GLOBALIZATION OF ECONOMY IMPLICATIONS ON DEVELOPING COUNTRIES AND PAKISTAN

Abstract

This study investigates and explores meaning and process of globalization, the implications of globalization on developing countries, its positive and negative effects on the economical development and the role of international financial institution for the promotion of globalization. The study also highlights globalization influence on the economy of Pakistan. To gather the needed data, number of articles, economic survey, World Bank survey, economic books was analyzed. The important points from these sources were also quoted in this study as reference to the context. In order to enhance this study an interview was also conducted with an honorable and admirable dean of Institute of Business Administration (IBA), Dr Anwar Ali Shah G. Syed, who adds a lot more effectiveness to this study. Globalization is a phenomenon which includes economic, social, cultural, political almost all aspects of human life. It can be exceedingly empowering and coercive. As an extreme form, economic globalization means that economic life is totally determined in a worldwide context. It is actually the rapid growth of linkages and interconnections between nations and social communities that make up the present world system. Globalization has many aspects e.g. positive, innovative and dynamic; all of these are associated to the increased access to capital, improved market access, and increased access to technology and information which have led to greater income and employment opportunities. The liberalization of trade and integration of financial markets contributed the Economic globalization taken place so rapidly. At the same time as the whole world has benefited from globalization, there are negative and marginalizing aspects of globalization. These are what have directed to a criticism, as it is reflected by civil society act and by increasing expressions of dissatisfaction at the governmental level. It has also been examined that currently, most developing countries want to profit from globalization in the form of increased foreign trade, foreign direct investment, foreign aid and international borrowing. On the other hand globalization also raises problems in these countries. The problems are often related to the consequent fast structural changes in the economies. Other problems are widening disparity in incomes, decreased employment, financial volatility, unbalanced distribution of profit, more human insecurity and many others. In Pakistan, impact of globalization is on almost every sector. The economic performance of Pakistan since integration with the global economy can be characterized by an increase in GDP growth rates, decline in import duties, and an increase in FDI. On the other hand Pakistan's economy is also been affected because of many factors as a result of global economy like unemployment, corrupted government personnel, unequal distribution of wealth and aggregation of wealth within few hands. This research hopes to provide readers an overview of globalization and the influence over the developing countries and Pakistan. I start, in the first section, by attempting to identify the concept of globalization and providing of description of what it is about. In the nest section, I enlighten the role of international financial institutions in promoting globalization. Then in the third section, I provided literature review that supports my research work exclusively. Subsequently, I presented the characteristics of less developed or developing countries along with the impact of global economy over them. Finally I discussed all the possible consequences on Pakistan followed by conclusion and recommendations.