Economic Globalization and Export Processing Zones in Bangladesh

Proliferation of export processing zones, spurred by their potential to promote industrialization, economic development, attract foreign investment and employment opportunities, has become an instrument of the economic globalization process. This chapter finds that while the increasing number of developing countries establish EPZs for attracting foreign investment and creating employment opportunities through offering various incentives and exemptions, including lowering labor and environmental standards for investors, these economic zones have been criticized for their enclave nature as they are regulated by differential rules that exclude the application of the general labor law framework and international labor standards. They are also criticized for low wages, poor working conditions, and the absence of labor rights, especially freedom of association and collective bargaining. There are also growing social and environmental concerns as setting up these zones requires the acquisition of large areas of land, which may lead to displacement and environmental damage. EPZs in Bangladesh have attracted investment in labor-intensive industries like RMG due to the abundant supply of cheap labor, a favorable investment climate, and an enabling legal framework. However, the legal framework governing EPZs is not fully consistent with international standards, particularly in the areas of trade unions and collective bargaining.