Globalization and Its Impact on Poverty Reduction
Globalization and its Impact on Poverty in Pakistan
Sohail J. Malik Ph.D. Islamabad May 10, 2006
The globalization phenomenon
• Globalization is multidimensional and impacts all aspects of life
– economic social, cultural and political.
• globalization in production and labor markets is leading to increasing outsourcing of parts, components, and services • the drive towards market liberalization has rapidly accelerated the pace of globalization during the past decade.
From Globalization to Poverty Reduction ……….
• The whole process is predicated on increased efficiency arising out of the international competition. • Requires the poor to constantly seek to improve their skills and human capital. • Investment in Quality control and standards • This also requires a set of specific interventions by the Government. • Increasing competitiveness is at the heart of the whole process.
This requires……………………
• Competitiveness of the domestic enterprises in the global economy • Reasonably good investment climates in which firms can startup, prosper and grow • Good governance
– – – – control of corruption, well functioning bureaucracies and regulation, contract enforcement, protection of property rights .
• Strong forward and backward linkages of markets within a country and globally – e.g. transport and telecommunications infrastructure - not just for a good investment climate but also for including the poor. • Proper ‘management’ of the process of reform including sequencing of reforms
Also requires social safety net policies to catch the marginalized
Because • the process by definition produces winners and losers • the inability to protect the losers can not only increase the damage • It can shatter national confidence and lead to a reversal towards protectionism
Competing in the globalized world requires
• new institutions and processes. • a new “culture” of doing business • increasingly sophisticated research requirements in order to
Sohail J. Malik Ph.D. Islamabad May 10, 2006
The globalization phenomenon
• Globalization is multidimensional and impacts all aspects of life
– economic social, cultural and political.
• globalization in production and labor markets is leading to increasing outsourcing of parts, components, and services • the drive towards market liberalization has rapidly accelerated the pace of globalization during the past decade.
From Globalization to Poverty Reduction ……….
• The whole process is predicated on increased efficiency arising out of the international competition. • Requires the poor to constantly seek to improve their skills and human capital. • Investment in Quality control and standards • This also requires a set of specific interventions by the Government. • Increasing competitiveness is at the heart of the whole process.
This requires……………………
• Competitiveness of the domestic enterprises in the global economy • Reasonably good investment climates in which firms can startup, prosper and grow • Good governance
– – – – control of corruption, well functioning bureaucracies and regulation, contract enforcement, protection of property rights .
• Strong forward and backward linkages of markets within a country and globally – e.g. transport and telecommunications infrastructure - not just for a good investment climate but also for including the poor. • Proper ‘management’ of the process of reform including sequencing of reforms
Also requires social safety net policies to catch the marginalized
Because • the process by definition produces winners and losers • the inability to protect the losers can not only increase the damage • It can shatter national confidence and lead to a reversal towards protectionism
Competing in the globalized world requires
• new institutions and processes. • a new “culture” of doing business • increasingly sophisticated research requirements in order to