Globalization is the system of interaction among the countries of the world in order to develop the global economy. Globalization refers to the integration of economics and societies all over the world. Globalization involves technological, economic, political, and cultural exchanges made possible largely by advances in communication, transportation, and infrastructure.
CAUSES OF GLOBALIZATION
The origin of globalization can be traced back till the 16th century when the West started to explore and discover for the new worlds and continents, bringing the English to India in form of East India Company, there first multinational was born for us and the rest is recorded ...view middle of the document...
PAKISTAN’S EXPERIENCE WITH GLOBALIZATION
Pakistan liberalized its economy as part of the structural adjustment conditionality’s of the IMF program and World Bank lending. Pakistan’s expansion in trade has not been as spectacular as that of some of the fast globalizes. Pakistan’s exports merchandize exports have not kept pace with that of the rest of the world.
Pakistan’s experience with globalization between 1990 and 2002 has not been great. Pakistan’s share in the world merchandize exports has fallen from 0.16 to 0.15. China’s share in world merchandize exports went up from 1.80 to 5.04. Malaysia’s share in world merchandize exports has increased from 0.85 to 1.44
GLOBALIZATION AND RE-INDUSTRIALIZATION IN PAKISTAN
Originating from free-trade doctrine, some opinions claim that Pakistan, under globalization, should forget about possibilities of a new wave for industrialization altogether. Though controversial, the claim also argues that the East Asian ‘Gang of Four’ days are over, and globalization - meaning flow of foreign direct investment (FDI) and openness - will determine whether the country can industrialize or not. Such arguments also advise that Pakistan should try to attract FDI through the policies of liberalization, deregulation, and privatization. Most importantly, the government has to be cut-to-size and be kept out of markets in the process.
However, on the opposite side, forceful voices originate from at least two quarters, which at a certain level are mutually supportive approaches to long-term economic development. Broadly speaking, one is new institutionalize political economy and the second is new growth and new trade theory
the moral of the story is that industrialization under globalization for long-term economic development is too important an activity to be left to blind forces of FDI and openness.
All three sectors, first (government), second (business), and third (civil society) must work together towards achieving national development objectives and strengthen national institutions. Each sector can contribute a set of competitive advantages.
GDP GROWTH RATe:
Pakistan’s experience also shows that in the decade of 1990s, significant trade liberalization was accompanied by a steady decline in the GDP growth rate, from 6.1% in the 1980s to 4.5% in the 1990s. Similarly, wide-ranging policy changes and incentives to encourage foreign investment did not lead to any significant increase in investment, apart from larger investment in the private power sector in the mid-1990s in response to a very attractive incentive package. In fact, overall investment declined from about 19% of the GDP in 1989-90 to only 15% in 1999-2000. Even on the export front, the trade performance has not been satisfactory. Despite substantial reduction in tariff rates, removal of virtually all non-tariff barriers and successive devaluations of the currency (leading to an annual depreciation of about 10% in the exchange rate, from Rs...