Group Members

No. | Name | Id | 1. | MD. Jakir Hossain Kiron | 1321558 | 2. | Kamrul Islam | 1320013 | 3. | MD. Ahsan Kabir | 1320848 | 4. | Mohammad Mazbahul Islam | 1320417 | 5. | MD. Tareq Islam | 1220229 | | | |

Letter of Transmittal
April 03, 2015
Mehadi Mansur
Lecturer, School of Business
Independent University, Bangladesh.
Bashundhara, Dhaka-1212

Subject: Submission of Report.

Dear Sir,
It is indeed our pleasure to submit the report titled ‘Impact of Globalization on Developing Countries Income Distribution’to you for your kind appraisal.During information collection, we got support by many other sources and we also got huge amount of support from you when we prepared the report. The experiences we have gathered will be very helpful in our professional life.

We believe, this report will be quite interesting and fulfill your expectation. We have tried to give our best efforts to prepare a comprehensive report. We will be grateful if you accept our report and your kind consideration will be highly appreciated.

Sincerely Yours,

Group Members of "Group No: 03"

Acknowledgement
This report would not have been possible without the dedication and contribution of all the researchers of our group members.

In IUB we studied the subject “International Business” as a part of our course. We went through the textbook, according to the syllabus. Hence, we are grateful to our course instructor Mr.Mehadi Mansur for describing the topics clearly and repeatedly in the class. A clear concept is the first step to be involved in making any kind of report and practical analysis. While preparing this report it was very helpful for us to work with the topic. Moreover, without Sir,Mehadi Mansur assistance and guideline completing the report was not possible whatsoever.

Introduction
Globalization means the worldwide movement toward economic, financial-trade, and communications integration. Itis a source of both hope and apprehension. It impacts on developing countries economic income distribution playing a vital role on it. Developing countries like Singapore getting much benefit of it. They take their country in a new level through it. Now, their economy is in a standard position. Their unemployment rate is also very low. And income of people’s getting higher day by day through globalization. Moreover, countries like China, Malaysia and India got standard economy from globalization. And these countries are equally contributing their income distribution too. From this report, we can understand the impact of globalization on these developing countries income distribution. Now, we provide a map of developing countries which shows that where developing countries is situated:

Sec:1 How developing countries view globalization
There is no point to a globalization that reduces the price of the child’s shoes, but costs the father his job” - This is the catchphrase used in the report prepared by the World Commission on social dimension of globalization. Globalization in most developing countries has been received with mixed conceptions. There are arguments that welcome globalization and there are others that view globalization as a threat in various ways.

Globalization in most developing countries is viewed as a reality. The World Commission report on the Social Dimension of Globalization (argues that although there could be negatives of the present model of globalization, still globalization is a reality that makes it necessary for countries to adjust policy priorities to deal with it (“the outside world can do without us; but we can’t do without it”). Kiely, R. asserts this when he argues that „the new information technologies essentially allow existing social processes and interaction to occur more quickly‟ and this is a reality that many developing countries have all witnessed.

Most developing countries see power in globalization which is driven by various forces like economics, technology, politics and the like. The expression, „sleeping on sea shore and being caught by strong wave‟ as expressed by an Egyptian participant (The World Commission report on the Social Dimension of Globalization is an indication that globalization is viewed differently – it can see as frightening, stimulating, overwhelming, destructive or creative, depending on how each individual or country specific scenario.

There is a common view that globalization has brought widespread sense of instability and insecurity. The authors (Thomas, A., & Allen A.,) says that globalization is uneven and therefore it compounds such insecurities as it would appear that the strong are becoming stronger and the weak weaker and also the global poverty and exclusion continue to rise. This can be also witnessed when a security issue in one region affects the wellbeing of other regions, for example the 9/11 bombing became a global issue on the war against terrorism and analogically, similar kind of events in developing countries pose a great threat in terms of security and stability.

There is a common concern in developing countries in respect to the impact of globalization on culture and identity. Some see globalization as a threat to traditional institutions such as the family and the school, or threatening the way of life of whole communities due to influence it has in life generally facilitated by technology advancement. Others see benefits in overturning traditional ways and developing modern attitudes, and reference in regard to this can be gender equality which traditionally is said to favor men than females. On the other hand Islamic regimes sought to exclude news, films, music video and restrictions on internet as a way of resisting globalization which is thought to infringe Islamic value and identity.
There a number of other common issues in respect to globalization in the developing countries such as the question of employment where underemployment is rising up. The migration of people from one country to another has been made easier by globalization process and all this common in developing countries.
Sec: 2 Impact of globalization in the world economy
Globalization have both positive and negative impact on the world economy. Critics says that it has been estimated that positve impat about 30%, negative impact about 50%. Now, we only describe thepositive and negative impact of globalization on devoloping countries under income distribution:

Sec: 2.1Impact of globalization on developing countries
This point evaluates the positive impact of globalization on income distribution in the developing nations in the following proportions:

1- Economic and Trade Processes Field
2- Education and Health Systems
3- Culture Effects
4- More wealth equality throughout the world
5- Stabilized security
6- Increased competition
7- More efficient markets

1- Economic and Trade Processes Field

So what do we understand by income distribution that how a national total GDP distributed among total population. Here in the case of Economic and Trade Processes how it works actually that with the help of globalization worldwide affect it also affecting developing countries because its economy is going further and how it works it will be better to give an example that – India have great economy conditions because of globalization because they can export and import like others, as they are bigger than others they have more productions so there chance to earn money is more and this money is using for further investment and India have huge population ,more people are getting jobs and more transactions in the market .so overall whole economy is getting the advantage.

2- Education and Health Systems

One of the best positive affect of globalization is education and health system development and how its go with income distribution that is it will be better to give a example of Bangladesh because as you can see how globalization changing our health and education sector , every year many student going to different countries from Bangladesh for higher study because of globalization and how it affects income distribution are those students exchanging money with foreign currency in Bangladesh Bank and in return Bangladesh Bank getting lots of domestic taka and they further lend those money in financial institution and get profit and govt. using those profit doing development activities for the people of Bangladesh .
And how it affects in health system through income distribution is as Bangladesh still bring health instruments from other countries so they get currency from Bangladesh and that will help those countries people to income and in return what Bangladesh get is better assurance for health development facilities so we can see that how globalization help to fulfill people demand throughout the world.
3- Culture Effects
During the season Of IPL many foreign tourist from different countries come to watch matches and they bring foreign currency to use and that’s how foreign money enter not India not only those money they bring , they also bring culture from their country that’s how culture also shared and globalizations work in that way .

4- More wealth equality throughout the world
Globalization affects makes people wealthy in every countries especially in rich countries as a benefit the people of developing countries also get benefited because the reason is as we can give example of Bangladesh and Norway that Norway telecom company come to Bangladesh because they have money but they have no customer there so as using the globalization process Telenor come to Bangladesh to do telecom business ,as you can see they are the biggest company in telecom sector in Bangladesh and they create the opportunity for thousands job here and people are earning ,they have top to field level employees and as they earned so income is distributing among the people and indirectly many people are earning as a result of globalization process .
5-Stabilized security
When your economy depends largely on another country’s economy, it is hard to imagine either one of the countries attacking the other. In a weird sort of way, globalization helped heighten world security. Although this may seem kind of twisted since there is so much violence that still goes on in the world, the fact remains that globalization has halted many conflicts that could have turned ugly if their country’s financial health didn’t depend on the other. How stabilized security affects in developing countries through globalization process are:
As an example we can give that Bangladesh import large amount of security materials from different countries include China, Russia and U.S.A mostly. The number of currency is given to those countries and people of those countries are benefited indirectly because of globalization process and to use those security materials organization hire people and they got payments so this distribution of income works in the scenario of developing countries.
6. Increased competition
Globalization makes world more competitive than ever ,because flexibility in everything as an example we can give that in Europe Union there is the flexibility that people can move without any obligations in EU ,so people where lack job they moved to another EU countries to get job and paid .so globalization allows people to income even if they are unemployed ,so the income is distributed to other countries people through this .
7. More efficient markets
Efficient markets should be what every economy strives for. Essentially, the sign of an efficient market is where there is an equilibrium between what buyers are willing to pay for a good or service and what sellers are willing to sell for a good or service.If you can improve the way you produce a good or service by doing things such as outsourcing certain processes or buying from an overseas supplier that offers discounts, you can then afford to lower your selling price which results in increased demand and affordability. Even if businesses don’t lower prices, they can make additional profits and then reallocate that excess profit into doing things like increasing wages, taking on more investments or even creating more expansion projects.
Negative Impact of globalization on developing countries: * The growth of international trade is exacerbating income inequalities, both between and within industrialized and less industrialized nations * Global commerce is increasingly dominated by transnational corporations which seek to maximize profits without regard for the development needs of individual countries or the local populations * Protectionist policies in industrialized countries prevent many producers in the Third World from accessing exportmarkets which also effect in the national economy or income distribution on that country * The volume and volatility of capital flows increases the risks of banking and currency crises, especially in countries with weak financial institutions. * Competition among developing countries to attract foreign investmentleads to a "race to the bottom" in which countries dangerously lower environmental standards. * Cultural uniqueness is lost in favor of homogenization and a "universal culture" that draws heavily from American culture on that basis one country can lost their potential gain from culture. For example: Doremon carton much effect on Bangladeshi culture. * Globalization operates mostly in the interests of the richest countries, which continue to dominate world trade at the expense of developing countries. The role of LEDCs in the world market is mostly to provide the North and West with cheap labor and raw materials.

* There are no guarantees that the wealth from inward investment will benefit the local community. Often, profits are sent back to the MEDC where the TNC is based. Transnational companies, with their massive economies of scale, may drive local companies out of business. If it becomes cheaper to operate in another country, the TNC might close down the factory and make local people redundant
Sec: 3Impact of Globalization on Income Distribution in the Developing Economics (Focus on China & India)
3.1 Income Inequality within China and India
There is ample evidence of rising income inequalities within China and India, as also in many other countries including some in the developed world. Most studies find that rising global inequalities stem from differences in income growth between the urban and rural sectors in both India and China, though this has coincided with rises in overall income per capita. Milanovic and Wade have both identified this as one of the major factors explaining rising international income inequality. Even with a reduction in absolute poverty, rising income inequalities between sectors and rising or even constant income inequalities in general should still be a matter of concern.
So the argument that if one-third of the world's population is apparently doing well, it indicates that the world is also doing well, is compelling but not conclusive. Firstly, not all of that one third may be doing that well. Secondly, the rest of the world, especially the African countries, the erstwhile USSR and the East European countries are doing much worse and that has to be a matter of great concern. As poverty estimates show, the largest number of the world’s poor is now in Africa. Two countries, which happen to have large populations, cannot change the reality of the huge disparities that exist between a few rich countries and numerous small, backward ones.

3.2 Income level in China and India
Economic growth and income growth is the foundation of income distribution and equality. It is very clear from our table that the GNI per capita in China, at US $1800, was nearly one notch higher than the corresponding Indian level of US $750 in 2006. Undoubtedly, income growth is one thing, income distribution is another, and both of them do not act together spontaneously, which means that equality does not occur automatically.
Now, we give income level of China and India through 1990-2006 | 1990 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | China | 320 | 840 | 900 | 970 | 1100 | 1270 | 1320 | 1800 | India | 390 | 450 | 460 | 470 | 540 | 590 | 630 | 750 |

Source:World Bank, World Development Indicators Database, 2005
3.3 Inner-urban Income Inequality in China and India

As we know India and china are one of the powerful developing countries and probably world’s future power holder but actually because of globalization the scenario is changing in these two countries because more and more people who are rich they become more rich and the poor become poorer. A statistics said that 16 crore people are suffered from hungriness and china have world largest population so it’s very hard to actually verify it. So the point is in urban area doesn’t mean that everybody income is good, their income is vary to each other and the gap is big , the income inequality is not stable ,here rich people are satisfy themselves with all the satisfactory things butt middle class people and poor people also suffering because of low income.

3.4 Inner-Rural Inequalities in China and India
Inner rural scenario is one type of people have more money ,usually in both countries rural people are farmer and among them some of are very rich and some of them are borrow land from others with lots of interest rate and that’s how they have to share what they earn and one group of people become richer and other group of people are hardly living .so reality is rural people are also suffering from income inequality.
3.6 Economic growth, employment, abnormal income and urban inequality in China and India. Because of globalization economic growth is all over the India and china, they both have world largest population and still they manage to develop with the overload of people. But unemployment rate in these two countries is still high

Conclusion
In this report we talked about the income distribution of developing countries through globalization. We analyzed about India and China’s income distribution and we explained about their income distribution with the help of references. Then we tried to find out the positive and negative impact on income inequality, income level, environmental issues, price hiking, cultural consequences, health etc about the developing countries. And we tried to give some relevant examples of analyzed data which makes our perfect.

References 1. http://oilprice.com/Finance/the-Economy/12-Negative-Aspects-of-Globalization.html 2. http://www.bbc.co.uk/schools/gcsebitesize/geography/globalisation/globalisation_rev5.shtml 3. http://papers.ssrn.com/sol3/papers.cfm?abstract 4. http://www.networkideas.org/feathm/aug2002/ft19_Globalisation_Survey.htm 5. http://www.asianscholarship.org/asf/ejourn/articles/Quan%20Heng2.pdf