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CHAPTER I

1. INTRODUCTION

Globalization in the broadest sense implies integration of economies and societies across the

globe through the flow of technology, trade and capital. It basically refers to a process that

enables people, goods, information, norms, practices and institutions to transcend national

jurisdictions through markets, technologies, interests and information flows. Four types of

changes characterize globalization. First, it involves a stretching of social, political and

economic activities across frontiers, regions and continents. Second, it is marked by the growing

magnitude of interconnectedness and flows of trade, investment, finance, migration, culture, etc.

Third, it can be linked to a speeding up of global interactions and processes. And fourth, the

effects of distant events can be highly significant elsewhere and specific local developments can

have considerable global consequences. Thus the boundaries between domestic matters and

global affairs become increasingly fluid. Globalization, in short, can be thought of as the

widening, intensifying and growing impact of worldwide interconnectedness. It causes an

expansion in the volume and variety of cross border transactions in goods and services.

In this age of globalization the modernist principle that ―foreign policy is an extension of

domestic policy‖ has practically lost its relevance. And this is true not only for the relatively

disempowered developing countries but also for the relatively empowered developed economies.

Today the ‗foreign‘ is less an external entity while the ‗domestic‘ is hardly fully internal. The

meaning of Bangladesh, for instance, is no longer limited to the territoriality of 55,126 square

miles but rather has come to include the hundreds and thousands of Bangladeshis living abroad,

from Canada to Canberra, from Jeddah to Japan. This is as much an issue of economics as it is an

issue of technology.

Again globalization has economic, political and cultural dimensions, all of which can have a

social impact which in turn will have impact on the foreign policies of the interconnected world.

The different dimensions of the process are interrelated and mutually reinforcing. There are,

undoubtedly, significant potential benefits of globalization as long as bilateral and multi-lateral

policy regarding FDI, Labour force sharing, knowledge and technology sharing are concerned.

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Openness to foreign direct investment can contribute to growth by stimulating domestic

investment, improving efficiency and productivity, or by increasing the knowledge applied to

production. Increased access to the domestic financial system by foreign banks may raise the

efficiency of the banking process thereby lowering the cost of investment and raising growth

rates. Trade openness may facilitate the acquisition of new inputs, less expensive or higher-

quality intermediate goods and improved technologies that enhance the overall productivity of

the economy.

Conversely, the process of globalization entails significant risks and potentially large economic

and social challenges, particularly to the developing countries. Openness to global capital

markets has brought greater volatility in domestic financial markets, particularly in countries

whose financial systems were weak to begin with and whose economic policies lacked

credibility. Similarly trade liberalization has led in some countries to reduced demand for

unskilled labour, lower real wages, job losses and income declines which have often resulted in

higher poverty rates. As a result, there have been growing concerns about the negative effects of

globalization, and an increasingly polarized debate on the plight of the world‘s poorest.

It is very clear that the phenomenon of globalization has come to stay. In fact, globalization has

been described as a fast moving train that waits for nobody. Intended passengers either jump

onto it or risk of being left behind. Like every journey, every passenger must be prepared to

board at the right station, with the necessary kits and with a clear knowledge or vision of his

destination. There are obvious indications that Bangladesh is ill prepared to start this journey and

cope with the developments. Apart from the fact that most developing countries lack the basic

infrastructure to embark on industrialization drives, the inability to make sound economic

policies, unpredictability of changes in laws and pervasive corruption are critical obstacles to

development. Therefore, one of the greatest challenges faced by Bangladesh in this century is

how to strengthen its participation in the global economy in a manner that will bring widespread

and sustainable benefits to its people.

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1.2 OBJECTIVES

1.2.1 Broad Objective

The broad objective of this study is to look into the impact of the globalization on the foreign

policy of Bangladesh.

1.2.2 Specific Objective

Specific objectives are:

Understanding globalization and its different dimensions

Understanding foreign policy

Understanding the interconnectedness between globalization and foreign policy

Understanding challenges of foreign policy in the context of globalization

Understanding foreign policy perspectives of Bangladesh in the globalized world

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1.3 METHODOLOGY

1.3.1 Data Type and Source:

This study basically delves in secondary data. The data is mainly collected from different

literature, journals, magazines and books. In data mining internet resources played the vital role.

1.3.2 Data Collection

The broad objective of the study is to look into the impact of globalization on the foreign policy

of Bangladesh. For this purpose at first we tried to define and conceptualize the globalization and

foreign policy imperatives and their interconnectedness. Then we tried to look into the current

status of Bangladesh foreign policy in different perspective like bi-lateral relationships with

different countries and international organizations etc. In this regard we have reviewed number

of related literatures, journals, magazines and books.

Figure 1: Methodology Schematic

Literature Review

• Articles

• Journals

• Magazines

• Books

Bangladesh Foreign Policy

in Globalized World

Da

ta C

oll

ecti

on

Data Analysis

Objectives

• What is Globalization

• What is Foreign Policy

• Interconnectedness

• Foreign policy

response

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1.4 LIMITATIONS

Though this study is based on secondary data yet few interviewing of some of the professionals

from respective foreign policy arena could have added more vivid representation and

understanding. But the training schedule and stipulated time frame in addition to lack of logistics

restrained to do so. As a result we have no choice but to depend on the secondary sources mostly

from web sources.

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CHAPTER II

2. LITERATURE REVIEW

Many books and literatures have discussed the impact of globalization both from the context of

developed and developing country. These studies are focused mainly on the globalization

phenomenon and its positive and negative impacts on different social, cultural, political and

economical factors. There are many studies which directly relate the case of Bangladesh. But

there is hardly any paper that studied the direct impact of globalization on the foreign policy of

Bangladesh. The repercussions of globalization on foreign policy are rather indirect which come

into being following the changes in other domestic factors in the changed global scenario. This

study will concentrate on conceptualizing the globalization phenomenon and foreign policy

imperatives and their interrelating challenges in Bangladesh context.

2.1 GLOBALIZATION

Globalization (or Globalisation) refers to the increasingly global relationships of culture, people,

and economic activity. It is generally used to refer to economic globalization: the global

distribution of the production of goods and services, through reduction of barriers to international

trade such as tariffs, export fees, and import quotas and the reduction of restrictions on the

movement of capital and on investment. Globalization may contribute to economic growth in

developed and developing countries through increased specialization and the principle of

advantage. The term can also refer to the transnational circulation of ideas, languages, and

popular culture. (Source: Wikipedia)

The term was first employed in a publication entitled Towards New Education in 1930, to denote

a holistic view of human experience in education.1 In the 1960s the term began to be used by

economists and other social scientists. The term reached the mainstream press in the latter half of

the 1980s. Since its inception, the concept of globalization has inspired competing definitions

and interpretations, with antecedents dating back to the great movements of trade and empire

across Asia and the Indian Ocean from the 15th century onwards.2

1 Oxford English Dictionary Online. September 2009. Retrieved 5 November 2010.

2 A.G. Hopkins, ed. "Globalization in World History". Norton. (2004). pp. 4–8

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Tom G. Palmer of the Cato Institute defines globalization as "the diminution or elimination of

state-enforced restrictions on exchanges across borders and the increasingly integrated and

complex global system of production and exchange that has emerged as a result."3

Thomas L. Friedman popularized the term "flat world", arguing that globalized trade,

outsourcing, supply-chaining, and political forces had permanently changed the world, for better

and worse. He asserted that the pace of globalization was quickening and that its impact on

business organization and practice would continue to grow.4

Takis Fotopoulos in his paper ―Globalization, the reformist Left and the Anti-Globalization

‗Movement‘‖ defined "economic globalization" as the opening and deregulation of commodity,

capital and labour markets which led to the present neoliberal globalization. "Political

globalization" named the emergence of a transnational elite and the phasing out of the nation-

state. "Cultural globalization" was the worldwide homogenization of culture. Other elements

included "ideological globalization", "technological globalization" and "social globalization".

In 2000 the IMF identified four basic aspects of globalization:5

Trade and transactions: Developing countries increased their share of world trade, from 19

percent in 1971 to 29 percent in 1999. But there is great variation among the major regions. For

instance, the newly industrialized economies (NIEs) of Asia prospered, while African countries

as a whole performed poorly. The makeup of a country‘s exports is an important indicator for

success. Manufactured goods exports soared, dominated by developed countries and NIEs.

Commodity exports, such as food and raw materials were often produced by developing

countries: commodities' share of total exports declined over the period.

Capital and investment movements: Private capital flows to developing countries soared during

the 1990s, replacing "aid" or development assistance which fell significantly after the early

1980s. Foreign Direct Investment (FDI) became the most important category. Both portfolio

investment and bank credit rose but they have been more volatile, falling sharply in the wake of

the financial crisis of the late 1990s.

3 Globalization Is Great! by Tom G. Palmer, Senior Fellow, Cato Institute

4 Friedman, Thomas L. "The Dell Theory of Conflict Prevention". Emerging: A Reader. Ed. Barclay Barrios. Boston: Bedford, St.

Martins, 2008. 49 5 IMF Team. (2000). „Globalization: Threats or Opportunity.‟ 12th April 2000, IMF Publications.

http://www.imf.org/external/np/exr/ib/2000/041200.htm

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Migration and movement of people: In the period between 1965–90, the proportion of the labor

forces migrating approximately doubled. Most migration occurred between developing countries

and Least Developed Countries (LDCs). The flow of migrants to advanced economic countries

was claimed to provide a means through which global wages converge. They noted the potential

for skills to be transferred back to developing countries as wages in those a countries rise.

Dissemination of knowledge (and technology): Information and technology exchange is an

integral aspect of globalization. Technological innovations (or technological transfer) benefit

most the developing and Least Developing countries (LDCs), as for example the advent of

mobile phones.

2.1.1 Historical Foundation of Globalization

The origin of the concept of globalization stretches far back to the activities of the early

Mediterranean civilizations before the fifth century A.D. The ancient explorers, motivated

primarily by the prospects of material gain, traversed the ―silk route‖ between China and Europe,

the ―amber route‖ from the Baltic to the Mediterranean and the ―spice route‖ by sea between

Egypt, the Yemen and India. During this period, up to the end of the fifteenth century, the

volume of long distance trade, travel, and communications was inevitably irregular. Increased

trading expeditions by British, Dutch, and Portuguese merchants in the seventeenth century

raised the demand for colonial goods such as coffee, tea, sugar, tobacco, and chocolate. The

requirement for more production of these goods as the demand increased prompted the beginning

of slave trade from Africa to the Americas and Europe. Following these expeditions, European

languages were easily transplanted to other continents and the three monotheistic religions

namely Islam, Christianity and Judaism took root. In the nineteenth century, the technology

revolution in transport and communications including the emergence of the railway, the

telegraph and the steam ship all lowered freight rates and raised incomes therefore further

boosting globalization.

Globalization witnessed its greatest upsurge in the last two decades of the twentieth century with

faster modes of transport and revolutions in information technology and communications being

the major contributors to its growth. The collapse of the isolationist era of cold war finally

brought home the new integrated world of globalization. Today, globalization has become a

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particularly fashionable way to analyze changes in the international economy and world politics.

Friedman in his book ‗Lexus and the olive tree‘ describes globalization as the dominant

international system at the end of the twentieth century, replacing the Cold War system. He

describes globalization as the new international system, which shapes virtually everyone‘s

domestic politics, commerce, environment and international relations. According to him the

overarching feature of the cold war system was division. It influenced the domestic politics,

commerce and foreign relations of virtually every country in the world. It shaped many things,

but it didn‘t shape everything. On the other hand, globalization has only one overarching

feature–integration. It is all about joint ness and ever increasing interconnectedness. It virtually

influences everything, whether it is a company or a country.

2.1.2 Core Elements of Globalization

Basically, globalization rests on a tripod namely, the expansion of markets (economic),

challenges to the state and institutions (political), and the rise of new social and political

movements (cultural). Economically, technological changes and government deregulation have

permitted the establishment of transnational network in production, trade, and finance creating

what is referred to as a ―borderless world.‖ The new production network describes firms and

multinational enterprises (MNEs) who use advanced means of communications and new

technologies to spread their activities across the globe.

The second element affects States. Political power and activities extend across the boundaries of

nation- states while policy making on issues such as human rights, environmental degradation

and nuclear safety have required global consensus. The third element of globalization affects

more than markets and states. It is altering the lives of people across the globe. Fast

dissemination of media, books, music, international ideas and values has produced a somewhat

global culture.

2.1.3 Key Institutions of Globalization

The main pivot of propagating economic globalization lies with certain powerful financial

institutions that are solely in the hands of western countries. They include the International

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Monetary Fund (IMF), World Bank (WB), and the World Trade Organization (WTO). These

institutions, collectively known as the Bretton Woods institutions, largely influence economic

and political policy formulation in developing countries. For example, one of the conditions

usually imposed on developing countries in order to qualify for loans from these institutions is

the removal of subsidies and deregulation of the public sector. In contrast, developed nations

themselves have continued to subsidize agriculture to the tune of US$1 billion a day. This double

standard has characterized the activities of these institutions since their inception. The

organizations are used by the United States (US) and the other industrialized nations in the G8,

to impose financial discipline and liberal economic policies on the developing countries, but no

mechanism exists that forces the rich countries to play by the rule they set for others. Moreover,

the decision-making structure discriminates against developing countries therefore condemning

developing countries to an inferior position in these organizations.

The views of IMF policies tend to be counter-productive especially for the developing countries.

They actively compelled the developing countries through loan conditional ties to adopt

Structural Adjustment Programs (SAP) which require them to reduce government spending, end

public subsidies, devalue their currencies, adopt export oriented policies, and raise interest rates

to reward foreign investors. Apart from the fact that the attachment of conditions to loans has

been criticized as unwarranted intervention in the affairs of a sovereign state, most of the

countries of the third world that adopted these policies are beset with tales of woes.13 If anything

has changed in those countries, it is that poverty has become more rampant therefore exposing

the failure of these institutions. According to former WB Chief Economist Mr Joseph Stiglitz,

countries that ignore IMF fare better. Developing countries of the third world are groaning under

the yoke of these institutions. Its huge debts to these organizations are stifling development.

These countries therefore demand a greater say in these bodies, the total cancellation of their

debts, and long term development plans in place of the usual emergency loans that become the

burden of developing countries generations yet unborn.

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2.1.4 Dimensions of Globalization

2.1.4.1 Technological Globalism

Technological globalism has its roots to the earlier phases of industrial revolution. Currently it

arose from advances in manufacturing technology that produced increases in productivity,

contributing to a decade-long economic growth spurt. And the dividends extend beyond the

traditional measures of productivity. Industrial products are more durable, use less energy, and

often cost less than they did a decade ago. Technology is indeed a key component of information

globalism, yet there have been tremendous changes in the forms of communication. For instance,

the use of IT tools such as faxes machines, emails and Internet for business and commerce,

learning and dissemination of knowledge is so widespread that was unthinkable before.

Similarly, the use of movies and television for social awareness and entertainment, dissemination

of knowledge and information has dramatically expanded the circle of people who participate in

global communication. The introduction of 24-hour cable news and growing application of

Internet, in particular, resulted in 'death of distance' that has become almost a battle cry of the

information age and is now linked to global communication networks.

Properly harnessed and liberally distributed, technology has the power and potential to erase not

only national borders but also human ones (Friedman, 2000: xvi). Indeed, technological march

has taken breathtaking speed affecting all spheres of industrial life, often resembling science

fiction film and spreading into nanotechnology, biotechnology (including cloning of life and

mapping Human Genome), quantum computers and neural network, semiconductors, sensors and

robotics (Maniruzzaman, 2001:9). Futuristic features in the scientific-technological arena such as

the BBC's 'To-morrow's World' appear so pertinent in current context of international reality.

The old economy has also re-emerged as "knowledge-based" and as the "New Economy." The

U.S. industrial sector, for instance, that has been in a near-death experience in the 1970s, "has

been steadily reorganizing, gathering strength, and improving its efficiency. Today, as a result of

technological innovation, drive and prioritization the U.S. is back as a manufacturing

powerhouse" (Carlson, 2000:1). There is bound to be occasional slowdown and fluctuation due

to the swiftly changing nature of global politics and the ramifications that it may on both

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industrial growth and economy, but technology has moved so fast and been so sweeping that the

growth spurt cannot be held back permanently.

2.1.4.2 Information Globalism

Information globalism or globalization of communication has developed over the last century.

Technology itself is a key component of information globalism, yet there have been tremendous

changes in the forms of communication over time. When Marshall McLuhan publicized the

notion of' Global Village' in the 1960s, it was the culmination of years of study about

developments in communication. For instance, the use of information technology (IT) tools or

.com technology for business and commerce, learning and dissemination of knowledge is so

widespread that was unthinkable before. Similarly, the use of movies and television for social

awareness, entertainment, dissemination of knowledge and information has dramatically

expanded the circle of people who participate in global communication net (Keohane and Nye

Jr., 2000: 108-109).

The process of electronic communication started from the wired electronics of the early

telegraph, telephone, radio, movies, television and then extended to the wireless and satellite

communication networks and more recently to computer technology and the development of the

Worldwide Web/websites, Email, faxes, cellular phones and the Internet—enabling the ability to

communicate, both through space and time. All this enabled almost instant communication

between the peoples of the world who possess the necessary electronic equipment and

technology. The Internet users have already approached nearly 200 million and the number is

expected to cross 700 million by the end of 2001, despite the stark disparity of users between the

rich and poorer countries (Rahman and Majumdar, 2000: 1).

The results of this entire system-net development have been both extensive and intensive: global

communication network and globalization of communication tenuously connected to the

information chain has transcended their states or even their localities. Reduced costs of

communications have increased the number of participating actors and increased relevance of

complex interconnectedness or thickness of globalism. The volume of communications has

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increased by many orders of magnitude, and the intensity of globalism has been able to expand

exponentially as a result of this "message velocity." Markets react more quickly than before,

because information diffuses so much more rapidly and huge sums of capital can be moved at a

moment's notice (Keohane and Nye Jr., 2000:113-114). Thus information revolution has spread

far and wide, reaching systemic proportions.

2.1.4.3 Economic Globalism

Linked to both technological and information globalism is economic globalism, with the latter

already having outpaced political globalization. Indeed, proliferation of the word globalization

stems largely from changes in the world economic scene over the last decade (Beabout, 2000: 7-

8; Keohane and Nye Jr., 2000: 106). It means the globalization of the economy or the integration

of economies across national borders with the globalization of production, trade and investment.

It involves long-distance flows of goods, services, and capital, as well as the information and

perceptions that accompany market exchanges. It also involves the organization of the processes

that are linked to these flows, such as the organization of low-wage production in Asia for the

U.S. and European markets.

Economic globalism has been conditioned by what the economists call 'network effects' of the

'knowledge-based economy' linked to global communication networks. IT has changed

dramatically some of the leading global economies. The U.S. economy that was virtually sinking

until the early 1990s has now emerged to reassert its economic muscle globally. The Internet

economy has become such a force of the U.S. economy that it ever was before, generating an

estimated $830 billion in revenues in 2000, a 30 per cent increase over 1999. It also created jobs

and increased productivity in companies across the econonty (US Internet, 2001:7).

Similarly, India's impressive technical-computer expertise has been developed so spectacularly

in recent years that its expertise is eagerly sought around the world. Its software exports have

been growing at the astronomical annual rate of 50%, rising from approximately $200 million

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per year in the early 1990s to the late 1990s to $5.2 billion, and is expected to rise to $50 billion

a year by 2008 (Pickering, 2000: 5).

Global movement of capital and investment has also been amazing. The closing years of the

twentieth century have witnessed some of the largest wave of mergers and takeovers in business

history, following frenetic burst of activity in the telecommunications, media and technology

sectors. Most of the players have been either North American or European, but some were also

Asians, especially Japanese. The new transactional culture had wide-ranging ramifications. One

of the impacts of the cult is the drive towards privatization around the world, reinforcing

pressures that encourage management to regard employees as a cost rather than an asset. It is

viewed that for nations like Bangladesh with a bloated state sector, privatization remains the

gateway to more efficient resource allocation that may facilitate the flow of foreign direct

investment (FDI) (Plender, 26 Dec 2000).

Related to the above is the more significant aspect of economic globalization, what is called

'institutional velocity' (Keohane and Nye Jr., 2000:114). This includes globalization of

production and trade, the rise of the MNCs and an expansion of investment markets. All this

seems closely interlinked. During recent years growth in international trade has outpaced overall

economic growth. Production of finished goods that are made from parts assembled in one

country while produced and sold in other countries. The MNCs have changed their

organizational structures, integrating production more closely on a transnational basis and

entering into more networks and alliances, as global capitalism has become more competitive

and more subject to change. They created transnational networks to coordinate product

development, production, and marketing of goods and services as they found that it more

efficient and cost effective to have offices and production sites in more than one country.

Developing countries have often been integrated into the MNC networks as suppliers or

assemblers of components. Naturally there has been a great of capital investment across national

borders.

With globalization of the economy, there has also been a growing number of agreements among

nations to have agreed-upon standards across national borders to standardize systems and rules

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across national boundaries. While the United Nations (UN) has now taken on the role of a global

parliamentary government structure, an expansive multiplication of bodies and commissions

regulate economic development but also civil rights, women issues, the environment, and various

other issues. The World Trade Organization (WTO), established following the 1994 Uruguay

Round of General Agreement on Tariffs and Trade (GATT) is to regulate trade between various

national market economies (Beabout, 2000:7-8). As a result there was a staggering increase in

private investment to developing countries, with almost a US$50 billion increase every year

during the 1990s. There have been electronic transfers of funds and deregulated trading,

investors and markets more fully integrated into a single, global system (Beabout, 2000: 9-10).

Similarly, economic globalism most markedly affected worldwide financial markets. The

financial crisis in Thailand in July 1997 is a case in point that subsequently had its regional and

worldwide reverberations, requiring urgent international attention and 'bailout' packages by the

International Monetary Fund (IMF). On the other hand, the economy of the neighboring India

has shown so dramatic upgrading due to chain-link effects of knowledge-based networks that it

is often mentioned as a replicable model of New Economy. Flow of business, money and stocks

is easily transformed into digital orders on a computer as e-business and e-commerce builds their

higher profiles (Keohane and Nye Jr., 2000: 108-111).

Thus as economic globalism and its follow-up of interconnectedness have "become thicker,

systemic relationships among different networks have become more important. There are more

interconnections. Intensive economic interdependence affects social and environmental

interdependence; awareness of these connections in turn affects economic relationships"

(Keohane and Nye Jr., 2000: 109). Market and trade-wise, institutionally and organizationally,

flow of capital and investment, goods and services, network of international agreements etc. the

world is now more fully interconnected as never before, giving it more the shape of a systemic

order than ever.

2.1.4.4 Military Globalism

Military globalism has contrasting signals for the age of globalization. It has its roots to long

distance networks of systemic interconnectedness of the Cold War period involving both world-

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straddling alliances and intercontinental missile systems capable of destroying each other in 30

minutes. That enabled the contending sides to use actual force and use of deterrence signaling i.e.

the threat or promise of force on the Cold War pattern of "balance of terror" that is employed. Of

course not all powers have had the logistical, command and control capabilities for global reach

as the U.S., currently viewed as the lead actor in the unipolar international system. Most other

powers have become either local or at best regional. The USSR not only disappeared politically,

but the diminutive Russian Federation lost its military prowess and more importantly its will

power, while China's deterrent capability is no more than a fraction of that of the U.S. and as an

economic system the Chinese have also put aide communism (Yergin and Stanislaw, 2000:12).

The experiences of the Gulf War had indicated that the U.S. itself can hardly act alone as an

international gendarme to maintain systemic stability. Rather a heightened global awareness

following information revolution of some of the civil wars and conflicts contributed to pressures

for international humanitarian interventions, as in Bosnia and Kosovo.

Similarly, the daring terrorist attacks of 11 September 2001 in the picturesque New York twin-

tower and in the most secured Pentagon office complex emphasized that security network or

technological/military power of the conventional order can be made irrelevant and totally

dysfunctional, as technology has become 'democratic', transferable, and no longer in static

ownership of powerful governments. Hence there may be a need for cohesive international action

to stem the tide of growing violence, not necessarily by conventional military means alone. The

U.S. itself, though is now both self-projected and well-famed as the lead player in the unipolar

international system, has been louder than others in the campaign seeking to organize an

international coalition as a 'counter-strategy' in the war on international terrorism.

Moreover, although a primary target of such terrorist attacks from organized groups or non-state

entities, the U.S. has been emphasizing a strategy of engagement and enlargement regionally as

well as globally. The emphasis has been on replacing the confronting strategies of the earlier era

and thus contributing to a more and more thickness of interconnectedness or corresponding

linkages across the international system. What may still be a missing link in the strategy is not

the absence of military-strategic means, but appropriate responses to the politico-economic

justification provided for the terrorist acts or the violent means that go with them.

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2.1.4.5 Environmental Globalism

Environmental globalism refers to the relatively unvarying nature of degradation of the global

environment due either to natural phenomena or civilizational changes induced by human

activity, thus conveying the sense of 'only one earth' than ever before. Pollution contributed more

than others to environmental globalism. It has its sources in the coal-oil-steel-auto-chemical

economy that was created between the middle of the 19th

and 20th

centuries, though has become

thicker during the more recent years (Keohane and Nye Jr., 2000:113). Modern destructive

means of warfare, including the use/abuse of chemical and biological gases-weapons, supported

by high speed delivery systems and missiles are causing massive desolation to human abode,

ecosystem and environment locally, regionally and internationally. Such was the experience

during the Gulf War towards the beginning of the 1990s or is being currently experienced in

Afghanistan.

Thus pollution of ecosystem, e.g. of rivers, streams and such other similar water bodies not only

has local impacts but also directly affects those downstream. Similarly, poisonous air lethally

affect cities and localities far beyond. The long-distance air and sea transports also affect

atmosphere or oceans, as well as biological substances such as pathogens or genetic materials

affect human health and sustenance of nature. Included also the depletion of the stratospheric

ozone layer as a result of ozone-depleting chemicals, as is the spread of the killing AIDS virus

from west equatorial Africa around the world since the end of the 1970s. It has been drawing

media headlines through the 1990s ever more due to its widening dispersal and its incurable

nature (Keohane andNye Jr., 2000: 106-107, 111).

There have been growing realization that, given the global nature of environmental problems

engulfing the system, the responses have to be global. The efforts to combat global

environmental degradation and to ensure sustainable development had began in the early 1970s

with the Stockholm Conference and the birth of the UN Environmental Program (UNEP), but the

momentum had been built up with the World Conference on Environment and Development

(WECD) at Rio (1992). The effort globally is now renewed every five years involving the

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concerned international organizations, governments, civil society representatives such as the

NGOs, and the recurrent efforts are now spread over to specific issue areas such as curbing gas

emissions, reversing global climate change, promoting environmental legislations and their

enforcement, encouraging green technology and recycling etc. Funds are now mobilized as part

of systemic efforts to counteract environmental degradation and pollution, though problems often

have to be identified locally and regionally to redress them and to seek environmental

alternatives to the existing life and living styles.

2.1.4.6 Sociopolitical and Cultural Globalism

This dimension of globalism involving society, politics, and culture interacts with other types of

globalism, because technological, military, environmental, and economic-market activity convey

information and generate ideas, which may then flow across geographical and political

boundaries. Notionally it involves the movement of ideas, information and images, often

resulting in what sociologists call 'isomorphism', and cross-border mobility of people.

Sociopolitical and cultural globalism has invariably dented the past 'political and cultural

distance' across global frontiers (Keohane and Nye Jr., 2000: 107,110).

Social globalism affects the consciousness of the individuals and their attitude toward culture,

politics, and personal identity. In the current era, as the growth of the screen view and Internet

reduces costs and globalizes communications, the flow of ideas is increasingly independent of

other forms of globalization. The actual movement of ideas and information, even the very

assumptions, attitudes, and expectations of peoples are virtually instantaneous. While the

systemic impacts may vary due to differences or variations of other levels of socio-cultural

indicators, even trivial symbols, as expressed in baseballs, rock-'n'-roll music or T-shirts convey

the impacts on values and lifestyles of peoples across the globe (Keohane and Nye Jr.,

2000:107,110).

The vast expansion of transnational channels of contact and at multi-continental distances also

has helped expand an additional dimension of complex interdependence, with multiple issues

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connecting societies. There were increasing limits to the role of the national governments. Even

with widespread recognition of the benefits of deregulation, the role of the government is

changing from that of primary economic actors to a more diminished role as economic referees

(Beabout, 2000: 8; Keohane and Nye Jr., 2000: 117).

The roles of individual citizens, civil society and even the nature of the governments and governance

have been changing globally. Democracy as a system of governance has found widespread

popularity and acceptance across continents, including the developing world of Asia, Africa and Latin

America. There has been a worldwide movement towards democratic mode of governance, with an

increasingly greater role assumed by individuals and very many social segments. Momentous change is

thus noticeable due to the proliferation of the non-governmental organizations (NGOs) that span national

borders with their professed goal of influencing transnational governmental agreements about labor

conditions, rights of the landless and poor, gender and children's rights, the environment and trade

(Beabout, 2000: 8; Keohane and Nye Jr., 2000:117). There is a greater emphasis on human rights and

human security, as against traditional emphasis upon state security and integrity. The more famous of

the NGOs such as the Greenpeace and Amnesty International with their worldwide networks can

now raise their voices as never before against human rights violations and environmental

degradation. During 1999-2000 NGOs used the Internet and other communication network to

coordinate massive protests against the WTO, WB and the IMF annual meetings and gatherings

(Keohane and Nye Jr., 2000: 116-117). This trend of' globalization from below' continues since on an

intensified scale seeking to reshape systemic thinking with worldwide public opinion mobilization

against perceived asymmetric intrusion and dominance.

"Globalization of culture" at its most profound level sees the growing development of a monolithic

consumer culture, a moral vision that seems to encourage a global vision of the world. This includes

the culture of Hollywood/Bollywood movies, fast food chain resembling Big Macs and/or fusion

cuisine, MTV/Sony/ZTV, and Disneyland etc., a vision of moral libertinism, material consumption

or secular consumerism cut from traditional mores, the atomized self and often uninfluenced by

family and religion. In this each individual is often conceived of as autonomous—free from the

strictures of tradition, class and familiar obligations, making the individual the ultimate authority in

moral matters (Beabout, 2000: 12; Ford, 2000: 1-3).

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However, this aspect of globalization contains the greatest potential for growth as well as the greatest risk

for moral obliteration depending on which moral vision is globalized. On the other hand, an expression of

moral vision may contribute to an acceptance of the diversity of cultures. It may promote the

fundamental dignity of every human being, a deepened awareness of human fellow feeling and solidarity

(Beabout, 2000: 12-14).

Social globalism in general affects the consciousness of the individuals and their attitude toward culture,

politics, and personal identity. In the current era, as the growth of the screen view and Internet reduces

costs and globalizes communications, the flow of ideas is increasingly independent of other forms of

globalization. The actual movement of ideas and information, even the very assumptions, attitudes,

and expectations of peoples are virtually instantaneous.

The virtual reality is that the politico-ideological walls of the past decades have crumbled

globally and the old division of nations into confronting blocs is no longer valid. Even most of

the communist countries, including China, opened their economies in a fashion no body could

imagine before (Beabout, 2000: 6-7). Thus sociopolitical and cultural globalism in all its

manifestations accelerated the process of thickness of systemic interconnectedness it ever had

simultaneous with closing the gaps in all other dimensions of globalization.

2.2 FOREIGN POLICY

A country's foreign policy, also called the foreign relations policy, consists of self-interest

strategies chosen by the state to safeguard its national interests and to achieve its goals within

international relations milieu. The approaches are strategically employed to interact with other

countries. In recent times, due to the deepening level of globalization and transnational activities,

the states will also have to interact with non-state actors. The aforementioned interaction is

evaluated and monitored in attempts to maximize benefits of multilateral international

cooperation. Since the national interests are paramount, foreign policies are designed by the

government through high-level decision making processes. National interests‘ accomplishment

can occur as a result of peaceful cooperation with other nations, or through exploitation. Usually,

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creating foreign policy is the job of the head of government and the foreign minister (or

equivalent). In some countries the legislature also has considerable oversight.

2.2.1 History of Foreign Policy

Aristotle, an ancient Greek philosopher, described human as a social animal. Therefore,

friendships and relations have existed between humans since the beginning of human creation.

As the organization developed in human affairs, relations between people also organized.

Foreign policy thus goes back to primitive times. The inception in human affairs of foreign

relations and the need for foreign policy to deal with them is as old as the organization of human

life in groups.

The literature from ancient times, the Bible, the Homeric poems, the histories of Herodotus and

Thucydides, and many others show an accumulation of experience in dealing with foreigners.

The ancient writings (Chinese & Indian) give much evidence of thought concerned with the

management of relations between peoples.

2.2.1.1 Post-Renaissance Medieval Period

In medieval Europe, political philosophers like Machiavelli, Bodin, Grotious, Hobbes,

Pufendorf, Hume and Rousseau underlined the need for rules to regulate the interaction among

emerging sovereign nation states. In the 18th and 19th centuries Kant, Bentham, Fichte, Hegel,

Rank and Mill‘s political theories also had a bearing on relations between European states. At

that formative stage, however, the concept of international relations remained an appendage of

the general political theory rather than a distinct subject for study in its own right. In those times

foreign relations were not supposed to be for public consumption.

2.2.1.2 Twentieth Century

The global wars were fought three times in this century. Consequently, international relations

became a public concern as well as an important field of study and research. After the Second

World War, during 1960‘s many researchers in U.S. particular, and from other countries in

common, brought forth a wealth of research work and theory. This work was done for

international relations and not for foreign policy as such. Gradually, various theories began to

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grow around the international relations, international systems and international politics but the

need for a theory of foreign policy, that is the starting point in each sovereign state, continued to

receive negligible attention. The reason was that the states used to keep their foreign policies

under official secrecy and it was not considered appropriate for public, as it is considered today,

to know about these policies. This iron-bound secrecy is an essential part for the framework of

foreign policy formulation. The second world war and its devastation was a great threat for the

human survival, revealed to everyone the importance of international relations. Though foreign

policy continued to remain under-cover, academic work placed international relations in a

structured framework of political science. Graduate and Post-graduate courses developed.

Research was encouraged, and gradually, international relations became an academic discipline

in universities throughout the world.

The writers who worked with the foreign policy can be divided in two groups: 1. World war

writers who treat international politics and foreign policy as an indifferent, single field of study.

Who recognize foreign policy as a source rather than the substance of international politics and

bring it under study as a subject. 2. The second group restricts its work to foreign policy making.

The works of second group comes closer to the theory of foreign policy but there is no attempt to

formulate a basic theory of foreign policy. Morgenthao‘s works on principle elements of foreign

policy seem to have covered the most ground.

2.2.2 Core Components of Foreign Policy Analysis

To enable a systematic discussion of various theoretical and conceptual perspectives on for-eign

policy, a concise depiction of the subject of study is needed. Much scholarly effort has been

spent on defining foreign policy. Instead of randomly reviewing definitions - an exercise which

can only ever be incomplete -, a brief review of the core analytical units developed in the disci-

pline of foreign policy analysis allows us to identify what can be considered as the (timeless) gist

of the concept of foreign policy.

Logically, the existence of a ―foreign policy‖ presupposes a distinction between inside - an ac-tor

and its domestic context - and outside/foreign - the environment the actor faces - , and some form

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of political relationship between the two. To set the three components of this basic, generic

description of foreign policy analytically into relation, we can rely on a process-oriented

approach often adopted in classical foreign policy analysis.

Firstly, everything that takes place in the domestic or internal sphere has been discussed un-der

the term ―foreign policy decision-making‖ (Gross Stein 2008). With the intention of explain-ing

foreign policy behaviour (Harnisch 2002), classical foreign policy analysis focused a lot on this

dimension by analysing the decision-making process itself (Snyder et al. 1954; East et al. 1978)

and the psychological, political and social context in which decision-makers are embedded when

designing foreign policies (Sprout/Sprout 1956). In essence, the study of foreign policy decision-

making requires answering each of the following questions: by whom (actors), on what basis (ca-

pacities/foreign policy instruments), for what purpose (interests/objectives) and by what means

(decision-making procedures) are foreign policy decisions made?

Secondly, the view foreign policy analysts hold of the external environment depends largely on

the chosen level of analysis: some approach it from an actor-based perspective, focussing

classically - on states, but also on other, non-state actors; others have taken a structure-focused

(top down) approach (cf. Carlsnaes 2008).

Finally, to incorporate the politics dimension into this process-based approach of foreign pol-icy,

analysts have distinguished between foreign policy decision-making and ―foreign policy

implementation‖ (Smith/Clarke 1985). Where the former depicts the phase in the foreign policy

process during which decisions are prepared and taken, the latter describes how this output of the

foreign policy decision-making machinery is implemented when ―actors confront their

environment and their environment confronts them‖ (Brighi/Hill 2008: 118).

This process view of foreign policy can be helpful to visualize how the various core components

of foreign policy analysis go - schematically - together. This simplified model of the foreign

policy process allows to identify the most important analytical units of foreign policy analysis.

To further structure this account, and allow for a suc-cessive comparison of the assumptions IR

theories, globalization and global governance make with regard to foreign policy, we derive one

cluster of questions from each of the core dimen-sions of foreign policy:

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(1) Internal sphere: Who makes foreign policy (actors)? What type of inter-ests/objectives are

formulated and how? What are the capacities foreign policy can be built on and how can these be

used (instruments)?

(2) External sphere: Who are the actors in the external arena? What are the struc-tures that

determine how the actors typically interact?

(3) Foreign policy implementation: How are instruments applied in order to influ-ence the

external environment? Which actors and/or which structures are the objects (or targets) of

influence attempts?

Figure 2: A schematic view of the central units of analysis of traditional foreign policy analysis

External Sphere

-Actors

-Structures

Foreign Policy Implementation

-Influence attempts (Concrete use of foreign policy

instruments) and their objects

Internal Sphere

-Actors

-Capacities

-Interests

-Objectives

-Decision making

-Instruments

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2.3 GLOBALIZATION AND FOREIGN POLICY

2.3.1 Traditional Approaches to Foreign Policy Analysis and The Challenge

of Globalization

Taking the core units of foreign policy analysis as a starting point, we will now consider how

these have been interpreted from the perspectives of the classical IR theories and

constructivism6, before looking at how globalization challenges these interpretations.

Traditional views on foreign policy: the classical IR theories and constructivism

Foreign policy analysis and International Relations are linked by a ―special relationship‖ (Smith

et al. 2008b: 4): the former has regularly been influenced by concepts - such as the primacy of

nation-states - used in the classical IR theories. A very brief review of how these theories have

influenced thinking about the various dimensions of foreign policy confirms this perception.

Emphasis will be placed here on the two classical IR theories: neo-realism and neo-

liberalism/neoliberal institutionalism. Though not a theory per se, social constructivism will also

be briefly discussed, as it has informed foreign policy analysis in more recent times.

In his ―Theory of International Politics‖, Waltz, the founding father of neo-realist thinking,

refuted the idea that his reasoning could be used to build a suitable theory of foreign policy

(1979: 127-128). This view has not only been contested by the younger generation of neo-realists

(Elman 1996; Baumann et al. 2001; cf. Harnisch 2002), but the views foreign policy analysts

hold of the external sphere have de facto been strongly influenced by neo-realist premises over

the years (Wohlforth 2008). In a nutshell, from a neo-realist perspective, foreign policy is

strongly determined by the external environment, an international system characterized by

anarchy. In this system, states - understood as unitary, rational actors - interact to assure their

security (Jervis 1978). A state‘s foreign policy behaviour is determined by its relative power,

which is a function of the distribution of power in the international system, and is seen to depend

on material re-sources (military capacities, raw materials) (Mearsheimer 2007). Little attention is

paid to the domestic context.

6 constructivism is the claim that significant aspects of international relations are historically and socially contingent, rather than

inevitable consequences of human nature or other essential characteristics of world politics. (Wikipedia)

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In a neoliberal (institutionalist) perspective, the international system is also primarily an arena

for state interaction, but non-state actors and intergovernmental institutions can also play a role.

Since states strive to maximize their interests in this arena, ―cooperation under anarchy‖ (Oye

1986) or the creation of institutions through durable inter-state cooperation become feasible

(Keohane 1989). This presupposes bargaining among states on the basis of predefined objectives

(Keohane 1989), formulated in a domestic context via the pluralistic competition of interests.

The opening up the black box of the domestic context and the explanation of the link between

internally defined interests and their defence in the external arena - via foreign policy - can be

perceived as the major contributions neoliberal theorists have made to foreign policy analysis

(Doyle 2008), demonstrating in quite sophisticated ways how these arenas (might) interact

(Putnam 1988; Moravcsik 1997). Central to the formulation and defence of interests is the

emphasis on economic, in addition to military and natural resources, which makes the neoliberal

concept of power slightly broader than the neo-realists‘.

If both neo-realists and neoliberal theorists focus very much on the systemic features of the

international system to explain foreign policy behaviour, more interpretive accounts that have

emerged since the 1990s emphasize the relationship between agency and structure (cf. Harnisch

2002: 8; Checkel 1998). Moderate social constructivists oppose the ―structural perspective‖ of

the classical theories (Carlsnaes 2008: 91), introducing structurationist reasoning into the debate

(Giddens 1984; Wendt 1992). If agents and structures co-determine each other, this leaves more

space for foreign policy as (at least) the semi-autonomous exercise of agency. Moreover, con-

structivist thinking places generally more emphasis on the role of ideational factors (values,

norms) in the international arena and, consequently, also in the formulation and conduct of for-

eign policy (Adler 2002). The external sphere is, from this perspective, no longer an exogenously

given entity, but the product of the construction of intersubjectively shared meanings (―anarchy

is what states make of it‖, in Wendt‘s famous dictum). This makes foreign policy ultimately

appear as an exercise of defining and constructing ―systems of norms‖ (Finnemore/Sikkink

1998) through communicative interaction (arguing and persuasion) (Risse 2000; Checkel 2008:

76-77). Once structures have been created, a logic of appropriateness sets in, where actors

behave ac-cording to the rules that have been intersubjectively defined, as opposed to according

to the in-terest-driven logic of consequentialism that the classical rationalist theories hail

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(March/Olsen 1998). In sum, a lot of constructivist thought implicitly touches upon the level of

analysis prob-lem that neither neo-realism nor neoliberal accounts have solved: rather than

perpetuating the divide between the internal and the international, constructivists advise us to

transgress levels (Carlsnaes 2002: 342; Checkel 2008: 77-78).

In synthesis, both the classical IR theories and social constructivism have had a non-negligible

impact on the way foreign policy has been and is understood and interpreted. The legacy of neo-

realism is clearly visible in the emphasis of much foreign policy analysis on the centrality of

states and on (an often limited notion of) power. Neoliberal thinking is observable in many

accounts that focus on internal interest-formulation and bargaining as supreme foreign policy act.

At the other end of the rationalist-reflectivist spectrum, while not so much applied to foreign

policy analysis in practice, constructivism has generally made a contribution by emphasizing the

role of ideational factors and a stronger focus on the relationship between actors and structures

(Carlsnaes 2008) in foreign policy.

2.3.2 The Challenge to Foreign Policy in The Context Of Globalization

Explicit discussions of the challenges globalization poses to foreign policy are virtually absent

from the relevant literatures. It is for this reason that we will now attempt to elicit what appear to

be the most striking implications of globalization for the concept of foreign policy.

2.3.2.1 The Relevance of Foreign Policy

To begin with, globalization challenges the very essence of foreign policy: by rendering dis-

tances increasingly meaningless and altering the importance of frontiers, it blurs the distinction

between inside and outside that is central to the determination of the foreign in foreign policy.8

Nothing leads us to suppose, however, that the notion of foreign is going to disappear. On the

one hand, amid all claims about the slow erosion of the territorial organization of social life, the

nation-state has so far largely resisted change and is not bound to vanish so soon (Sørensen

2004). On the other hand, even in an increasingly de-territorialized world order, the distinction

between ―we‖ and ―the other(s)‖ will persist as long as there are cultural, linguistic and other dif-

ferences. And nothing points to the disappearance of all differences, since little evidence

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supports the idea that globalization equals universalization or, as some have claimed,

westernization (Pet-ras/Veltmeyer 2001) (Scholte 2005: 56-59). Secondly, in an era of

transformation that produces winners and losers, where political structures are changing, and

where, hence, solutions have to be found to new types of social problems, the demand for foreign

policy - an activity directed at influencing others (whoever they may be) to defend one‘s aims

and assure that one‘s own vision of the world becomes part of existing and new structures - is

bound to increase rather than de-crease.

2.3.2.2 The Internal Sphere

Globalization also provides a major challenge to the common interpretation of how foreign

policy is made, not only with regard to the locus, types of and formulation of interests and aims

of foreign policy, but also concerning the capacities and instruments needed to conduct it in a

globalizing world.

As to the actors who formulate foreign policy, the globalization literature suggests that these may

not (exclusively) be territorially organised states any more, but - in parallel to, in addition to or

instead of traditional actors - other entities, such as the European Union, whose foreign policy

will be the subject of discussion below.

Against this background, globalization obviously also entails an opening of the internal sphere

(Beck 2000). The interests of an entity will neither be exogenously given through the dis-

tribution of power in the international system, nor exclusively internally formulated via a

pluralist internal competition of social forces. Rather, interests and aims can be expected to be

increas-ingly the product of a variety of internal and external influences. With globalization

raising the awareness that what happens in distant places may have impacts on the domestic (and

vice-versa), the external may be much more present in the formulation of foreign policy goals.

At the same time, demands for foreign policies that deal in one way or the other with the

consequences of globalization, but also with its political, technological, socioeconomic, and

cultural root causes are bound to arise.

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2.3.2.3 The External Sphere

Turning to what globalization means for the external sphere, a number of considerable changes

can be detected in the international system as it has been described and interpreted in classical

accounts of foreign policy analysis (and IR theories).

First and foremost, the world is becoming more and more interconnected and multipolar in more

than one way: not only has the balance between the still important state actors altered due, in

part, to processes of (economic) globalization that have led to rapid growth in major emerging

countries like China and India, but a plethora of new (types of) actors is populating the external

arena (Humphrey/Messner 2005). Among them are the traditional intergovernmental and non-

governmental organisations (IGOs, (I)NGOs), religious movements, multi-national companies

(MNCs), but also various other new entities such as networks of scientists (epistemic communi-

ties) or of the media. This proliferation and diversification of actors has rendered the global arena

much more complex than older conceptual approaches would have it. Moreover, the growing

insignificance of borders has induced the slow emergence of a transnational civil society,

bringing together citizens and private interests across frontiers to define and defend their

common objectives (McGrew: 2005: 25).

As a result, the structures that have long been taken for granted - in a liberal view, a multilat-eral

world order characterized by international regimes and organisations (cf. Ruggie 1993) - are

eroding. In its current shape, the globalizing world is characterized by an emergent global

governance mosaic, a co-existence of spheres of (relative) order - spaces that are regulated

through inter-state cooperation in the traditional sense or informal networks of actors - and quasi-

anarchic niches that are so far devoid of effective political organisation. If a political regulation

of these spaces is desired, many of the traditional structures are in need of modernization and

completely new structures will have to be created to deal with some unseen challenges, notably

the regulation of various types of novel flows, e.g. in the communication and information

domains, and to provide ―global public goods‖ (Kaul et al. 1999).

2.3.2.4 Foreign Policy Implementation

When it comes to the question of how foreign policy is concretely implemented vis-à-vis

other(s), globalization highlights that both the focus and the objects are changing.

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Per definition, foreign policy is aimed at everything that lies outside of the entity that con-ducts

it. The changing external environment demonstrates that a concentration solely on inter-state

relations is no more sufficient. Other actors such as NGOs, MNCs and the societal dimen-sion of

global politics, but increasingly also flows and networks, hybrids between actors and structures,

demand more attention. A greater focus on these new actors, notably (organised) civil society

can be assumed to further transform traditional diplomacy. Further, globalization challenges the

focus on actors, be they old or new, only. As seen from the discussion of the external sphere, the

activity of ―globalizing structures‖ demands specific attention to the conduct of for-eign policy.

Implicitly, the globalization literature suggests that structures are bound to increasingly become

the targets of influence attempts. To play a role in the newly emerging foreign policy arena,

instruments and coherent strategies are needed that heighten the chances of an actor to impact on

all types of actors and structures.

2.3 .3 Global Governance As An Analytical Concept Applied To Foreign

Policy

2.3.3.1 The Relevance of Foreign Policy

While globalization scholars may be less articulate about the future relevance of foreign pol-icy,

global governance analysts obviously do see a place for the political in this new global con-text.

The mediation of interests between different entities through foreign policy becomes ever more

crucial - and difficult - in an increasingly complex political arena. As long as these different

entities belong to distinct communities, a line between inside and outside can be drawn and we

can accordingly also assume that foreign policy continues to play a role

2.3.3.2 The Internal Sphere

Turning to the actors, interests and aims of foreign policy in a globalizing world, states re-main

foreign policy actors, but in a global governance perspective EU foreign policy, MNC for-eign

relations or ―NGO diplomacy‖ (Betsill/Correll 2007), among others, can equally be imag-ined. It

becomes more difficult to pinpoint how and what type of foreign policy objectives are

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formulated by these actors. To start with, open frontiers and the increased transnationalization of

societies lead to a growing impact of outside interests on the decision-making within an entity.

Further, as the emerging global governance architecture is characterized by variable geometry,

the formulation of clear-cut overarching interests is rendered difficult. Interests and objectives

rather need to be geared to the specific structures and actors that form the arena or network

which deals with a particular issue. Where they used to be territorially and community defined,

they are thus becoming more and more functionally defined, In that sense, the outside might

determine to a larger extent what is considered an interest and a desirable goal by a foreign

policy actor, with-out, however, dictating the precise option that this actor has to choose. This

interpenetration of levels and of outside/inside also calls the very notion of a internal or domestic

sphere into ques-tion. The variety of organizational forms that co-exist in the global governance

arena also raise the question whether one core interest of any foreign policy actors is not to

reduce the uncer-tainty and complexity of this new context by defining the goal of rendering the

external environ-ment less ―messy‖. With the idea of greater effectiveness in mind, structure-

focussed objectives may thus loom large in foreign policy for global governance.

Regarding the capacity that foreign policy actors need to dispose of in a context of global

governance, a first necessity is to reconsider the concept of power: while central to global

governance, it now comes in many different ways. Where the bargaining about institutions was

mostly a thing of relational power in the hard, material sense in the classical IR accounts, a

systematic conversion of one‘s material power into impact on all actors and at all moments must

be considered less and less realizable in a globalized world. ―Globalizing structures‖ (Mittelman

1996) therefore requires also structural power, i.e ―the power to shape and determine the

structures of the global political economy within which other states, their political institutions,

their economic enterprises and (not least) their scientists and professional staff operate‖ (Strange

1988: 24-25)

2.3.3.3 The External Sphere

The multi-actor and multi-level nature of the emerging global governance architecture implies

that foreign policy has to deal with many - and many different types of - actors at the same time.

Further, these actors not only operate by themselves, but can be part of larger structures that

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stretch across levels. Sub-state actors can play a role in global politics, NGOs can together form

a global network operating at several levels at the same time. Furthermore, actors can come in

dif-ferent forms in different issue areas: where a state used to be a state whether the subject of

nego-tiation was trade or arms control in the past, actors can now be lone riders in one arena and

part of a powerful network in the next.

With the emergence of networks and under conditions of variable geometry, the structural

features of the global governance architecture differ a lot: partially, new structures supersede old

structures or co-exist with them, but in some areas that were rendered important by globalization

(such as public health, transnational terrorism or migration) entirely new structures may have to

be created or are emerging. Such structures can be highly institutionalized, organized according

to multilateral principles (Novosseloff 2002), or extremely informal, such as loose governmental

or private-public networks (Koenig-Archibugi 2002). The structures of global governance

become, in this perspective, more or less precise, more or less compulsive “systems of rules”

(Rosenau 2002).

All in all, global governance as an analytical concept suggests that everything is still very much

in a state of flow in this new global political arena - new actors are emerging and finding their

place in the system, new issue areas are explored, defined and regulated, old structures reformed

and new ones created. In short, as analytical perspective, global governance emphasizes that the

external sphere is much more complex than the classical view of foreign policy would admit -

and this has yet to be adequately reflected in foreign policy analyses.

2.3.3.4 Foreign Policy Implementation

Where globalization challenges the classical interpretation of the objects of influence at-tempts,

employing a global governance lens can provide us with some (preliminary) answers to what

may be needed to conduct effective foreign policy in the contemporary world.

In a context of global governance, the objectives of foreign policy require directing one‘s ac-

tions not only at states, but at the entire range of actors and networks operant at various levels in

the global governance arena. Not in the least, the focus of global governance studies on transna-

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tional relations (Brühl/Rittberger 2001: 2) demonstrates the necessity for foreign policy to target

the societal level to a larger extent.

Further, global governance studies highlight that structures cannot be taken for granted. For-eign

policy is in this perspective not just about the (pragmatic) solution of problems in ad-hoc

coalitions or established institutions, but also about the (re-)definition of problems with a global

reach and about the definition of where and how to treat these problems. As a matter of fact, the

co-existence of many forms of governance arrangements may make it necessary - in terms of

greater effectiveness - to interpret and shape these structures to suit one‘s own objectives.

In synthesis, global governance offers a perspective on world politics that has important im-

plications for the understanding and study of foreign policy. It suggests, above all, that the exter-

nal sphere has - politically - changed so much that foreign policy actors may consider

formulating different (less actor-focussed and more structure-focussed) objectives and designing

new (com-munication-based) foreign policy instruments and strategies to realize these

objectives.

The new type of foreign policy that global governance projects may not exist yet, or may exist

only to some extent, but it seems necessary to adapt our analytical categories to the obvious

changes in the way actors interact in global politics. Further exploiting the synergies between

global governance and foreign policy may help to design a more appropriate way of analysing

foreign policy in a 21st century context.

2.3.4 Contrasting Traditional and Alternative Approaches To Foreign Policy

This part of the paper has served the purpose of clarifying how the core concepts of foreign

policy analysis have been interpreted by the classical IR theories and constructivism, and how

these interpretations have been challenged by globalization. Applying a global governance lens

to foreign policy analysis then demonstrated that these challenges can part ially be met if the

concept of foreign policy is updated in line with a more differentiated thinking about today‘s

world. Table 2 summarizes the main findings by comparing the traditional way of perceiving

foreign policy to the perspective proposed by the globalization and global governance literatures,

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thus demonstrating that certain crucial features of changing world politics have so far been

neglected. Constructivism, as a meta-theoretical approach, does not fit with either of the two

perspectives. In Table 2, it has been placed on the side of the new perspectives, as it does

highlight some fairly new aspects with regard to foreign policy analysis.

We have argued that globalization and global governance do not make foreign policy obsolete,

but that they put pressure on it, demand for change and set the context for this change. Our

discussion of the classical interpretations of foreign policy and the fact that they continue to be

used in major current textbooks (Smith et al. 2008) demonstrate, however, that these still – and

despite all necessary and justified challenge - do have contributions to make to contemporary

foreign policy analysis. Everything point thus to the conclusions that foreign policy as a

complicated activity in a yet more intricate context is much too complex to be looked at through

a single lens. For the remainder of the paper, we will thus advocate conceptual and theoretical

pluralism, bringing together the various theoretical and conceptual offers discussed to develop

our own conceptual approach to the analysis of foreign policy in the 21st century.

Table 1: Contrasting traditional and new perspectives on foreign policy

Cluster Core analytical units

Traditional

perspective

(classical IR theories)

New, neglected

perspective

(constructivist reasoning, globalization,

global governance)

Internal sphere

Actors States, elites,

governmental actors

Governmental actors,

non-governmental

actors, societal actors

Interests and Goals (Bounded) rationality: definition of national

interests on basis of

―domestic‖ preferences

Interests more varied, issue specific, less

―egoistic‖, targeted at

structures, global public

goods

Decision Formulation Competition

of social forces in territorially

delim-ited space

Pluralistic competition

of multitude

of internal and external

social forces

Capacities Instruments Relational power;

traditional diplomacy:

Relational and

structural power;

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coercion and bargaining Public diplomacy;

communicative action:

arguing and deliberating

External Sphere Actors States, IGOs, non-state actors

Multitude of (types) at

multiple levels: states,

IGOs, INGOs, MNCs,

epistemic communities,

reli-gious movements,

media, societies,

individuals

Structures International institutions,

interna-tional law

Variable geometry:

formal and informal

institutions, networks,

rules

FP-Implementation Targets Other actors (states)

Multiple actors at multiple levels;

governance structures

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CHAPTER III

3. BANGLADESH FOREIGN POLICY RESPONSES IN THE

GLOBALIZED WORLD

3.1 THE UNITED STATES AND BANGLADESH

As globalization has placed the U.S. as the sole determinant of the world order and has assigned

her the seminal role in shaping the destiny of the humankind, it has to shoulder the greatest

responsibility in avoiding a course that may retract the globalization process. It is impossible to think of

the foreign policy of a country without defining its relationship with the United States.

Since the 1972 and especially after the free market policies moved Bangladesh towards closer

relations with the United States. After the restoration of democracy in 1991, relations have been

further strengthened especially during visits by Bangladeshi and American leaders to each other's

countries. United States President Bill Clinton was the first American president to visit the

country in 2000.

In the year 2008, the U.S. was already Bangladesh's most important economic partner. Bilateral

trade grew from $3.86 billion in 2008 to $4.87 billion in 2010. Even more encouraging, bilateral

trade rose 48 percent during the first quarter of 2011. If this trend continues, bilateral trade could

surpass $6 billion this year. It's even quite possible we could see our bilateral trade double in

five years (from 2008 to 2013). This is a remarkable achievement, especially given the fact that

these two countries are only slowly recovering from a financial crisis that caused a worldwide

reduction of international trade.

Based on the volume of U.S. imports from Bangladesh, it can be conservatively estimated that,

by 2010, U.S. imports helped to directly employ one million workers in Bangladesh. With U.S.

trade growing so rapidly, it is moving quickly towards supporting another million jobs. Since

each worker helps to sustain other family members, and their income indirectly supports many

other workers through their spending on the local economy, U.S. growing trade is supporting

millions of people in Bangladesh.

While Bangladesh exports to the U.S. still account for the bulk of our bilateral trade, U.S.

exports to Bangladesh are increasing even more rapidly. U.S. exports more than doubled during

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the first quarter of this year and are on track to exceed one billion dollars in 2011. This is

helping to create jobs in the U.S. while providing world-class products and services to consumers

and companies in Bangladesh.

At the same time, U.S. companies such as Chevron, GE and Conoco-Phillips are poised to

embark on major investment projects that will help Bangladesh address its energy shortages.

Chevron, already the largest foreign investor in Bangladesh, is preparing to expand gas

production in the next two years. Last month, GE partnered with Summit to sign agreements to

participate in three major power projects that will provide 1,000 megawatts of additional power

by 2013. And Conoco-Phillips is planning to explore for offshore energy resources that could

help to meet Bangladesh's long-term energy needs.

By undertaking billions of dollars in investments in Bangladesh, these companies will create

hundreds of jobs while bringing in world-class technical expertise to develop gas resources and

increase power generation. By helping to address gas and power shortages, the biggest economic

constraint in Bangladesh, these companies will play a key role in helping Bangladesh increase

economic growth and reduce poverty more rapidly.

During the past years, a steep fall in stock prices, a significant shift in balance of payments, and

increasing inflation have touched the global economy. Some of these trends have contributed to

reduced liquidity in the banking system. While these issues have created short-term economic

policy challenges, it is desired that Bangladesh's long-term outlook remains bright. It is also seen

that, despite its enormous potential and its dynamic business community, Bangladesh has not

been able to attract the level of foreign direct investment that is really necessary to increase

economic growth and accelerate poverty reduction.

Bangladesh should work with U.S. to address some of these challenges and help to further

strengthen their economic relationship. Creating entrepreneurship and a Bangladesh brand will

lift Bangladesh to a height which can make them emerge as the biggest exporter of garments

products.

In 2010 AmCham hosted a forum to discuss efforts to develop a Bangladesh brand. Progress is

seen in improving Bangladesh's image. Our growing trade speaks volumes. And the fact that

several blue-chip U.S. energy companies are poised to invest billions of dollars in Bangladesh

says a lot. The word is getting out that Bangladesh is a country with enormous economic

potential and promising business opportunities.

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Bangladesh needs to keep pace with the growth in bilateral economic relationship with U.S. as

the long-term outlook is even brighter. It is imperative that investments to increase gas and

power supply will make a big difference in boosting Bangladesh's economy. There will also be

progress on other projects to improve regional connectivity of the transportation and energy

infrastructure.

3.2 THE EUROPEAN UNION, EUROPEAN COMMISSION AND

BANGLADESH

European Union is the biggest export market of Bangladeshi readymade garments products.

Other than the garments products the European Union is a big hub for our other export products.

Besides, EU countries are playing an important role not only in our local economy by investing

on different industries, they are also making a big contribution in our economy by importing our

manpower. So, it will be a big determinant of development in the future for Bangladesh how it

takes its EU policy.

Relations between the European Union and Bangladesh have a glorious history. The EC-

Bangladesh Commercial Co-operation Agreement, signed in 1976 was replaced by a third

generation co-operation agreement in March 2001. The agreement paved the way for cooperation

on a broad range of areas including political dialogue, further developing the relationship. This

Country Strategy covers the period 2007 to 2013. It is drafted against the backdrop of the

following key challenges for Bangladesh:

A continued struggle in addressing the structural problems of poverty and to achieve the MDGs

by the target date of 2015.

Good governance problems that affect the efficient and effective delivery of basic public services

to the poor.

Potential economic and social short falls following the ending of the WTO textiles quota system

and the need to diversify the industrial base and to improve the enabling environment for

business.

Bangladesh needs to overcome the severe trade deficit it faces with the EU in the years to come

to have harmonious development situation. In the recent years, though Bangladesh has managed

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to export more products to the EU countries, the increased export has made the payment more

imbalanced.

Imports Exports Balance with EU and comparison to the world market is stated below (Billions

of Euros):

2009 2010 2011

Imports Exports Imports Exports Imports Exports

EU 5.8 1.0 6.7 1.6 8.6 1.7

World 15.9 9.3 15.3 10.3 20.5 11.0

Source: Eurostat and IMF

Table 2: Import-Export Comparison of Bangladesh with EU and World

The EU‘s strategy is grounded in the GoB‘s own response strategy to these challenges contained

in the Poverty Reduction Strategy Paper. At the same time, our strategy seeks to strike a balance

between social and economic development commitments. While we seek to support economic

growth and contribute towards the country‘s integration in the world market, it is increasingly

patent that growth alone is not enough – this is a clear message, for example, from the 2005 UN

Human Development Report – and we must also deal directly with the issues of exclusion and

poverty with a clear focus on achieving the MDGs. In order to increase the impact of our

measures and to promote greater efficiency in the use of resources, the EC will concentrate the

scope of its development commitments on three focal areas and two non-focal areas in the

changed global perspectives:

Focal areas

Human and social development

Good governance and human rights

Economic and trade development

Non-focal areas:

Environment and disaster management

Food Security and nutrition

The EC strategy must be seen as part of a broad donor landscape where donors will contribute

with diverse expertise and resources to a balanced aid package to Bangladesh. The EC‘s

commitment to donor coordination in Bangladesh is reinforced by the March 2005 Paris

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Harmonisation Conference and the decision by the majority of the donor community in

Bangladesh to develop their programmes in response to the Government‘s PRSP. The EC‘s

strategy has therefore been designed and will be implemented in cooperation with the other main

donors and in broad conformity with the Bangladesh Harmonization Action Plan which the

Government and Donors are developing in the context of the PRSP.

3.3 BANGLADESH CHINA RELATIONSHIP

China has already emerged as the most important partner of Bangladesh in the recent years.

October 4, 1975 the diplomatic relation was established between Bangladesh and China. But

after 37 years it is not only a diplomatic relationship but also a friendship between two countries.

The cooperation in Economy, Military, Culture & Education, Science and Technology and in

various sector helped to have a remarkable tie between the countries.

Li Xiannian Vice Premier of China at March, 1978 made the first ever visit by Chinese

leadership to Bangladesh. With time the relationship kept growing and in 1986 Li Xiannian

President of China visited Bangladesh and made the bi lateral relationship strong. By this time

China and Bangladesh started to maintain a close Commercial and Cultural ties and supported

Bangladesh with Military aid and Equipment.

Through the 90s the relation became closer with continuous support from China in and

cooperation in various sectors. Prime Ministers of 5th and 7th Parliaments of Bangladesh have

visited China respectively and the flow of cooperation was stable through the time. On October

4, 2000, Bangladesh Ministry of Post and Telecommunications memorial post stamp and made

the 25th anniversary of China-Bangladesh relation memorable. Chinese Ambassador appreciated

Bangladesh for consistent support towards China in various Issues and referred to China‘s

economic assistance of 1.8 billion Yuan (217 million U.S. dollars) to Bangladesh till that time.

In 2005, the Chinese Premier Wen Jiabao made an official visit to Bangladesh and both countries

declared 2005 as the ―Bangladesh-China Friendship Year.‖ The two countries signed nine

different bi-lateral agreements to increase their mutual relationship. At 2007, Bangladesh invited

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China to become an observer in the South Asian Association for Regional Cooperation

(SAARC). China has always supported Bangladesh and being a friend of Bangladesh in all

season of politics and economy. After Cyclone Sidr hit Bangladesh in 2007, China donated US$

1 million for relief and reconstruction in cyclone-hit areas.

Last year Bangladesh Prime Minister Sheikh Hasina along with an array of top ministers and key

officials has visited China. It is widely believed that with the visit the relationship between two

countries have strengthened.

China is currently Bangladesh‘s biggest trade partner. Bilateral trade reached as high as USD 4.6

billion (approx) reflecting a very sharp growth over time. From Bangladesh leather, cotton

textiles, fish are the mainly imported products by China and China mostly exports textiles,

machinery and electronic products, cement, fertilizer, electronics, raw silk to Bangladesh. Some

may notify the trade imbalance between the countries but it should be remembered and pointed

that China has kept supporting Bangladesh with various projects, aids, investments, development

policies, infrastructure, education and international cooperation. With these meaningful support

and mutual cooperation the tie between two countries keeps healthy.

Many believe that there are a lot of things that Bangladesh should learn from China in the

Globalized world. There are enormous chances for Bangladesh to develop and grow with the

support of China. The most important things that Bangladesh should learn from China are

Discipline, Unity and willingness of development. With different political situation and

education system it would not be easy to follow or develop similar policy of development as

China, but it would be made in step by step in different levels of economy and society. For

Bangladesh it is a long way to go. It is not only about support, aid and loan. It is all about

development with time and growth with cooperation. This is well expected that China and

Bangladesh bilateral relation will grow and the ―Comprehensive Partnership of Cooperation‖

will be deepen and expanded with time.

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3.4 BANGLADESH INDIA RELATIONSHIP

3.4.1 Cultural Ties

Both Bangladesh and the Republic of India have had a long common cultural, economic and

political history. The cultures of the two countries are similar. The two Indian states of West

Bengal and Tripura speak the language that is also spoken in Bangladesh, Bengali. In 1947, India

became independent from the British India of the United Kingdom and was split into Pakistan

and what is now the Republic of India. At that time, Bangladesh was known as East Pakistan,

before simply as East Bengal. In 1971, there was a war which ended with East Pakistan

becoming independent (and renaming itself to the People's Republic of Bangladesh). In this war,

Indian troops fought together with East Pakistani ones, against West Pakistan. Today, West

Pakistan is called Islamic Republic of Pakistan.

To most outsiders, the people of the two countries are indistinguishable. The cultures of the two

countries are similar; in particular India's West Bengal and Tripura states and Bangladesh are

both Bengali-speaking. Tripura is called and was known as the Chittagonian Plains of Bengal:

since the Sylhet District was once part of the Chittagong Division, during Pakistani rule. Also the

people of Tripurans formed an enclave of the eastern side of the country, so Bangladesh itself

forms an enclave of eastern side of Northeast India completely surrounded on three sides.

3.4.2 Areas of Contention

1. A major area of contention has been the construction and operation of the Farakka

Barrage by India to increase water supply in the river Hoogly. Bangladesh insists that it

does not receive a fair share of the Ganges waters during the drier seasons, and gets

flooded during the monsoons when India releases excess waters. See also Sharing of

Ganges Waters.

2. There have also been disputes regarding the transfer of Teen Bigha Corridor to

Bangladesh. Part of Bangladesh is surrounded by the Indian state of West Bengal. On 26

June 1992, India leased three bigha land to Bangladesh to connect this enclave with

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mainland Bangladesh. There was dispute regarding the indefinite nature of the lease. The

dispute was resolved by an mutual agreement between India and Bangladesh in 2011.

3. Terrorist activities carried out by outfits based in both countries, like Banga Sena and

Harkat-ul-Jihad-al-Islami. Recently India and Bangladesh had agreed jointly to fight

terrorism.

4. Bangladesh has consistently denied India transit facility to the landlocked North Eastern

Regions of India. Although India has a narrow land link to this North eastern region,

which is famously known as "India's Chicken Neck"

5. Illegal Bangladeshi immigration into India. The border is porous and migrants are able to

cross illegally, though sometimes only in return for financial or other incentives to border

security personnel. Bangladeshi officials have denied the existence of Bangladeshis

living in India and those illegal migrants found are described as having been trafficked.

This has considerable repercussions for those involved, as they are stigmatised for having

been involved in prostitution, whether or not this has actually been the case. Cross border

migrants are also at far higher risk of HIV/Aids infection.

6. Continuous border killing of Indian and Bangladeshi people, aiding illegal immigrants,

helping in armed decoity, fake money transfer and illegal drug trades by both Indian and

Bangladeshi people are the major problems between Bangladesh and India.

7. Both Bangladesh and India make claims over the same seawater at the Bay of Bengal.

Now India has proposed the settlement of the problem through bilateral talks. But,

Bangladesh is willing to have it through legal fights after a boost in the confidence as

resolved with Myanmar.

8. There was a minor glitch in their relation when Indian Prime Minister Manmohan Singh

accidentally mentioned that 25% of Bangladeshis are anti-Indian, during an informal

press meet.

3.4.3 Recent Developments

In September 2011, the two countries signed a major accord on border demarcation to end the 4-

decade old disputes over boundaries. India also granted 24-hour access to Bangladeshi citizens in

the Tin Bigha Corridor. The agreement included exchange of adversely held enclaves, involving

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51,000 people spread over 111 Indian enclaves in Bangladesh and 51 Bangladesh enclaves in

India. The total land involved is reportedly 7000 acres.

On 9 October 2011, Indian and Bangladeshi armies participated in Sampriti-II (Unity-II), a 14

day long Joint military exercise at Sylhet to increase synergy between their forces.

Though no concrete decision regarding the enclave disputes has been made out, it is positive that

the people of all the 111 enclaves of India inside Bangladesh celebrated the Independence Day of

Bangladesh on March 26, 2012. This demands a more fruitful out come from Indian side which

will lead the bilateral relation of these two countries to a new destination.

Bangladesh needs to develop a bilateral relation and improve the balance of payment situations

which Bangladesh faces a great deficit. Recently India has liberalized its strategy regarding the

trade and entry of some Bangladeshi products to Indian Market. Still in the globalized world as it

is important for Bangladesh so also important for India to increase Bangladesh‘s share in

bilateral trade relations.

Geographically Bangladesh is bounded by India in its three sides except the southern part. So it

will be convenient for Bangladesh to concentrate on export-import trade with India rather than

with some other country. India is also wanting transit from Bangladesh to reach out its land

locked eastern part. This will shape the balance in the bilateral relations of the two countries. In

the changed situations Bangladesh should earn the best from this transit bargain.

It is believed that Bangladesh has the greatest threat of military attack from India in case of a

diplomatic failure. But, alongside military security, Bangladesh must concentrate on the

environmental issues which the country is set under great threat in the recent years. India has

planned to connect the river beds to supply water to the mid Indian states for better agricultural

yield. Besides, the Tipai Mukh dam has appeared to be the mostly talked about issue in the

recent times which is under construction on the river Barak. Bangladesh needs more and sincere

political commitment for the solution to this problem.

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3.5 BANGLADESH JAPAN RELATIONS

Bangladeshi-Japanese relations were established in February 1972. Japan is Bangladesh's 11th-

largest export market; imports from Bangladesh make up 26% of all Japanese imports from the

least developed countries, second only to those from Cambodia. Common imports from

Bangladesh to Japan include leather goods, ready-made garments, and shrimp. By 2004, Japan

had become Bangladesh's fourth-largest source of foreign direct investment, behind the United

States, United Kingdom, and Malaysia. Japan's political goals in its relationship with Bangladesh

include gaining support for their bid to join the United Nations Security Council, and securing

markets for their finished goods. Japan is a significant source of development aid to Bangladesh.

In the globalized world, Japan Bangladesh relationship is one of the most important issues to be

considered by Bangladesh. The most developed country of Asia has created a great horizon for

Bangladeshi products which Bangladesh should make the best use of. Bangladesh should

maintain a good relation not only to benefit its trade and security, but also to get Japanese

support in the situations where Bangladesh will need more and more parties to be on

Bangladesh‘s side to achieve its bargains.

Bangladesh is eyeing on getting more support from Japan in the years to come. To get the best

from the globalized market, Bangladesh needs to come up with things which will make it a hub

for the Asian nations. The deep sea port is the main concern of Bangladesh and alongside this, it

eyes on the international airport.

3.6 BANGLADESH AND OTHER SOUTH EAST ASIAN NATIONS

Bangladesh has been maintaining a very good and friendly relationship with the South East

Asian nations. Recently the Rohinga issues with Myanmar and disputes regarding the Maritime

boundary have set Bangladesh to rethink its relationship with Myanmar. Bangladesh has noticed

no positive response from Myanmar with many bilateral talks performed so far. To intensify this

tension Myanmar has further added the wire fence in the border and the disputes regarding the

maritime boundary. Though it was settled by UNCLOS in the recent days favouring Bangladesh,

it is a great challenge for Bangladesh to demarcate the sea and get its share in a peaceful way.

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What Bangladesh need to emphasize in the changed perspectives of the globalized world is

attracting FDI from South East Asian nations. With Singapore, Thailand, Indonesia and Malaysia

Bangladesh has already developed a friendly relationship over the last decades. These nations are

the leaders in the region and trying to maximize their GDP growth. Their extended economic

activities will demand increased flow of labour and Bangladesh has the best opportunity if it can

use its manpower for the employment in this region. Since food security will be a big challenge

for Bangladesh in the years to come, alongside increasing agricultural produces, Thailand,

Indonesia, Vietnam and Cambodia should be kept in good terms and an emergency basis food

grain export environment should be developed with these countries.

3.7 BANGLADESH AND ITS (BILATERAL AND MULTILATERAL)

PARTNERS

3.7.1 Bangladesh: Foreign Aid

The government is aware of the fact that because of the existing international economic

environment the amount of foreign aid so essential for developing countries like Bangladesh is

fast dwindling. The conditionalities of aid are also becoming stringent. The government has,

therefore, taken appropriate initiatives for proper utilization of foreign aid. The country's

development partners at the same time, ought to acknowledge that Bangladesh not only needs

more aid but also better aid.

The government has given the highest priority to implementing with utmost efficiency the annual

development programme (ADP) which allocates domestic and foreign resources to different

sectors of the economy. From the economic and social points of view, agriculture is the country's

most important sector as it contributes 18.4 percent of GDP and about 70 percent of its 140

million people are directly or indirectly dependent on it for their livelihood. But because of

declining growth in agriculture in the past the standard of life of the small and marginal farmers

had been going down forcing the nation to become increasingly dependent on food imports.

The government has, therefore, decided to increase allocation for agriculture substantially and

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offer a wide range of incentives to the farmers including liberal credit to raise production and

generate on-farm and off-farm employment for the rural poor. An Agriculture Commission has

also been set up to recommend long-term policy reforms to boost the sector.

3.7.2 IMF and Bangladesh

IMF is one of the most influential development partners of Bangladesh. Due to its share in the

financing for making the budget of Bangladesh, it is a matter of importance for Bangladesh to

decide how much it wants influence in formulating its own policy. In the recent years

Bangladesh has remarkably reduced its share of foreign aid in percentage in the budget. But the

flow of ADP and other long term development projects has always been a concern for the

country. It is high time for Bangladesh to design its own policy regarding both monetary and

financial matters.

An International Monetary Fund (IMF) team visited Dhaka during February 7−15, 2012. It

continued discussions on the government reforms aimed at addressing the macroeconomic

pressures facing Bangladesh and building sustainable growth, for which support is being sought

from the IMF under the Extended Credit Facility (ECF). During the visit, the team met with

Minister of Finance Abul Maal Abdul Muhith, Economic Advisor to the Prime Minister Mashiur

Rahman, Bangladesh Bank Governor Atiur Rahman, Finance Secretary Mohammad Tareque,

and other senior officials, as well as with various development partners and private sector

representatives.

Bangladesh wants a massive economic reform program for which they are seeking support under

ECF. In this context, demands should be centered on the authorities‘ plans to undertake sustained

macroeconomic stabilization measures and supportive structural reforms aimed at reducing

external and fiscal imbalances, rebuilding a foreign reserve buffer, and putting Bangladesh on a

higher sustained growth path.

In support, the authorities have taken a number of upfront measures to address macroeconomic

pressures currently confronting Bangladesh. Foremost, greater exchange rate and interest rate

flexibility is being allowed, helping to absorb external pressures and transmit necessary

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monetary policy tightening, in line with achieving program objectives. Discussions also centered

on adopting an appropriately restrained fiscal policy, ensuring a continued sound debt

management strategy, and undertaking growth-critical reforms in tax policy and administration,

public financial management, the banking and financial sectors, and trade and investment

policies.

Much focus should be placed on measures needs to address fiscal pressures, which stem mainly

from rising fuel imports and associated subsidy costs, and to move forward on a new value-

added tax law, as a key plank of the reform program. With timely progress on these and other

agreed commitments, the Bangladesh authorities expect to reach an ad referendum agreement

with the IMF on an ECF arrangement in the near future.

Bangladesh needs more and more free and liberated steps from IMF in the years to come to

maintain the pace it wants in its own way. Strong negotiation with this institution and support is

a must for Bangladesh to cope the situations it faces in the perspective of the globalization and

free trade.

3.7.3 World Bank and Bangladesh

Bangladesh needs a foresight more effective to maintain a growth supporting relationship with

the World Bank. It is one of the biggest development partners of the country. World Bank

finances Bangladesh in development projects that Bangladesh takes mainly for its infrastructural

development. Over the few decades it has supported Bangladesh in various projects. Bangladesh

to the following position seeks more and more support for its ever increasing demands in the

infrastructural development:

International Reserves (US$ 11.175 billion (Source: World Bank; Data updated: November

2010)

Gross Domestic Product - GDP (US$ 115.387 billion (2009 estimate)

GDP (Purchasing Power Parity) (277.919 billion of International dollars (2009 estimate)

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Real GDP growth

Year GDP (%)

2000 5.6

2001 4.8

2002 4.8

2003 5.8

2004 6.1

2005 6.3

2006 6.5

2007 6.3

2008 6

2009 5.8

2010 6

2011 6.1

Source: BBS

Table 3: Real GDP growth of Bangladesh

GDP per capita - current prices (US$ 799 (2011 estimate)

GDP per capita – PPP($1,667 International Dollars (2009 estimate)

GDP (PPP) - share of world total

1980 1990 2000 2010 2015**

0.24% 0.25% 0.28% 0.35% 0.39%

**Forecast

Table 4: Bangladesh GDP Share in World Total

GDP - composition by sector

agriculture: 18.4%

industry: 28.6%

services: 53% (2011 estimate)

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In the recent times Bangladesh has come across a cold relation with the World Bank centering an

allegation on the Padma Bridge project. The institution has refused to provide its promised

money as it showed some marks of irregularities in the entire tendering process. It is however

denied by the government. Yet, Bangladesh must keep good terms with this institution to walk

the long way towards its development in the more challenging years to come.

3.7.4 WTO and Bangladesh

Bangladesh‘s ability to translate WTO‘s (World Trade Organization) flexibilities for the world‘s

poorest nations into trade and development outcomes is an example for all the least developed

countries (LDCs), visiting WTO DG Pascal Lamy said in Dhaka. But this is also remarkable that

if Bangladesh cannot afford to maintain the desired global competiveness its trade sector will get

a great shake in the years to come. Bangladesh has done particularly well and is well-positioned

for the future of course, if Bangladesh is to continue in its leadership role it needs leaders, a

vibrant private sector, active civil society, and profound social transformation mean Bangladesh

is poised to make the next leap to integrate into the global economy. Open markets spur

innovation and change; these ideas should be sincerely adopted by Bangladesh which is a

budding country with respect to its industries and trade. Trade position and export import

comparison of Bangladesh in the last few years are stated bellow:

Year Import (Billion US $ ) Export (Billion US $ )

2001-02 8.54 5.99

2002-03 9.66 6.55

2003-04 10.90 7.60

2004-05 13.15 8.65

2005-06 14.75 10.53

2006-07 17.16 12.18

2007-08 20.37 14.11

2008-09 21.44 15.57

Source: BBS

Table 5: Import-Export of Bangladesh

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Amid its huge trade deficit, WTO encourages Bangladesh to continue its leadership role on trade

issues among the LDCs. On Bangladesh‘s RMG sector, Economists here and elsewhere issued

dark predictions of doom for Bangladesh and its fledgling garment sector. According to WTO,

the reality has been somewhat different. Bangladesh‘s garment sector has not just survived, it has

thrived. Removing the quotas revealed Bangladesh's comparative advantage. Unilateral

preferences have also helped Bangladesh's competitive edge.

The simplification of the rules of origin governing duty- and quota-free access to the EU market

in 2010 has led to a surge in Bangladesh's garment exports. It might be true but there are a series

of factors will affect the overall trade of a growing country like Bangladesh in the years to come.

Bangladesh has got an impressive boom in the RMG sector, no doubt. But, it is not as much for

its quality as it is for the low price of its products. As for other products like medicine and the

ship building industry, which are promising here, affects will make in the changed quota free

world. If TRIPS comes in effect, the entire medicine industry will be affected by the price hike

of raw materials and payment for rights. So will be in ICT sector, which is the promising most

for the future development.

Besides, if the Intellectual Property Rights are to be followed strictly by countries like

Bangladesh, it will throw us in a big challenge as we rarely have anything that we can sell the

right of, rather in most cases, we will have to pay for the rights.

In order to enhance trade and cope with the globalized world, Bangladesh has associated with

some Regional Trade Agreements. Some Bilateral Trade Agreements (especially with Pakistan,

India and Sri Lanka) are also in offing. The overviews of those agreements are as follows:

3.7.5 SAARC Preferential Trading Arrangement (SAPTA)

To promote and sustain mutual trade and the economic cooperation among the SAARC countries

through exchanging concessions on trade measures SAARC Preferential Trading Arrangement

(SAPTA) was signed in 11th April 1993 and operationalized in December 1995 to give limited

preferential market access to exports of member countries. Since 1995 there were many rounds

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of negotiation for tariff concessions. Negotiations were confined solely to the issue of tariff cuts.

The issue of para-tariff and non-tariff measures was left out altogether. Though Bangladesh has

not been remarkably benefited from this, it has a great scope for Bangladesh in the changed

perspective and globalized market system. The member countries of the Agreement are

Bangladesh, Bhutan, Maldives, India, Pakistan, Nepal and Sri Lanka. The basic principle of

SAPTA that could benefit Bangladesh are:

SAPTA shall be based on the principle of overall reciprocity and mutuality of advantages

in such a way as to benefit equitably all contracting states taking into account their

respective levels of economic and industrial development, the pattern of their external

trade, trade and tariff policies

SAPTA shall be negotiated step by step, improved and extended in successive stages with

periodic review.

The least developed contracting states shall favourable preferential treatment

SAPTA shall include all products, manufactures and commodities.

Negotiations were conducted on product-by-product basis (positive list approach). Concessions

offered in the first SAPTA round were very modest. Only 226 products at HS 6-digit level were

conceded in that round but the number of products offered concession accelerated in the second

and the third rounds. At the end of the fourth round, a total of 6243 tariff line concessions were

exchanged, of which 3942 were exclusively for the four LDCs – Bangladesh, Bhutan, Maldives

and Nepal, as against 2301 for non-LDC members. The LDCs along with Bangladesh, thus

received relatively more favourable treatment in the exchange of tariff concessions. The depth of

tariff concession offered to LDC members ranged between 5 and 100 percent. Tariff cuts offered

by India were the deepest, varying between 25-100 percent. The SAPTA rules of origin require

non-LDC members to input at least 40 percent local material content. LDC members are required

to input at least 30 percent. Bangladesh should try to maintain a good position in this regard for

the continuous growth of its trade in this region.

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3.7.6 The Agreement on South Asian Free Trade Area (SAFTA) and Bangladesh

Since the Agreement on South Asian Free Trade Area (SAFTA) was signed on 6 January 2004 in

Islamabad, Bangladesh has been trying to make an influential emergence in this region. SAFTA

has entered into force from 1st January 2006 after completion of national ratification by all

member countries. Tariff reduction under SAFTA has started from 1 July 2006. The member

countries of the Agreement are Afghanistan, Bangladesh, Bhutan, Maldives, India, Pakistan,

Nepal and Sri Lanka.

All member countries maintain a sensitive list. Products appearing in the sensitive lists will not

enjoy tariff concessions. The sensitive lists of Bangladesh contain 1254 items for Non-LDCs and

1249 items for LDCs. The sensitive list of India contains 868 items for Non-LDCs and 480 items

for LDCs; the list of Pakistan contains 1169 items, the list of Sri Lanka 1065 items, the list of

Nepal 1299 items, the list of Maldives 671 items, the list of Afghanistan 1072 and the list of

Bhutan 157 items.

Bangladesh was benefited by the reduction of tariff to 0-5 % for LDCs in 3 years by Pakistan,

India and Sri Lanka. Such tariff reduction will be done by LDCs in 10 years. Tariff reduction (0-

5%) will be accorded to those items which do not appear in the sensitive lists.

In the changed perspectives, Bangladesh should make remarkable steps to make these facilities

friendlier for its trade boost. The general criterion of SAFTA Rules of Origin is CTH (Change of

Tariff Heading) + 40% value addition for Non-LDCs and CTH + 30% value addition for LDCs.

There is also a product specific rule for 191 items where general criterion does not apply. Under

regional cumulation rules of SAFTA, there is the provision of value addition criterion only. In

this case, the regional value addition is 50%, of which 20% has to be in the final exporting

country.

India has provided to LDCs duty free market access to all products under SAFTA (excepting the

products retained in their sensitive list) which has come into effect from 1 January 2008.

Recently India has offered duty free tariff preferences (DFTP) scheme for all 50 LDCs.

Bangladesh is considering the proposal of signing the letter of intent. Bangladesh made a

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successful duty free access of 8 (eight) million pieces of apparel articles in one calendar year

covered under the SAFTA Sensitive List of India without any conditionalities of sourcing of

fabrics or port restrictions under a Memorandum of Understanding Signed between The

Government of the People‘s Republic of Bangladesh & The Government of Republic of India on

16 September 2007.

India, Pakistan and Sri Lanka will extend technical assistance to LDC members for development

of trade-related capacity. The technical assistance will be in the forms of training, study, seminar,

workshop, export promotion projects, product development, trade policy formulation, etc.

3rd SAFTA COE and 3rd SAFTA Ministerial Council meeting was held in New Delhi on 1-2

and 3 March 2008 respectively. Bangladesh delegation took part in the SAFTA COE meeting

and honourable advisor for commerce attended the ministerial council meeting. Bangladesh

position was firmed up through an inter-ministerial meeting held on 18 February 2008 under the

chairmanship of Secretary Ministry of Commerce.

Protocol of accession of Islamic Republic of Afghanistan to Agreement on South Asian Free

Trade Area was signed during the 15th SAARC Summit held in Colombo on 2-3 August 2008

and a summary was sent to the cabinet committee on 15.10.08 for post facto approval and

ratification of the protocol. The cabinet committee approved the approval and ratification

proposal of the protocol on 26 October 2008 and this decision has been communicated to

Ministry of Foreign affairs for onward transmission to SAARC Secretariat. In the globalized

world Bangladesh‘s policy should be to capture as greatly as it can the market of this region and

get the biggest possible tariff off.

.

3.7.7 Bangladesh and BIMSTEC

Bangladesh should be more keen to making a better relationship with the BIMSTEC countries.

BIMSTEC covers a huge market and countries including India and Thailand are here in the

regional organization. So, it can be the most efficient way of developing a friendlier relationship

with these countries. Bangladesh is a new in the sectors like ICT which needs much concentrate

in the years to come. Myanmar has a strong energy reserve and in the near future Bangladesh

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will have a great crisis of energy . So, BIMSTEC can be way out to getting the extra energy to

meet the increased demand. Besides, Bangladesh has a true potential in the tourism sector which,

in this region, is led by India and Thailand. Bangladesh can get the best from this region and it

can use these countries for the publicity of the natural resources that Bangladesh has. Next,

Bangladesh can make this region a regular market for its products like garments, vegetables and

agricultural products.

3.7.8 BIMSTEC Trade Negotiating Committee (TNC) and Bangladesh

A BIMSTEC Trade Negotiating Committee (TNC) has been constituted to conduct negotiations

on trade in goods, trade in services and investment. The Committee has undertaken negotiations

on trade in goods, trade in services and investment. The BIMSTEC FTA on trade in goods was

scheduled to enter into force from 1 July 2006. Negotiations on trade in goods are yet to be

completed due to divergence in opinion. It has already held more than 20 meetings. Bangladesh

needs a strong negotiation team to reach the member countries to get highest benefit.

Under the Agreement, in case of First Track products, non-LDCs will open up their markets for

the products of LDCs in 1 year and LDCs will do the same for non-LDCs in 5 years. On the

other hand, for Normal Track products, non-LDCs will open up their market for the products of

LDCs in 3 years and the LDCs will follow 10 year schedule in order to open up their markets for

the products of non-LDCs. Least Developed Member Countries of BIMSTEC FTA will enjoy

special and differential treatment and Bangladesh should try to get the best from this.

3.7.9 Asia Pacific Trade Agreement (APTA)

After being established in 1975, the Bangkok Agreement has recently been revised and renamed

as the Asia Pacific Trade Agreement (APTA). The APTA has come into force from 1 July 2006.

The APTA contains consolidated list of tariff concessions granted by member countries to each

other. Under this agreement, China has provided 100% tariff concessions to 83 items of

Bangladesh at 8-digit level and Republic of Korea has provided 100% tariff concessions to 139

items at 10-digit level.

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3rd round of trade negotiations under this preferential trading bloc was completed in 2006. The

4th round of preferential tariff negotiations has been kicked off according to the decision of the

2nd Ministerial Council held in Goa, India on 26 October 2007. In the 4th round tariff

negotiations member countries negotiating on exchange on tariff concessions, Trade Facilitation,

Trade in Services, Investment and Rules of Origin. Bangladesh is participating to the working

groups on the framework agreements on Trade Facilitation, Trade in Services, Investment and

Rules of Origin.

To continue the preferential tariff negotiations, Bangladesh should meet with China, South Korea

and Lao PDR keeping in mind that the world is a more competitive one and getting more

competitive every day. Bangladesh delivered the request list on tariff concession to Lao PDR.

China offered tariff concessions at 50% on 1058 tariff lines, which they indicated will be

applicable to all countries. In this offer list, no special concessions were made to LDCs.

Bangladesh handed over its initial offer list to China reserving the right to alter modify it if need

be. The offer list of Bangladesh covered 78 products with margin of preference ranging from

30% to 70%. Bangladesh should not lose the simplest chance of tariff preference and

negotiations because the boost in its trade is highly dependent on these factors.

3.8 ENVIRONMENTAL CONCERNS AND BANGLADESH‟S FOREIGN

POLICY

Over the last few years the countries like Bangladesh has been the worst victim of climate

change. It has appeared to be the greatest threat to continue sustainable development with all the

threats relating the environment. The increasing industrialization has been polluting all the

elements of the nature making it tougher every day to maintain the smooth growth in the future

years. Besides, the rivers and the cities are deteriorating every year. So, it is a must for

Bangladesh to come in partnership with developed countries for technical support to combat

climate change and pollution.

It is widely believed that countries like Bangladesh have the least share in global pollution and

climate change. But, unfortunately these countries are the worst victim of its outcome. So, the

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concept of compensation comes for these countries to combat climate change. Bangladesh needs

to come up with strong bargaining to recover the compensation money.

Next, the concept of carbon trading is an innovation in the recent years. Bangladesh also has a

good prospect of earning a handsome amount from its selling of the carbon reserves. Huge

forestation and strong negotiating ability are the precondition for such a gain. So, in the

globalized world, there is no alternative of a strong and intelligent set of diplomats to hold a just

position in the challenging situations.

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CHAPTER IV

4.1 RECOMMENDATIONS

In the foregoing contexts of challenges arising from globalization, and the consequent digital and

societal divides, globally and nationally, it is imperative for Bangladesh to make the right move to

maximize the benefits from, and minimize the downscale of, globalization so as to create both a

sustainable and profitable world. The question remains: in an international system that is still passing

through globalization the challenge facing the country is how to formulate a suitable foreign policy

to ensure its growth that is both sustainable and profitable in an environment where major

decisions affecting its national life are often determined by international market forces? There are

no easy answers, as the wheels of globalization are moved by bodies such as the WTO, the World

Bank and the IMF that are controlled by the world's advanced and developed nations with the

driving motivation of marketing their own high technology, products and services among the less

advanced, developing or poorer nations like Bangladesh.

Again in this globalized world a fully finished product, no longer has one single birthmark; it has

multiple birthmarks since several countries have gone to produce it. A Compaq computer, in that

sense, is no longer entirely American, or a Toyota car fully Japanese. The final product of both

these items will have components made in several countries of the world. Put differently, unlike

the previous internationalization of things, in the globalization phase of capitalism the thing itself

is the product of the international or global market. The implications for Bangladesh can hardly

be minimized. In such a condition Bangladesh must focus on its competitive advantages in

formulating bi-lateral policies to have its share in this global product and service market.

Apart from our clothing industries success in Europe and USA a demand for Bangladeshi cuisine

is increasing in those markets. If we focus on exportation of semi-skilled manpower in catering

and cooking sector we could diversify our remittance sources and can earn a lot.

Now the world is fighting and striving for energy. And Bangladesh is looking forward to achieve

its mid-income status by 2021 which requires boosting up its economic growth to double digit

which again requires huge energy. So in such a scenario Bangladesh must be very prudent in

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negotiating with its regional and international partners regarding energy policies. Bangladesh has

already signed MoU with Myanmar and India for purchasing electricity. Again the internal

sources of energies e.g. gas, coal etc. must be used strategically.

Technology and science must get higher priority in national development planning strategy, with

IT being made a thrust sector and greater allocation of resources being made so that private and

public sectors may work hand in hand. To the same end the knowledge-cum-resources of the

non-residential Bangladeshis must be mobilized. In line with that Export of manpower must

focus on IT skill transfer. In this regard our foreign policy should be so focused to encourage the

foreign partners to establish need based technical institutions in Bangladesh to create skilled

manpower.

Economic vulnerability must be avoided by diversifying the exporting sectors. It is time that we

explore service sectors but for that bi-lateral relationships must be aligned first. Thorough

different trade shows we could attract potential markets to our service sectors.

In this globalized world our cultural heritage must be preserved and promoted through branding.

But while we must be firm in preserving our cultural heritages and national pride we must

flexible also in adapting the Good and beneficial aspects of other cultures.

Succinctly, what Bangladesh needs is a well-articulated comprehensive policy vision, based on

systemic changes—current and future—encompassing democratic evolution and governance, internal

reforms and external relations, coupled with a strategy of sustained growth that is to be pursued by a

well-meaning and forward looking leadership.

In the absence of such a vision and a proper leadership to attain those objectives envisioned with persuasive

determination and exemplary efforts civil conflicts are likely to widen and the country would

continue to grope in wilderness in an increasingly globalized world. In that case the oft-repeated aspiration

of'emerging tiger' or of 'Sonar Bangla' will remain highly illusive and a distant dream.

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4.2 CONCLUSION

In the context of massive change in all aspects like global security, trade and commerce,

competitiveness and relation-building, Bangladesh needs to formulate policy assuring the

secured flow of elements to maintain a smooth and desired growth rate. Since the emergence of

Bangladesh as a strong competitor in the global market, has drawn the attention of buyers in

various markets regarding quite a few products, it should be the basis of all policies that it will

emphasis on henceforth. It is high time Bangladesh came out of its wide dependency on foreign

aid and concentrate on collecting more and more remittances by means of its huge manpower.

The huge deficit in foreign trade can only be balanced by producing more products and services.

Industrialization is a must to poise the export graph from the negligible variation to a more

product diversity. The increased demand of food has left grounds to be thought whether to

damage the environment to produce more food grains conventionally and throw the whole

process of future development at risk or to make a way out towards a more effective and

friendlier way of production to make it sustain.

Not only should Bangladesh aim at formulating financial and commercial policies with the

globalized world, but it should extend cultural, military and environmental emphasis for the

overall and complete security of the country. The security at the Bay of Bengal is one of the most

significantly felt necessities that the country should maintain as it can open a new horizon to the

nation‘s increased demand of minerals including energy.

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