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THE IMPACT OF GLOBALIZATION ON GROWTH AND POVERTY ALLEVIATION IN DEVELOPING COUNTRIES

CHAPTER ONE

INTRODUCTION

1.1     Background of the Study

Globalization can be described as the rapid integration of economies and whole markets, intensified financial flows, the information revolution, and cross-cultural currents. It can also be defined as the restructuring of global capitalism, characterized by the increased profile of international financial institutions, corporations and technology.

Kwanashie, Mike (2003); stated that economic globalization is a historical process, which is a result of human innovation and technological progress. This concept “globalization” is an increasing and encompassing phenomenon and it involves the movement of labour and technology across international borders. The concept of globalization has robust theoretical underpinning, the resurgence of lasses-faire economic theory explained these facts, it encapsulates both a description of changing patterns of work trade finance, and overwhelming conviction that deregulated markets will achieve optimal outcomes for growth and human welfare. The myths surrounding globalization IS the expansion of global economy, which is synonymous with an improvement in human welfare.

According to Taiwo, (2001); is of the view that poverty alleviation is a word that has been bandied around by Nigerian leaders of government since the return of democracy in 1999. They frequently mention these words as a mark to show their commitment towards providing a better life for the people. But it appears to me that many Nigerian leaders do not understand what it takes to alleviate the suffering of the poor masses of the country. Their programmes for poverty alleviation can hardly build people’s lives and provide them with better living conditions. Little wonder many Nigerians are still trapped in poverty despite government poverty alleviation programmes across the country. There has been no improvement in the fight against poverty and this is widespread that it requires no proof.

Nigerian leaders need to take a clue from the western world on measures taken to reduce their people’s suffering. These countries have been able to achieve the desired results through the provision of welfare programmes and leverage, provision of jobs, affordable health care and counseling, investments in public schools, building affordable houses, debates on teenage pregnancy, police protection (state policing); parenting and literacy programmes etc. Nigerian government could only alleviate poverty by adopting this approach to’ eradicate the poor conditions of many Nigerian. Any government that is sincere about alleviating the suffering of the people be it at the federal, state or local government levels should begin to work in line with the above mentioned programmes in order to achieve results.

However, it is very vital to point out that globalization does not just exist as an entity on. its own but it .is developed in many other concepts like commercialization, privatization, and deregulation. There have been several campaigns, symposium and seminars nationally and internationally urging countries of the world to trade (whether within and across borders and as such agitating for world economic development.

1.2     Statement of the Problem

The globalization of the world economy brings Immense benefits to countries that are able to harness the resulting opportunities to the proper development of their human resources. ‘Though, globalization is actually making Nigerian economic development easier and less costly to the economy as a whole by bringing the benefits of capital flows, technological, innovations, and lower import prices but the gains are distributed unevenly among countries which make some groups to lose out especially the Third World Countries like Nigeria.

However, the strongest gains have been reaped by the advanced countries and the income gap between high income, and low income countries have grown so wide that majority of the citizens of low-income group live in abject poverty.

Nigeria as a country has ‘not been able to reap fully fruit of globalization because the factors that serve as engine of globalization are underdeveloped. For a country like Nigeria to complete globally, there must be government alleviation programmes, constant electric power supply, advanced in technology and innovation, development of Nigerian manufacturing sectors and the general restructuring of all other sectors to complement the viable sectors.

The major problems that have crippled Nigeria economy over the years have been problem of dumping. Foreigners have taken advantage of our manufacturing sector and such imports various goods both durable and consumables into our economy. This has brought about a great challenge for the domestic products who apart from political instability, economicfactors and financial constraints been made ineffective.

However, the major reason for the study of this research is to examine how globalization affects Nigerian economic development as a whole.

1.3     Objectives of the Study

The aim of this study is to examine “The Impact of Globalization on Growth and Poverty Alleviation in Developing Countries”. The following .are the specific objectives of the study:

1.    To examine the impact of globalization and poverty alleviation in developing countries like Nigeria.

2.    To examine the causes of poverty in developing countries.

3.    To examine the effects of globalization and poverty alleviation programmes in developing countries using Nigeria as a case study.

1.4     Research Questions

Therefore, the statements of problems are stated below by finding answers to the following questions:

1.    What are the impacts of globalization and poverty alleviation to Nigerian economy?

2.    What are the cause~ of poverty in developing countries using Nigeria as a case study?

3.    What are the effects of globalization and poverty alleviation to economic growth of Nigeria?

1.5     Research Hypotheses

Based on the research problems and objectives of the study, the following hypotheses have been formulated for subsequent verification;

Hypothesis One

§  Ho: There is no significant relationship between globalization and poverty alleviation in developing countries.

§  HA: There is significant relationship between globalization and poverty alleviation in developing countries.

Hypothesis Two

§  Ho: There is no significant relationship between globalization and causes of poverty in developing countries.

§  HA: There is significant relationship between globalization and causes of poverty in developing countries.

Hypothesis Three

§  Ho: There is no significant relationship between globalization and effects of globalization to economic growth of Nigeria.

§  HA: There is significant, relationship between globalization and effects of globalization to economic growth of Nigeria.

1.6     Significance of the Study

It is generally accepted fact that globalization is global and dominant-In the world, today. The differences· in the socio­economic development across nations are attributed much to the development of the concepts of globalization and poverty alleviation in developing countries like Nigeria. In view of the above the importance of this study will includes:

1.    Globalization has become a “threat to the poor rather than an opportunity for global action.

2.    Many economists and policy maker analysts argued that globalization particularly the increase mobility of international financial capital, has undermined the ability of countries “to engage in independent macroeconomic policies, whether fiscal or monetary policies.

3.    And implications of this are that government is less able to insulate programmes to alleviate poverty and their economies from the adverse effects of trade.

4.    Any government that “is sincere about alleviating the suffering of the people be it at the federal, state or local government levels should begin to work in line with the above mentioned programmes in order to achieve results.

1.7     Scope of the Study

The study shall focus on the impact of globalization on growth and ‘Poverty alleviation in developing countries using Nigeria as a case study. This study additionally identifies the impact of globalization, the causes of poverty in developing countries, the effect of poverty alleviation and globalization to economic growth of Nigeria using Nigeria.

1.8     Limitations of the Study

Financial constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

Time constraint: The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.

1.9     Definition of Terms

1. Globalization: The rapid integration of economies and markets, characterized by increased financial flows, the information revolution, cross-cultural currents, and the restructuring of global capitalism. It involves the movement of labor and technology across international borders, and is driven by human innovation and technological progress.

2. Growth: The increase in economic output, production, or income over a period of time. In the context of developing countries, growth refers to the expansion and development of their economies, often measured by indicators such as GDP (Gross Domestic Product) or GNI (Gross National Income).

3. Poverty Alleviation: The process of reducing or eliminating poverty and improving the living conditions of people who are experiencing deprivation and lack of basic necessities. It involves implementing policies, programs, and interventions aimed at reducing poverty levels, providing access to education, healthcare, housing, employment opportunities, and social support systems.

4. Developing Countries: Countries that are at relatively lower levels of economic development compared to developed countries. They often face challenges such as poverty, limited access to resources, inadequate infrastructure, and lower standards of living. Developing countries typically have the potential for growth and are undergoing industrialization and economic transformation.

5. Capital Flows: The movement of financial capital across national borders, including investments, loans, and remittances. Capital flows can have both positive and negative impacts on economies, as they can contribute to investment, economic growth, and poverty reduction, but can also lead to financial instability and vulnerability.

6. Technological Progress: Advancements and innovations in technology that lead to improvements in productivity, efficiency, and economic development. Technological progress plays a significant role in globalization by enabling the movement of information, ideas, and technology across borders, as well as facilitating trade and economic integration.

7. Income Gap: The disparity or difference in income levels between different groups or individuals within a society or between countries. In the context of globalization and poverty alleviation, the income gap refers to the increasing disparity between high-income countries and low-income countries, where the benefits of globalization are often unevenly distributed, leading to higher levels of poverty in certain regions or populations.

8. Deregulation: The process of reducing or eliminating government regulations and restrictions on economic activities and industries. Deregulation is often associated with free-market policies and is aimed at promoting competition, efficiency, and economic growth. However, it can also lead to challenges such as market volatility, inequality, and reduced social and environmental protections.

9. Dumping: The practice of exporting goods to a foreign market at prices lower than the production costs or the prices charged in the domestic market. Dumping can have negative effects on domestic industries, as it can lead to unfair competition, reduced market share, and job losses. Developing countries, like Nigeria, often face challenges related to dumping from foreign manufacturers.

10. Macroeconomic Policies: Policies implemented by governments to manage and stabilize the overall performance of an economy. Macroeconomic policies include fiscal policies (related to government spending, taxation, and borrowing) and monetary policies (related to interest rates, money supply, and central bank actions). In the context of globalization, the ability of countries to implement independent macroeconomic policies may be limited due to increased financial mobility and global economic interdependencies. 

11. Socioeconomic Development: The process of improving the social and economic well-being of individuals and communities. Socioeconomic development encompasses various aspects, including poverty reduction, education, healthcare, infrastructure development, access to basic services, and empowerment of marginalized groups. Globalization and poverty alleviation efforts are crucial factors in achieving socioeconomic development in developing countries.

12. Gross Domestic Product (GDP): A measure of the total value of all goods and services produced within a country's borders in a specific period. GDP is commonly used as an indicator of the size and growth of an economy. It provides a snapshot of the economic activity and output of a country.

13. Gross National Income (GNI): A measure of the total income earned by a country's residents, including income generated domestically and from overseas activities. GNI takes into account factors such as net income from abroad (exports, remittances, etc.) and is used as an indicator of a country's economic resources and income distribution.

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