Since independence in 1971, Bangladesh has relied on foreign aid as its major source of external finance. According to the Ministry of Finance of Bangladesh (2003, 2012), from 1971 to 2011 over US$54.5 billion in foreign aid has been provided to Bangladesh. Much of this aid has come from major international institutional donors such as the World Bank and the International Monetary Fund (IMF) and has been provided on the condition that the government commit to several reforms. One condition has been that the Bangladeshi government privatise its state-owned enterprises. To execute the privatisation programme efficiently, the Privatisation Commission of Bangladesh was formed in July 2000. According to this Commission (2010b, 2014), a total of 38 state-owned enterprises from seven government corporations were privatised by the Privatisation Commission during the period July 2000 - July 2014. By 2014, however, of the 38 privatised organisations only 14 were fully operational, while 20 had closed, three had changed businesses, and one was partly operational.
This thesis examines the arguments for and against privatisation as a condition of aid, in particular focusing on the impact of privatisation on Bangladeshi factory workers. Unlike most research on this topic, this thesis has gone beyond evaluating aid agency-directed privatisation in terms of its effects on profitability and other more readily quantifiable measures of economic performance, and looks more closely at the impact of privatisation on workers themselves. To do this the thesis presents the findings of five in-depth case studies on fully operational privatised state-owned Bangladeshi firms in the manufacturing industry that have been privatised by the Privatisation Commission and compares these cases with five government-owned and five privately-owned organisations that are comparable in terms of industry and size. The case studies focus on the impacts of privatisation in terms of effects on workers’ quality of working life. And, workers’ quality of working life (QWL) are analysed according to the eight major conceptual areas of Walton’s QWL model (1975).
The research finds that workers’ compensation, job security, access to trade unions, and leave entitlements in most privatised case study organisations are less than their counterparts in comparable state-owned and privately-owned organisations. The study also finds that most privatised organisations have taken slightly better initiatives to develop staff capacities, though workers’ health and safety at work, social integration, and social relevance of working life are not significantly different to those in the state-owned and privately-owned organisations.
These findings have important implications for the privatisation programmes in Bangladesh as the findings raise issues for those that wish to pursue the uncritical application of privatisation schemes. The findings highlight how these schemes are based on assumptions, broadly informed by neo-classical interpretations of economic development and subscribed to by major institutional aid agencies such as the World Bank and IMF, that private ownership leads to improved profits and private sector-led growth which, by extension, improves workers’ conditions. This thesis argues that there is a need to reassess this approach through greater appreciation of the perverse affects of privatisation and renewed efforts to develop an approach that is more sensitive to the Bangladeshi context.