GLOBALIZATON AND INCLUSIVE GROWTH

Introduction
Globalization is not a new phenomenon and our world has experienced its effects on different aspects of
life. The effect of globalization is by all accounts fluctuating from economy to economy, depending on
the nature, structure and level of transparency of the economy. Since 1980’s there is a huge increment
in FDI and worldwide exchange streams (IMF, 2006) and all the open economies are influenced by this
globalization process. Pakistan is a globalized economy and Pakistan’s economy has grown faster rate
on average than many other low- or middle-income countries. But despite huge gains in economic
output, Pakistan underperforms in many social indicators. Our current social, political and economic
system exacerbating inequality rather than reducing it. We can call this “growth without development”.

So, challenge here is not just economic growth. it should be doing it in a way that fruits of economic
growth should be distributed fairly, and it should create opportunities for all in short, growth should be
inclusive-growth that benefits everyone. I intend to do my thesis work to analyze the” Impact of
Globalization on Inclusive Growth”.

Literature Review

Kılıçarslan & Yasemen (2018) examined the impact of globalization on economic growth in Turkey
covering the period from 1980 to 2015 using the globalization index and its components (economic,
social and political globalization indices) According to the KOF overall globalization index, the result of
the Full Modified Ordinary Least Squares cointegration test showed that economic growth increase
“economic” and “social” globalization in Turkey. When KOF de facto and KOF de jure is separated, the
effect of economic globalization on economic growth is negative and statistically insignificant. According
to KOF de facto globalization index, social globalization increases economic growth, while in an analysis
using the KOF de jure globalization index, social globalization reduces economic growth. Besides,
political globalization negatively affects economic growth.

Mandle (2003) has discussed at length the benefits and costs of globalization. He attacks the anti-
globalization movement and refutes the false notions associated with major criticism of globalization.
His major premise is that globalization is concerned with economic growth necessary to take care of
poverty and therefore, globalization is promoted because development and integration of the global
markets have a substantial impact on poverty reduction.

Afzal (2007) examined the impact of globalization on the economic growth of Pakistan’s economy for
the period 1960-2006. He found that Public sector investment and private investment stimulate each
other that in turn benefit the economic growth. Openness and financial integration do not have short-
run impact on economic growth. Pakistan’s economy will certainly benefit from globalization provided
the country pursues sound policies and this is inevitable.
Justification of the Studies
A large number of studies have done to investigate the impact of globalization on economic growth or
gdp. But GDP no longer provides an adequate measure of economic activity. GDP does not capture the
full extent of globalized economy. GDP is unable to explain the distribution of growth (whether for
income, consumption, health or education). Most if previous studies have analyzed the impact of
globalization on economic growth, income inequality, employment & poverty. I am unable to find a
single study which focuses on the impact of globalization on inclusive growth. So, in this background I
want to conduct a research on this topic. I hope my study will provide valuable evaluation of the role of
globalization in attaining inclusive growth.

Objectives and Plan of the Study

My objective is to inspect the role of globalization in attaining inclusive growth in Pakistan. For this
purpose, three indicators of globalization will be used which are;

a) Political globalization
b) Economic globalization
c) Social globalization

Data on globalization will be taken from KOF index of globalization. In case of Pakistan only a few studies
have used this data and advantage of using KOF is that it has developed specific measure of social,
political and economic globalization. Inclusive growth will be measured by composite inclusive growth
variables like inequality, poverty and inverse of employment to population ratio following Romos et
al.(2013).

Statement of the problem

“What is the role of globalization in achieving inclusive growth in case of Pakistan”.

References
Afzal, M. (2007) The Impact of Globalisation on Economic Growth of Pakistan: Pakistan development
review · December

Mandle, Jay R. (2003) Globalisation and the Poor. Cambridge: Cambridge University Press.

Kılıçarslan, Yasemin(2018) The Impact of Globalization on Economic Growth: Empirical Evidence from
the Turkey: International Journal of Economics and Financial Issues, 2018, 8(5), 115-123