ies, and the juickly, hops, ting of ona ent there places of tions. reign tration, ent and recast by per cent idustry with the e growth Service sector: economic activity that does not produce goods but provides services, including services to companies such as marketing, advertising, banking or services to individuals such aslelsure, tourism, financial or transport services Offshore outsourcing: the practice cof hiring an external organisation topperform some business unctions in acountry other than the one where the products or services are developed or manufactured Bh inks You can see the full list of India’s advantages at: www blestplia/ indiaglance_ advantages htm Then you navigate from here to see the specific advantages of Karnataka state in general and of Bangalore in particular, BB id you know? laos fitinthe wld tas E fit rcaltistienespacel andsils avaliable ang business erveermer Ths srevesied AT Kenney’ 2007 lables ee TAT. Keay is orf the worlds leading nancial corsltancy fees) Spee shardlpd/GSU 2007p The globalisation of services BB Case study India There are those who think that the modern Indian service sector is based on call centres. In fact, the Indian service sector and its involvement in offshore outsourcing is huge, and call centres are only a tiny part of a rapidly growing industry. cation of firms involved in th transnational service sector. One website, published by STPI, an organisation funded by the Indian government, lists 26 ‘competi advantages’. Some of these are technical, financial and legal point include: India has many advant: the second-largest English-speaking human resource in the world investment-friendly and supportive government policie adaptability to new technologies a world-class infrastructure in line with the developed countries for power, transport and data communication the world’s third-largest brain bank, ith around 2.5 million technical professionals a stable democratic environment with over 50 years of independence a large market size with a middle-class population of 250-350 million, with increasing purchasing power reflected by a huge increase in the purchase of consumer durables in recent years special investment and tax incentives given for exports in certain sectors such as electronics, telecom, software, and research and development activities legal protection for intellectual property rights, The site then goes on to explain why Karnataka state and its capital city of Bangalore developed into India’s leading centre for ICT, and why this centre has become so dominant in the world’s offshore outsourcing of ICT-linked services. Some of the advantages for the area are as follows: The state was the first in India to set up engineering col It was also the first to set up a technology university It introduced a statewide policy to promote the IT industry with grants and tax incentives, In 1991 it established a software technology park in Bangalore which now covers 140,000m¢, It now has six further around 560,000 m' nology parks with a total area of It has the best telecom infrastructure in the countryIn 2008 there are plans to build a new Gi friendly building design and construe investments from Saudi Arabia) a. NanoPark for research into nanotec dealing with matter on a molecular si [1 billionth of a metre) a biotech park for research into new 1 plant technology. Infosys ~ a Bangalore-based TNC Infosys, with its headquarters in B: software companies in India From the Infosys website: il a (GALES rt rsey sas Pt Ye ve technology servi y headquart India. tis incia's largest IT compani 008. ithas nine red 2007-2008 its reve eded ‘capitalisation of over US$30 bili. 1 14-year period from 19 eased three thousandtol e company has paid out | inosye | the dv Infosys Technologies Limited is a multinational informatio lion, with a market -nvironmentally tion {t0 be DUE Using medical, veterinary ang s one of the largest in Be with over 94,979 development 3 the fiscal yes the issue price of an 3d. This is excluding his duratior Infosys was founded in 1981 and moved to Bangalore in 1983, In 1987 it got its first foreign client, Data Basics Corporation nthe US. Then, in 1992, it opened ies first overseas sales office, in Boston, US. This was followed by offices in Milton Keynes (199), ‘Toronto (1997}, France and Hong Kong (2000) UAE and Argentina 2001}, Netherland Singapore and Sweden 2002), and so on,y ‘using ology wary and gest nded ved 1983. 8 frst Data hen, in its fest ffce, in 1996) France (2000), tin ands, weden Now it is a truly transnational corporation, operating in most of the world’s leading industrial countries and with wholly owned subsidiary companies in many countries, Still, about 45 per cent of the company’s workiorce is based in Bangalore, and well over half are in India ‘There is a clear awareness that India's labour cost advantages might be only temporary as other developing countries try to move in to the same market area, s0 Infosys is developing more sophisticated aspects of the industry to add greater value in the lace of possible low-cost competition. It has developed business units to provide a full range of ICT services in industries such as banking and capital markets communications media and en tainment acrospace and avionics ‘energy, utilities and services insurance, health care and life sciences manufacturing retail, consumer product goods and logistics The company is also heavily involved in education, both of it workforce and of its potential workforce and customers through a variety of initiatives to support university and school education in Bangalore and the rest of Karnataka, The International Technology Park - Bangalore A large part of the Infosys Bangalore operation is based at this park. ‘The company that owns and manage: it lke this: GEIR) Fe 5 Hy Banna Aw ron HD ‘The international Tech Park Bangalore ((TPB) is the icon of India’s IT success story, and continues its contribution to the development (of Whitefield as @ major IT hub in India’s Silicon Valley. Located Just 18 km from the city centre, ITPE catalysed the growth of a burgeoning suburban city at Whitefield Managed by Ascendas, ITPB epitomises the finest of the Ascendas ‘Advantage offering: Quality Business Space, Reliable Solutions and an International Business Lifestyle second to none. Its world ‘lass business infrastructure amidst wide green spaces provides the optimal environment for TNCs and leading local corporations located at the Park Enjoy hassle-free éet-up at ITPB. Simply plug-and-play in a ‘complete office space, ITPB's professional in-house property ‘management team ensures your business continuity round:-the- clock with efficient services and infrastructure such as security and fire protection systems, seamless telecommunication networks, optical fire connectivity and a dedicated power plant. ALITPB, all your business and employee needs are taken care of These include comprehensive lifestyle amenities, regular shuttle bus services covering more than 80 routes, ample parking and all the conveniences you need in India’s most complete workve-play business space. Globalisation of services BB icyou know? (One ofthe guiding principles of Infosys’ Global Delivery Model is'to combine the best ofthe local world with the best of the global world’ The company provides services to eal with consulting enterprise solutions infrastructure management product engineering services systems integration While these may involve some low. level, call-centre jobs, they also provide a fll service to design and manage the software, hardware and personnel at both ends ofthe chain ~in the client country and in Bangalore itselfChapter 5 Development and globalisation Mis For more details of ITPB go to: www. intltechpark com ‘A promotional video forthe park can be found at: www.intitechpark.com/ videos/ITPB_high html For a different, and slightly Iasprofesionl we ate on par gota wnyotibe com watehtvauthuatehUPe a ‘The park contains six major office blocks supported by a dedicateg power plant (20MW}, an in-house dedicated telephone exchange system of 3,000 lines with capacity to expand by another 10,009 lines, full high-speed Wi-Fi connectivity, parking, water storage and sewage treatment facilities. Round-the-clock, state-of-the ary security is provided along with climate contro, ventilation and fg protection. Activities From your study of Bangalore and other parts of your A Level course to date, consider 1 How is Bangalore similar to and/or different from major cities that yoy have studied in countries at a higher level of economic development? Hows infosys similar to and/or different from TNCs that you have studied that are based in countries ata higher level of economic development? How might Bangalore, Karnataka state and infosys develop in the next 25 years or so? Justify your suggestions, referring to other case studies and theories that you have studied ‘The BRIMC countries and others might soon become major world economies. Most NICs have a number of factors in common, such as a well-educated core workforce and a large internal market, How well do india, Karriataka and Balngalore fit these criteria for development?>, ce sca Global social and economic groupings ge 0,000 rage he-art and fire inthis section you will learn: ‘We live in an increasingly globalised world where information, trade, y Z capital and people can move more and more easily across fronticrs. the importance of groupings However, at the same time that globalisation is taking place, other of nations. groupings of nations are forming, Some of these aim to improve trade Setween member states, or to negotiate trade advantages for members, sseto while others have far larger aims ~ with some working to a very high Tevel of social and economic integration between members. Most global that you groupings are designed to help their members to achieve economic and ee social development by have making trade between members flow more easily, increasing profits i allowing freer movement of people, bringing advantages of a more flexible labour market the next 2 studied sharing knowledge to allow growth in all members, ete In this section three groupings will be considered. These are’ J the World Trade Organization (WTO} hasa the Group of 77 and China the EU. . . You can find out more about some other world groupings by going to the etl BBC website, which describes: the Asia/Pacific Economic Cooperation group {APEC} the Cairns Group of agricultural exporting nations BB inks the BU ‘guide to world trade blocs can be the G20 group of rapidly industrialising nations, set up to challenge news.bbc.co.uk the power of the EU and the US at the WTO talks the North American Free Trade Association (NAFTA| The World Trade Organization ‘The WTO can be described as a liberalising organisation, set up by the ajor capitalist, market-oriented economies to organise world trade trade between members to Tt aims to reduce barriers to trae, allow increase. The organisation describes its aims below Sn Hey eens Pw re Essentially, the WTO isa place where member governments go, to sort out the trade problems they face with each other. The first step is to talk The WTO was born out of negotiations, and everything the WTO does the result of negotiations. The bulk of the WTO's current work ‘comes from the 1986-94 negotiations called the Uruguay ound and tealier negotiations under the General Agreement on Tariffs and Trade (GATT). The WTO is currently the host to new negotiations. under the ‘Doha Development Agenda’ launched in 2001 \Where countries have faced trade barriers and wanted them lowered, the negotiations have helped to liberalize trade. But the WTO is not just about iberalizing trade, and in some circumstances its rules support maintaining trade barriers -for example to protect consumers or prevent the spread of disease. english/thewto_e/whatis ti e/factl_ehtmChapter 5 Dev [GERD Fe co psy soma rw wn At its heart are the WTO agreements, negotiated and signed by the bulk of the world’ trading nations. These documents provide the {ground-rules for international commerce. They are essentially contracts, binding governments to keep their trade policies within agreed limits, Although negotiated and signed by governments, the goal i to hel producers of goods and services, exporters, and importers conduct theit business, while allowing governments to meet social and environmental objectives, The system's overriding purpose is to help trade flow as freely as possible - so long as there are no undesirable side-effects - because this is important for economic development and well-being. That partly means removing obstacles, It also means ensuring that individuals, ‘companies and governments know what the trade rules are around the world, and giving them the confidence that there will be no stidden changes of policy. Hi Niember counties of WTO , UB Despite the good intentions of the WTO, it is clearly a divided organisation. Many developing countries fel that, in its early years, it dominated by the developed countries, particularly the US and the That is why the G20 was set up, with the object of arguing together EU. in the interests of the poorer countries The ‘Group of 77’ developing countries and China The Group of 77 was set up at the UN to represent the interests of the poorest countries. China has always been an important ally of this group although not a formal member. Of cours ome interests if ‘common with the 77 nations, but it also hopes to increase its influence in world affairs by this alliance. On its website the Group defines its aims They The obieg shat othe sing ofa crea ente Mor the) fant ae Pub The citi inte Agr pol ens red EU Th In ma be int SiGlobal social and economic groupings ae 3] the key feature of UF work ths year willbe the need to build bridges So ne legal Ake) the iss facing vs ~on development and poverty reduction, ontracts, » nicable diseases, peace building, human rights, the environment. iit, omg crime terorism ~ae areas in which the whole word has help org mon intrest. All Member States be they North or South large, mental metateralism. We have to prove that together'fs better and more fective than’alone partly yi) The European Union rhe EU was frst set up in 1956 with six member states and was known und TH cnelux (named after Belgium, the Netherlands and Luxembourg, the sudden satel members). Expansion since then has produced a current total of 27 _ ores, with a number of others a varios stages of negotiations to join = The sites mentioned in the Link give details ofthe EU's growth, rhe EU was fist set up after the Second World Way, when its main co further war became impossible. Since then it has developed many __ An animated map of he growth of other key policies including the following: the EU can be found at: le movers The ciiinal core obfedve ofthe BU was the evelopmene _ ‘wopaeulebchvsry/erimeted Ainvsingle market between its member states. This involves the free... +» "APymwexeniin Greulation of goods, capital, people and services within the EU and the The following st ives a timeline: seation of customs tnion with a common external tarif on all goods news bb.couk/Vhi/wortd/ entering the market europe/3583801 stm Monetary union: On 1 January 1999 the euro was launched by 11 of the 15 member states of the EU. The Eurozone has since grown to 15 countries, the most recent being Cyprus and Malta which joined om 1 january 2008, All other BU member states, except Denmark and the UK zie legally bound t join the euro wihen the economic conditions are met. w?. Public opinion in these countries is, however often against joining The euro is designed co help build a single market by easing travel of citizens and goods and eliminating exchange rate problems, Hes also intended as a political symbol of integration and as a stimulus for more. Agriculture: The Common Agricultural Policy (CAP) is one of the oldest J policies of the EU and was one of is eore aims. It has the objectives of increasing agriculaural production, providing certainty in food supplies “ ensuring a high quality of life for farmers, stabilising markets and ensuring reasonable prices for consumers. I¢ accounts for around 35 per cent of the | b0's annual bude ats it The CAP's price eontigls and market interventions led to considerable and the overproduction, result in so-called butter mountains and wine lakes, together In oder to dispose of surplus stores, these were often sold on the world market at prices considerably below their cost of production; the system has bien criticised for undereutting farmers in the developing world, and also Gn environmental grounds in that it encourages environmentally unfriendly China intensive farming methods of Since the beginning of the 1990s the CAP has been subject to a series ofthis of reforms to make it more responsive to market demands and le crests in environmentally damaging, fluence its aims:rT Chapter 5 Development and globalisation Infrastructure: The EU is working to improve eos-border | infastuotre, or example though the Tans-Etepean Networks (Tap TEN projects include the Channel Tunnel, and i estimated that by 2OL0 ue network wil cover 73,300 km of roads; 78,000 kan o leg and many airports and harbours. The eastwards expansion ofthe EU ey inereased the demand for new infrastructure Regional development: There are a number of funds to support development of underdeveloped regions of the EU. Such regions are mani located in the new member states of eastern Europe. Thes. funds provide support for eandiate members to tansform their cotnty to conform to the EU's standard, For instance, Poland has benefited fron Bi structural fund investment to help move from a state-controlled There a economy towards greater market orientation TNCs BB inks onomy 8 particu ee nfrastructure funds to improve the road system, particularly its links a er Sere Rees to its EU neighbouts, including Germany Ga sincet joined the EU, see Chapter & CAP funding for the development of its agriculture (es movement ofits people (although only Irland, Sweden and the ™ BB Activities Uk allowed this at first for work and training toland Tl readaliheinformationon Ate tage ints elution the Integrated Mediterranean an py ream Programme was api designed to modernise farming n member Thendsaustheentetto en nodenfation of thr Paco, neuding meanisation which the EU hashelped to: irrigation, and creation of industrial and service,jobs in rural areas integrate European The programme was responsible for much development of rural arcas in economies spain, Portugal, Ialy and Greece ou develop the economiesof ‘The European Development Fund (EDF): This fund directs aid from Europe and other countries the EU to developing countries, In the period 2008-13 i is expected to Nota aa ee alae oer 10bilon eros of ai, malt former colonies of th EU oa ensure food security in a Europe Environment: The EU's environmental policy addresses issties such a5 in our protect the environment acid rain, the thinning ofthe ozone layer, air quality, noise pollution send waste and water pollution rong make Europe a more ing Sarr vas 1.2007, member states agreed that the BU is to use 20 per cent Seene peaceful place than twas ewable energy inthe future and that it has to reduce carbon dioxide Jove inthe 1athandeary 20th Grnisions in 2020 by at least 20 per cent compared to 1990 levels been : is considered to be one of the most ambitious moves of an important count EB We reference toatteast industrialised region to fight global warming, Renewable energy isa inter Ea papresianicn priority in transnational research actvitics supported by the EU reg explain how such groupings The EU's attempts to cut its carbon footprint have also been aided by ah start have assed the members expansion of Europe’ forests whieh, between 1990 and 2005, grew 10) sid | ithe poupstodevelopthelt _geraont in western Ewjope and 15 percent in eastern Europe, During economies. ‘% this period they soaked up 126 million metric tonnes of carbon dioxie, ay eaivalent to 11 percent of EU emissions fom human activities ee face busi | 20d | tired thei ioe busion Bh inks There are also many references to TNCs in AQAAS Geography. Of porcilar importance are nk the world rade in food, pp205-6 TNCs and the ot trade, pp245-6 {especialy Table 76 on p246) TINGS ond heath are, pp270-6. polonds development andthe role SFTNCS and FDI ae also disused in some detain Chapter Bo this book BB Did you know? Not all multinationals are large Enabled by internet-based communication tools, a new breed of ‘multinational companies is growing in numbers, These multinationals start operating in different countries from the very early stages and are being called micro-multinationals. Some of them, particularly software evelopment companies, have been hiring employees in multiple countries from the beginning of the internet era, But more and more rmicro-multiationals are actively starting to market their products and | services in various countries. internet | tools such as Google, Yahoo!, MSN, | eBay, Skype and Amazon make ‘easier for the micro-multinationals to reach potential customers in other countries, Facebook is a perfect example. It started out asa ‘dispersed viral business with employees, cients and resources located in various countries. its rapid growth is a direct result of being able to use the internet, cheap telephony and (ow travel costs to create a unique business opportunity. TNCs, globalisation and development ‘Transactional corporations (TNCs) are an important area of study. Because of their size TNCs can have a powerful influence on both local economies and international relations, TNCs have played, and are continuing to play, an important role in globalisation, TNCs to locate to other countries There are many reasons f One reason is to trade tariffs. For example, the decision made by Nissan to produce cars in Sunderland was almost certainly to gain the EU marker without having to pay tariffs, (Other TNCs may be seeking the lowest cost location for their production facilities (such as the location of Nike sportswe safacturing in Vietnam) or be attracted by an abundance of skilled p labour {and this inchides Infosys and its corporate partners setting up in Bangalore ~ see pp188-90}, Others might want to reach foreign markets more effectively; for example Marks & Spences, McDonald's, Tesco and BAT [see AQA AS Geography, pp273-6). These overseas developments do not just increase sales but they can also help to reduce the unit costs of each item produced or sold worldwide. , Of course, other TNCs ate forced to develop operations overseas in order to exploit mineral and other resources found in those countries. The oil TNCs are examples of this. (See AQA AS Geography, pp245-6), Problems and benefits of TNCs ein relation to the income of the countries in wikich, they are located, This means that it can be hard for governments to enforce national laws on TNCs, Generally speaking, governments want investment from the TNCs because they generate jobs and incomes, train local workers in new, transferable skills and bring new technology The taxes that TNCs pay can be an important stimuhis to economic development. Many TNCs are la [As for the TNCs themselves, the prospects of cheap labous, cheap land, ap and abundant resources and a ‘good business environment’ are big attractions. (Note: ‘good business environment’ is a euphemism that can be used in some TNCs to mean a Jow level of trade union activity and/or ‘weak anti-pollution legislation.) In fact, TNCs and the foreign direct investment |FDI) that they can bring have become so important to many economies, both rich and poor, that countries must compete against one another for their investment. Countries and regions sometimes offer incentives such as tax breaks, 's of governmental assistance or improved infrastructure to attract TNCs, When this happens in an extreme form it can be characterised as ‘a race to the bottom’, or a competition to attract investment by offering ceven lower wage rates and even less strict controls than other low-wage! low-regulation economies, pled However, some geographers and economists argue that TNC: in a ‘race to the top’. While multinationals certainly regard a Tow tax and/ or low labour costs as an advantage, there is little evidence to sugge that major TNCs deliberately seek lax environmental regulatios labour standards. In fact, TINC profits are tied to operational efficiency, which includes a high degree of standardisation across the company’sChapter 5 Development and globalisation BB inks ‘To read the whole of Palmisano's antcle goto: wwrwribm.com ibm/governmentalprograms samforeignatfais pdf Read about globally integrated enterprises. ls Then reread the section on Infosys on pp188-90 To what extent does Infosys appear to be a globally integrated enterprise? Ei 1Wcs ares big and powerful that they obviously have a huge eect on all countries wiere they ae located. Summarise these effects by constructing tablet show the positive and negative effects oF TNCs onthe socal economic and environmental geography ofboth the host Country and te country of corgi (where relevant) Palmisano’ article is a detailed the history and present form of many TNCs. You might try to readit if you ate aiming fora top grade in geography, if you are planning to study geography at University, ori you are also studying discussion nomics or politics. f you are just hoping to get 2 grade Dor Eyou would be better advised to work on yur more basic studies rather than visting this site! different operations, TNCs are therefore likely to keep to similar standards across the countries in which they operate. This can mean ¢hay standards rise towards those that have to be met in the best regulated As for labour costs, while TNCs clearly pay workers in, say, Vietnam, mu tess than they would in the Uk or the US, iis also the ease that they tend to pay wages between 10 and 100 per cent higher than local rates, Finally, t has been suggested that TNCs behave itresponsibly, shifting investment from place to place in search of ever ower costs. However, the costs of establishing plant, training workers, ete. can be very high; so most TNCs research their location decisions very carefully and, once they have located, they are likely to remain committed to that location for as ong as possible. Indeed, TNCs can be vulnerable to predatory practices from the host countries ~ such as expropriation, sudden contract renegotiation, the arbicrary withdrawal of ‘licences’, etc, [See AQA AS Geography, p246 for references to Shell in Russia. It can be easy to overstate either the benefits or the problems caused by TNC investment. At this point in the 21st century the range of different types and sizes of TNC is enormous, as is the range of reasons for their development and the range of countries and regions in which they operate. Predatory TNCs exist; more idealistic TNCs based on 1 principles of sustainable development also exist. Each TNC must be considered as a separate identity and discussion of the advantages and disadvantages that it can bring must be based op clear factual analy Globally integrated enterprises In 2006 Sam Palmisano, CEO of IBM Corporation, coined the phrase islobally integrated enterprise’. He used it to denote a company that fashions its strategy, its management and its operations, in pursuit of a new goal: the integration of production and value delivery worldwide. State borders, define less and less the boundaries of corporate thinking or practice Palmisano argues that in the 19th century, most big companies heir home country, with only elements of sales and -as, The MINC of the 20th century ~ in which companies created small versions of themselves in each country ~ ‘was a response to the trade barriers that arose after the world wars. This ‘was a successful model because it enabled the company to grow in those markets, understand local customer requirements and cultivate loc talent, But it also created waste because each country had its own back office functions (e.g. supply, procurement, finance and human resouro ‘were centred in distribution happening over Now the globally integrated TNC can locate functions anywhere in the world, based on the night cost, skills and environment, argues Palinisano |IBM now has one supply chain, for example.} This nev organisational form has emerged because, in the globalised world, everything is eon nected and work can move to the place where it is done best. The barriers tbat Used to block the flow of work, capital and ideas are weakening,that Development issues in countries at very low levels of economic development this section you will earn: about countries at very low development BA inks Tne UN factsheet entitled Facts about Least Developed Counties [LDCs)' can be found at: www. trols org/Uset les lef DublicaionsFactsheet pdf FAL Links For selected statistics on population and development see AQAAS Geography, p1S8. [BB Activity {Wd Draw concept diagram to show how the factors that characterise low developgient, like those mentioned in this section, are interrelated AQA _ Examiner's tip Inyour exam you shouldbe prepared to discuss these interrelationships and to quote statistics and other details about countries that you have studied The UN classifies a country as a least developed country (LDC) ifit meets low income (three-year average income per capita of less than US$750} human resource weakness (based on indicators of nutrition, health, education and adult literacy} sic vulnerability (based on instability of agricultural production, instability of exports, economic importance of non-traditional activities, handicap of economic smallness and percentage of population displaced by natural disasters) The current list of LDCs includes 49 countries: 33 in Africa, 15 in Asia ind the Pacific and 1 in Latin America. These countries are shown on the map in Fig, $.16. Fig. 516 Least dev ries (LDCS) Developing countries, in general, have not achieved a significant degree of industrialisation and have, in most cases, a medium to low standard of living, There is a strong correlation between low income and high population growth, low education standards, low life expectancy, etc IB Case study Bangladesh — the present situation Key population facts: Total population: 144.2 million (in 20 ‘Annual population growth rate: 1.7 per cent Total fertility rate births per woman): 3.2 pe No. of people living below USS1 a day: 36.0 per cent No. of people living below US$2 a day: 82.8 per cent Gross national income per capita: US$400 Life expectancy at birth: 63.3 years Infant mortality rate: 41/1,000 live births ‘Human Development Index rank: 137 out of 177 countriesChapter 5 Deve ment and globalisation . Key economic facts: a GDP real growth rate 7.0% (2006 est.) GDP ~composition by Labour force —by _occupation (%) The DfID Bangladesh site can be seen at: wwvwedfid gowauk/countries/asia/ bangladesh.asp Facts about Bangladesh can be found at: wwndfid govauk/countres/asial Bangladesh-factsasp Industry and minin 10 There ae references tothe work af Se Bs ActionAid in Bangladesh in AQA AS eee Geography, pp218-19. The following is an extract from the UK's Department for International Development [DID] website The UK expects to spend £114 million on aid to Bang recent years. Future spending is subject years, but we stand ready to ner jadesh in 2008/9. This is broadly the same level as in cisions about UK public expenditure plans for the next three s€ Our aid to Banglaclesh if we judge it can be used effectively. The Uk’s long-term goal is for Bangladesh to be a stable, prosperous and moderate Muslim majority democracy, playing a positive role in the global community. Our objectives are to embed democratic values; enable prosperity for all:and engender stability The UK's development programme is a significant part of the UK's relationship with Bangladesh. Over the past three years we have spent over £350 million, and helped to: lift more than halfa millio people out of extreme poverty 10 flood-prone homesteads on Char islands above 1988 flood leve lassrooms, and recruit 12,000 new teachers + raise more than 20, construct 1 provide basic education to 45 million children, through a non-government programme ensure 14 million urban dwellers have access to bi sic health services + enable more thar 1,000 farmers to gain improved access to markets, The UK remains fully committed to working with the government and people of Bangladesh to support their economic, social and political ambitions by helping to: build better governance reduce extreme poverty and vulnerability to clima hange,and eliminate seasonal hunger, + imcrease jobs and incomes through private sector development + improve the availability and quality of basic social services for the poor. This will continue to involve a range of development interventions: technical assistance, sector suppor, and targeted programmes. t will also require a significant increase in the effectiveness of external ai, building on the Joint Strategy approach developed by the four largest donors to Bangladesh: Japan, Asian Development Bank, World Bank and the UK,Development Bangladesh — development priorities BB Activity its neighbours and poverty remains widespread, especially in rural [E_Referring tothe information most serious ofthe countzy’s problems are given on p196, write a summary paragraph or two to describe the state of development in Bangladesh the widespread indebtedness of poor farmers, which arose partly Decause of attempts by the farmers to commercialise their farming by using more fertilisers, pesticides and machinery (sce below]; however, in an area where frequent floods and cyclones can destroy a farmer's whole crops for a season, this often led to an inability to pay back debts, what is more, commercial banks often charged particularly high levels of interest to poor farmers, because it was felt that loans were insecure social problems, including poor provision of education and health care (see below} the position of women in this Muslim society, in many areas women find it very difficult to find work outside the immediate confines of the home, re working Hh irks The UK and other partner governments and NG\ together to tackle some of the country’s problems. Their main The issues ofthe ole of women priority is described as pro-poor growth or growth that is targeted __in the family, education, farming at the poorest sections of the population, development and the provision ‘of loans for development are all. + dealt with in AQAAS Geography, pp218-19. development spending has ent prior From independence until about ‘concentrated on a number of differ In the 1970s, the emphasis was on market interventions to try to reduce the cost of food for the poor, and large capital spend on flood control, irrigation and drainage projects. In the 1980s, most public expenditures focused on broad agricultural development, with relatively low emphasis on rural infrastructue, In the 1990s, the development of small-scale infrastructure roads, bridges, culverts and market places - was singled out as the major element of the new rural development strategy. The road development projects, connecting 1,400 of the 2,100 growth centres/markets, contributed to increasing farm and non. farm output, employment and income, especially of the rural poor and women. Moreover, the landless and small farmers gained a larger share of the increase from crops, wages, livestock and fisheries. In the 21st century, investment has concent: areas of development: a Education: The geater emphasis on primary education, especially girls’ education, has been a consistent feature of the successive regimes since transition to democracy in 1991 Spending on education has been the largest single item in the revenue and development budget, and has become an important part of the programmes of all the main patties. Health care: Bangladesh has achieved impressive gains in life expectancy, child mortality and reproductive health. Bangladesh has lower child mortality, higher access to drinking water and sanitation, lower maternal mortality and higher contraceptive use than its neighbour, India. The national health programme has, over the years, focused on the provision of affordable rural primary health care {through Family Welfare Centres) andOC Chapter 5 sation evelopment and globali Fig. 537 Fl Bh iuinks For more details of high-yield varieties see AQAAS Geography, ppent-13, Grameen Bank: a micro-finance ‘organisation and community ‘development bank started in Bangladesh that makes small loans tothe impoverished without requiring collateral | BB tints Further details ofthe Grameen Bank canbe found at: en wikipedia.org The bank's own websites at: we grameen-infoorg on developing partnerships with NGOs, NGOs have been an extremely important source of health successes in Bangladesh, especially in the area of family planning and immunisation Agricultural development: especially through provision of loa aelitis forall farmers, even the poorest, and liberalisation of the market. This means that now high-yielding variety seeds have spread to about 65 per ce and irrigation facilities are available to over 40 per cent of the cultivated area, Fertiliser use has grown by 10 per cent per year over the last 30 years. Some of the most important & of rice-cropped ares, clopments have been in the production of ‘dry-season' rice farictics. As floods can destroy crops curing the rainy season this fall-back crop has been vital in increasing food security for the poor “Micro-finance projects: these have become widespread Unroughout Bangladesh, The Grameen Bank is the biggest of these, but several others are run by NGOs such as ActionAid see AQA AS Geography, pp2.18-19). The range of enterprises that are supported by such loans is enormous and many are inked to farm production, processing and marketing. However ‘he biggest proportion is in the garment industry, often roducing clothes for export. One recent estimate suggests that the total number of borrowers is about § million, of whom about 90 per cent are women, As most of them are rural poor their enterprises play a vital part in stabilising their family Ivis important that the work can take place in and around the home the need for modesty among Muslim women, The system of this bank is based on the idea that the poor hav skills that are underutilised. A group-based credit approach relies (on peer pressure within the group to ensure the borrowers conduct their financial affairs with strict discipline, ensuring repaymen eventually and allowing the borrowers to develop good credit standing. A distinctive feature of the bank's credit programme is that a significant majority of its borrowers are women. The bank was founded in 1976. The organisation and its founder ‘Muhammad Yunus, were jointly awarded the Nobel Peace Pr in 200 Among many diff ‘ne is the Village Phone programme, through which women centrepreneus can start a business providing a wireless payphone service in rural areas, This programme earned the 2004 Petersbers Prize, worth 100,000 euros, for its contribution of Technology to Development. The press release announcing the prize said srent applications of micro-credit by the bank, Grameen has created @ new class of women entiepreneurs who have raised tnemsoWves ftom poverty. Moreover, thas improved the livelinoods of faimers and others who are provided access to ertical market information and IYaline communications previously unattainable in some 28,000 villages of Bangladesh. More than 55,000 phones are currently in operation more than 80 milion people benafting tom access to market information ews from relatives, and more. Bangladesh - industry and trade Agriculture in the remoter rural areas of Bangladesh needs aid from the Bangladesh government, foreign governments and NGOs if itis to develop and feed the growing population. However, the country’s | ) | | |aladesh urity for rest onAid ind the relies conduct it he Prize yank, hone er iy tO 16 ho have vilagos wth rmation, 8 Fit is yuntry’s Development issues in countries at low levels of economic development Textile exports are number 1 and still rising! violent demonstrations in a bid Thoughts: Howto Realise Human fo achieve @ higher minimum nt Gains in the Post age, regular rest days and safer Bangladesh ions expansion has mainly been a 's the nation’s number one The Bangladesh Garments FeSult of the reduction of trade export earner, The sector, which ytanufacturers and Exporters festtictions, brought about by employs 22 million workers, Association (BGMEA) has Regotiations through the World counted for 75. px of predicted. textile exports will ade Organizatior Bangladesh's tolal exports of tise from US$7.90 billion earned ‘Last year we had tremendous US$10.53 billion in 2005-6, in jn 2005-6 to USSI5 billion by growth, The quo textile the process logging @ record 29/1, In part this optimism regime has proved to be @ big growth rate of 24.44 per cent. stems from how well the sector boost for our factories’, BGMEA However, since May, 2006 the as ard since the end of textile president SM. aziul Hoque ingladesh’s. textlle Indust which includes knitwear ready-made garments along ‘with specialised textile products, forking con indu n plagued by and clothing quotas, under the _ told reporters, after the sector's ongoing industrial untest, a8 Multifbre Agreement, in early 24 per cent growth rate was textile Workers, who are among 2008, revealed, some of the most lowly paid in the world, have staged regular A¢cording to a UN Development Programme report ‘Sewing industry is developing quickly ~ from a very low base. This ' development has come about largely because of trade liberalisation. The Bangladesh government continues to court foreign investment, something it has done fairly successfully in private power generation and gas exploration and production, as well as in other sectors such as cellular telephony, textiles and pharmaceuticals, The government has also set up a number of export processing, sones [EPZs} around the country. Companies operating in these nreas are granted big teduetions in taxes and in bureaucratic restrictions as long as all production is exported from the country It was hoped that the EPZs would help attract foreign direct investment in industry, However, the AFL-CIO (the main trade union organisation in the US) has asked their government to deny Bangladesh preferential access to US markets. They cite Bangladesh’s failure t meet promises to allow trade unions to ‘operate in EPZs. They are concerned that un-unionised companies ‘will undeteut prices in those countries where workers are allowed more rights. Eq Study alt the information on Bangladesh. 2 Describe how both trade and aid are helping Bangladesh to develop, bb Discuss the view that trade and aid have to go hand in hand to ensure that Bangladesh develops for al its people, including the very poorest. © Discuss how environmentally sustainable Bangladesh's development 4 Compare Bangladesh's road to development with that followed by India, China and/or the Asian Tigers. Refer in particular to the roles of trade and aid in stimulating development. ——