, has adopted different measures of trade reform policies as an element of International Monetary Fund's (IMF) Structural Adjustment Program (SAP), as well as to be an integral part of the world wide trend of globalization. Such policy measures include the reduction/rationalization of tariff rate, simplification of import and export trade procedures, relaxation of restrictive trade policies, and reform of financial and monetary policies. Even though, the trade reform measures were anticipated to increase the country's growth and employment, and help alleviating poverty in long run, the results of such reforms are quite mixed indeed. Within a sh01i period of time, the export oriented garment sector in Bangladesh was able to contribute significantly to Bangladesh's gross domestic product (GDP), foreign exchange earning, and employment. However, some of the import competing industries and the small cottage industries, including the poultry, the salt, and the carton industries are claimed to be affected by the flood of cheaper foreign import particularly resulted by different forms of trade liberalization. It is also recognized that rapid liberalization in Bangladesh's import policy has led to Bangladesh's massive trade deficit with India, and local industries have experienced revenue and employment losses due to the surge of cheaper Indian imports. Another important claim is that the high growth performance of the economy of Bangladesh, as well as the significant progress in poverty reduction in the decades of 1990s, a period which represents heavy liberalization of trade, is not the direct result of reforms in the tradable sectors, as at least two-thirds to three-quarters of the incremental growth in the 1990s are originated from the non-tradable sectors of the economy. Thus, this thesis investigates and analyzes such mixed consequence of trade liberalization in Bangladesh in terms of growth, employment, and poverty.

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DOI

10.25777/jns9-qj77

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