Introduction to International Business (MGT 321)

Cases629
Economic Development in Bangladesh
When Bangladesh gained independence from Pakistan in
1971 after a brutal civil war that may have left as many as
3 million dead, the U.S. National Security Adviser, Henry
Kissinger, referred to the country as a “basket case.”
Kissinger’s assessment was accurate enough. At the time,
Bangladesh was one of the world’s poorest nations.
Although most of the country is dominated by the fertile
Ganges-Brahmaputra delta, a lack of other natural
resources, coupled with poor infrastructure, political
instability, and high levels of corruption, long held the
country back. To compound matters, Bangladesh is prone
to natural disasters. Most of Bangladesh is less than
12 meters above sea level. The extensive low-lying areas
are vulnerable to tropical cyclones, floods, and tidal bores.
Beginning in the mid-1990s, however, Bangladesh began
to climb the ladder of economic progress. From the early
2000s onward, the country grew its economy at around
6 percent per annum compounded. Today, this Muslim
majority country of 160 million people has joined the
ranks of lower-middle-income nations. Poverty reduction
has been dramatic, with the percentage of the population
living in poverty falling from 44.2 percent in 1991 to
18.5 percent in 2010, an achievement that raised 20.5 million people out of abject poverty. Today, the country ranks
64th out of the 154 countries included in the World Bank’s
global poverty database. It has a considerable way to go,
but it is no longer one of the world’s poorest countries.
Several reasons underlie Bangladesh’s relative economic success. In its initial post-independence period,
Bangladesh adopted socialist policies, nationalizing many
companies and subsidizing the costs of agricultural production and basic food products. These policies failed to
deliver the anticipated gains. Policy reforms in the 1980s
were directed toward the withdrawal of food and agricultural subsidies, the privatization of state-owned companies, financial liberalization, and the withdrawal of some
import restrictions. Further reforms aimed at liberalizing
the economy were launched in the 1990s. These included
making the currency convertible (which led to a floating
exchange rate in 2003), reducing import duties to much
lower levels, and removing most of the controls on the
movement of foreign private capital (which allowed for
more foreign direct investment). The reforms of the
1990s coincided with the transition to a parliamentary
democracy from semi-autocratic rule.
Bangladesh’s private sector has expanded rapidly since
then. Leading the growth has been the country’s vibrant
textile sector, which is now the second-largest exporter of
ready-made garments in the world after China. Textiles
account for 80 percent of Bangladesh’s exports. The
development of the textile industry has been helped by
the availability of low-cost labor, managerial skills, favorable trade agreements, and government policies that
eliminated import duties on inputs for the textile business, such as raw materials. The Bangladesh economy has
also benefited from its productive agricultural sector and
remittances from more than 10 million Bangladesh citizens who work in other nations. Bangladesh is also the
home of the microfinance movement, which has enabled
entrepreneurs with no prior access to the banking system
to borrow small amounts of capital to start businesses.
This being said, the country still faces considerable
impediments to sustaining its growth. Infrastructure
remains poor; corruption continues to be a major problem; and the political system is, at best, an imperfect
democracy where opposition is stifled. The country is too
dependent upon its booming textile sector and needs to
diversify its industrial base. Bangladesh is also one of the
countries most prone to the adverse affects of climate
change. A one-meter rise in sea level would leave an
estimated 10 percent of the country under water and
increase the potential for damaging floods in much of the
remainder. Nevertheless, according to the U.S. investment
bank Goldman Sachs, Bangladesh is one of the 11 lowermiddle-income nations poised for sustained growth.
Sources
W. Mahmud, S. Ahmed, and S. Mahajan, “Economic Reforms,
Growth, and Governance: The Political Economy Aspects of
Bangladesh’s Development Surprise,” World Bank Commission
on Development and Growth, 2008; “Freedom in the World
2016,” Freedom House; “Tiger in the Night,” The Economist,
October 15, 2016; Sanjay Kathuria, “How Will Bangladesh
Reach High Levels of Prosperity?” World Bank blog, January 5,
2017; and Qimiao Fan, “Bangladesh: Setting a Global Standard
in Ending Poverty,” World Bank blog, October 5, 2016.
Case Discussion Questions
1.
What were the principal reasons for the economic
stagnation of Bangladesh after its war for
independence?
2. Explain how the liberalization program in the 1990s
enabled Bangladesh to start climbing the ladder of
economic progress. What are the main lessons here
that can be applied to economic development in
other nations?
3. Bangladesh is dependent for its prosperity upon
agriculture and textile exports. What are the risks
here? How might Bangladesh diversify its industrial
and commercial base?
‫المملكة العربية السعودية‬
‫وزارة التعليم‬
‫الجامعة السعودية اإللكترونية‬
Kingdom of Saudi Arabia
Ministry of Education
Saudi Electronic University
College of Administrative and Financial Sciences
Assignment 2
Introduction to International Business (MGT 321)
Due Date: 11/11/2023 @ 23:59
Course Name: Introduction to International
Business
Course Code: MGT-321
Student’s Name:
Semester: First
CRN:
Student’s ID Number:
Academic Year:2023-24-1st
For Instructor’s Use only
Instructor’s Name:
Students’ Grade:
Marks Obtained/Out of 10
Level of Marks: High/Middle/Low
General Instructions – PLEASE READ THEM CAREFULLY
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The Assignment must be submitted on Blackboard (WORD format only) via allocated
folder.
Assignments submitted through email will not be accepted.
Students are advised to make their work clear and well presented, marks may be reduced
for poor presentation. This includes filling your information on the cover page.
Students must mention question number clearly in their answer.
Late submission will NOT be accepted.
Avoid plagiarism, the work should be in your own words, copying from students or other
resources without proper referencing will result in ZERO marks. No exceptions.
All answered must be typed using Times New Roman (size 12, double-spaced) font. No
pictures containing text will be accepted and will be considered plagiarism).
Submissions without this cover page will NOT be accepted.
Learning Outcomes:
Knowledge:
1.1: Identify and evaluate the significant trade agreements affecting global commerce
Skills:
2.1: Analyse the effects of culture, politics and economic systems in the context of
international business
Values:
3.1 : Carry out effective self-evaluation through discussing economic systems in the
international business context
Case study
Please read Case 3: “Economic Development in Bangladesh” available in your ebook (International business: Competing in the global marketplace (13th ed.), at
page no.629, and answer the following questions:
Case study Question(s):
1. What were the principal reasons for the economic stagnation of Bangladesh after
its war for independence? Discuss.
(Minimum words: 400, marks: 2)
2. Explain how the liberalization program in the 1990s enabled Bangladesh to start
climbing the ladder of economic progress. What are the main lessons here that can
be applied to economic development in other nations?
(Minimum words: 500,
marks: 4)
3. Bangladesh is dependent for its prosperity upon agriculture and textile exports.
What are the risks here? How might Bangladesh diversify its industrial and
commercial base?
(Minimum words: 500, marks: 4)
Important Notes:
• This is an individual assignment.
• All references must be cited using APA format. This includes both in-text
citations and the reference list at the end of the document.
• Originality, Similarity and Plagiarism Check: Your work must be original. All
papers will be submitted through SafeAssign software to check for similarity and
plagiarism. Any instance of academic dishonesty will result in a grade of zero for
the assignment. No exceptions and no second chances!
Answers
1. Answer2. Answer3. Answer-