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JOURNAL OF RESEARCH IN NATIONAL DEVELOPMENT VOLUME 5 NO 2, DECEMBER, 2007

 GLOBALISATION AND THE POOR NATIONS

Maku Olukayode E. and Okuneye Babatunde A.
Department of Economics, Olabisi Onabanjo University, Ago Iwoye

Abstract
This research examines the issue connected with globalization as it affects the economic welfare of poor nations. Various scholars have expressed their perspectives in relation to the link between trade openness and economic growth. Most of these researches established a positive relationship between trade liberalization and growth. However, the fact of the matter is that many things are not the same in poor nations as they are in the success stories usually recounted. A number of policy recommendation has been made which advise these economies to liberalise with some prudential regulation which seems like the advice to drive to drinks more but with more traffic lights, traffic policemen and lampposts to clutch on their way home.  This paper exposes the reality of the calamity befalling poor nations in the hands on the rich ones all in the name of globalization. The paper reviews some definition of globalization, presents the real picture of the general economic welfare of poor nation in the era of intensive globalsiation and proffer policy recommendation on the strategies the poor nations can adopt to integrate fully and derive the immense benefits from globalization process.
Keywords:globalization; transport costs; poor; marginalisation


Introduction
            Globalization is a worldwide phenomenon;  it refers to the growing interdependence of the people in the world. It is about increasing interconnectedness and interdependence among the world’s regions, nations, governments, business, trade, institutions, communities, families and individuals. It fosters the advancements of the “global mentality” and conjures the picture of the borderless world through the use of information technology to create partnership in an attempt to foster greater financial and economic integration.
            Historically, there have been three major phases of globalization; these are: 1870-1914, 1945-1980 and 1981to date. The world started to be highly globalized by the end of the 19th century. There was a rapid rise in trade as a result of falling shipping costs. In 1913, the ratio of the world trade to world output reached a peak that was also accompanied by unprecedented flows of capital and there was significant migration, especially to America.
            Following the two world wars and the great depression, a new wave of globalization began, characterized by further decline in transport costs which fell by half in real terms between 1940 and 1960, the expansion of modern international corporation, which are well suited to working around barriers to trade imposed by language, national commercial policies and other factors, and unprecedented growth in output standards (Aminat, 2002).
            The second wave of globalization was favourable for developed countries. According to World Bank Report of 2002; second wave of globalization was not golden for the developing countries. Although per income growth recovered from the interwar slowdown, it was substantially slower than in rich countries. However the number of people living below poverty live improved globally.
            In the new wave of globalization, which essentially began in the 1980s, there were three distinctive features: First: a large number of developing countries broke into the global market; Second, other developing countries became increasingly marginalized in the world economic development and suffered declining incomes and rising poverty: Third, international migration and capital movements, which were negligible during the old wave of globalization, become again substantial.

Perhaps the most important and unique features of the current globalization process are “the globalization of national policy making mechanism”. National policies (embracing economic, social cultural and technological areas) that until recently were under the jurisdiction of states and people within a country have increasingly come under the influence of international agencies and processes or by big private corporation and economic or financial players. This has led to the erosion of national sovereignty.

Literature Review
            Globalisation is now a hot issue. It is a major topic of debate everywhere, in both developed and developing countries. It has become the focus of discussion on international development. All the major development issues – poverty alleviation, sustainable development, chronic indebtedness and related matters – have been linked in one way or another with the phenomenon of globalization. One can be forgiven therefore for treading again on a well-trodden track. Here is an area where there is so much talk, so much debate, so much protest and so much controversy. And yet, one is left with the impression that there is still so much confusion in/out thinking on this critical issue.
            Ohiorhenuan (1998), defines globalization “as the broadening and deepening linkages of national economies into a world-wide market for goods, services and especially capital”. In his definition, he saw the driver of globalization as technology. He identified the main trigger of the process as changes in economic policy across the world and the information and telecommunications revolution. The pace of globalization has been quickened by what he called supranational policy regimes such as the world trade organization, the global environment facility, and the realignment of the international financial institutions.
            For Mark Stevens (2000), “Globalisation in general is the act of expanding and implementing one’s vision, services and products into other markets, conducting and communicating business across boundaries, creating a network of business hubs around the world to foster growth and global appreciation”. He identified technology as the major driving force, which in turn is driven by innovation, the blurring of boundaries between industries and sectors, and a dramatic change from the use of the asset-based strategies to knowledge-based strategies. Stevens (2000) argues that technology –driven globalization is improving the lives of people in the remotest parts of the developing world – wireless technology, personal computers and internet connectivity. Internet growth and opportunity is driving globalization in all spheres of trade and commerce. Internet adoption on the other hand, he believes, is driven by market forces. In order to accelerate the process, companies should get on line, countries should increase Information Technology (IT) literacy, and manufacturers should migrate to e-commerce, governments should support the process by reforming the capital market and raising local awareness. This approach makes the issue appear simple. It is doubtful that many countries are in a position to apply these simplistic solutions.
            For Nayyar (1997), globalization denotes the increased integration of trade, investment and finance and the reactions, policies, and measures that follow from these. Globalization can be defined as the phenomenal ‘interlinkages’ interactions, integration and interdependence among nations that are manifested in unprecedented trading volumes, massive financial flows, concentration of corporate power in progressively fewer multinational players. Trade finance and services are growing, although not evenly.
            Globalization always produces winners and losers. In all cases, those who win are those who trade in good and services characterized by increasing returns. The pace and structure of globalization is usually dictated by the winners. In the late 19th century and pre-first World War years, it was driven by more colonialism and gunboat diplomacy. The current one is driven by more subtle ideology propagated by the international financial institutions and the world trade organization.

Trade liberalization should lead to greater benefits for all if the free movement of goods and service is extended to the physical movement of people. In contrast, what happen is that it is driven by Multinational Corporations. Location is determined by cost advantages. The result is minimal inter-firm and inter-industry trade and integration. Labour migration which helped to equalize factor costs in previous episode of liberalization, is restricted to the highly skilled – computer software and hardware engineers and programmers. As Mule (2000) observes, “In theory globalization can have a positive impact on agriculture’s growth. In practice globalization benefits those with technology, resources, contacts, information and access to markets. It has a negative impact on the poor.”
            Globalization has been seen as the struggle between the “state and market” on the assumption that it reduces the power of the nation state in the control of the economy while allotting much more power to the market. (Castells, 1997, 1998). Castells argues that as the markets for finance, goods and (some categories of labour) increasingly transcend national boundaries and become gloablised, it is assumed that the process would lead to the eclipse of “the market of the state”. Yashin (2002) defines globalization as an economic revolution of the new millenium in which the world is shrinking into a global village in part by advances in information and communication technology (ICT). Capital globalization to him, has been responsible for the integration of national systems of production and finance whose enhanced mobility ensures that borrowers such as governments and private entities compete with each other for capital in global rather than national markets. Yashin submits that Africa has been competing at a very high cost. The danger in this type of skewed globalization is that most of the developing countries are import dependent, have monoculture economy, they are technologically backward and without stable polity (democracy) but rather they are preoccupied with tribal, ethnic and communal conflicts. Therefore, since Africa is competing at a high cost as a result of the above-mentioned facts, one can safely say that globalisation for Africa is tantamount to a suicide mission.
            Friedman (1996) perceives globalization as that loose combination of free trade agreements, the Internet and the integration of financial markets that is erasing borders and uniting the world into a single, lucrative but brutally competitive market place. McGrew (1992) conceives it as the forgoing of a multiplicity of linkages and interconnections between the states and societies which make up the modern world system and the process by which events, decisions and activities in one part of the world can come to have significant consequences for individuals and communities in quite distant parts of the globe.
            Simply defined, “globalization is the increasing integration, of the activities, especially economic activities, of human societies around the world” (Musa, 2000).  He argued that the basic forces driving globalisation fall into three categories-technology, preference and public policy. Improvements in technology have increased integration by lowering the cost of transporting goods and people from one place to another and these by reducing the cost of communicating ideas through the development of Internet facilities.

 Globalisation Issues
            Globalization and economic growth are related at least theoretically. Globalisation is often associated with less restrictive trade regimes resulting in more openness of the economy with concomitant increase in volume of trade.

How much of these benefits for economic growth have actually materialized in the developing world is a matter of great controversy. Taking a look at developing countries, Prasad, Rogoff and Kosse (2003) find that the average income per capita for the group of more financially open (developing) economies does grow at a more favourable rate than that of the group of less financially open economies. Whether this actually reflects a causal relationship and whether this correlation is robust when controlling for other factors remain unresolved questions. Thus, here seems to be controversy in financial globalization – growth linkage in developing countries.
Several studies, using various measures of financial integration or openness, have provided mixed or inconclusive results. While studies such as Klein and Olivei (2000) and Bekaret, Harvey and Lundblad (2001) find positive effect on growth, others, Adesina, Grilli and Melesi – Ferrenti 1994; Grilli and Melesi – Ferrenti 1995, Rodrick 1998, Edward 2001 and Edison Klein, et-al (2002) find mixed effects.
The general view held by most analysts is either that Africa is not integrated enough into the world economy and therefore does not benefit much from globalization or that Africa is marginalized or left behind in the globalization effort. A careful examination of the available evidence (Crafts 1997; O’ Rourke, 2001) especially with respect to growth in real per capita income, inequality, trade and capital flow help to shed some lights on this assertion.
Generally, the 19th and 20th century witnessed substantial growth in world real per capita income although the 20th century growth has been much stronger than that prior to 1870. World per capita GDP grew by about 1.5% between 1900 and 1913, declining to less than 1% between 1912 and 1950, rising to an all time high of about 3% in 1950-73 period and decline thereafter to less than 1.5% between 1973 and 2000 (IMF 2000).


 

Table 1:Growth Rate of Real GDP/Person of Some Selected Countries 1820 – 2000

Country

1820 – 70

1870 - 1913

1913 - 1950

1950 -1973

1973 - 2000

Advanced countries

0.9

1.4

1.1

3.8

1.8

United kingdom

1.2

1.0

0.8

2.5

1.6

United State of America

1.3

1.8

1.6

2.4

1.6

Japan

0.1

1.4

0.9

8.0

2.5

Brazil

0.2

0.3

1.9

3.8

1.4

Mexico

-0.1

1.7

1.0

3.1

0.8

China

0.0

0.6

-0.3

2.1

5.4

Indonesia

0.1

0.8

-0.1

2.5

3.6

India

0.1

0.4

-0.3

1.6

2.9

Czechoslovakia

0.6

1.4

1.4

3.1

0.3

Russia

0.6

0.9

1.8

3.4

-1.2

Africa

0.1

0.4

1.0

2.0

-0.3

Latin America

0.2

1.5

1.5

2.5

0.6

 Source: Craft 2001


One interesting feature of the growth experience is that while Africa’s economic performance was quite comparable to that of China and India between 1820 and 1973, Africa completely lost out between 1973 and 2000, as the average growth rate of -0.3 was far below China’s 5.4% and India’s 2.9%.
            An alternative way to assess Africa’s position in the era of globalisation is to use the Human Development Index (HDI). Available evidence reported by Crafts (2000) shows that all regions including South Asia and Africa exhibit strong catch-up of the leading countries after 1950. The average HDI of both South Asia (0.449) and Africa (0.435) are quite near the North America level of 0.462 in 1870.
            In spite of the phenomenal growth in real per capita income in the twentieth century, globalisation was also associated with marked regional and within country inequality (O’Rourke 2001). This increased inequality is attributable mostly to widening gaps in labour earnings among the developing countries. The table below presents a mixed picture.


 

Table 2:          Income Inequality in the late 20TH Century

Country group

1960s

1970s

1980s

1990s

OECD

 

 

 

 

Gini Coefficient

0.347

0.336

0.326

0.330

Gap

6.9

6.6

6.2

6.5

No of countries

12

19

20

13

AFRICA

 

 

 

 

Gini Coefficient

0.453

0.498

0.416

0.464

Gap

12.2

17.5

9.6

12.9

No of Countries

4

4

11

15

LATIN AMERICA

 

 

 

 

Gini coefficient

0.536

0.504

0.501

0.500

Gap

21.2

17.0

16.2

13.3

Number of countries

6

12

12

10

PACIFIC RIM

 

 

 

 

Gini Coefficient

0.374

0.390

0.385

0.392

Gap

8.3

9.0

7.9

8.1

Number of countries

6

9

10

7

Source: O’Rourke 2001

           

The next focus is on the major component of economic globalization – trade and capital flow. As pointed out by Ajayi (2001), trade remains the main vehicle for Africa’s participation in, and full integration into the global economy. Yet, Africa’s trade is concentrated in a narrow range of primary commodities whose market share has been shrinking over the years.
            Although globalization is multifaceted, the economic aspect, is perceived by Obadan and Obioma (1999) to be at the heart of the process, and has tended to receive greater attention in view of its rapid pace over the past five decades. One of the major benefits of globalization is that greater economic integration creates the potential for countries to increase their output of goods and services. This increase in the output of goods and services is known as economic growth. It is usually regarded to be an indispensable component of economic development. While growth on its own is not sufficient for economic development, it nevertheless represents a necessary condition for a sustained increase in living standard and reduction in poverty (Easterly, 1997).

 Poor Nations and Globalisation
            The World Bank and liberal economists have always stressed the opportunities of globalization. They have drawn attention to the opportunities to expand exports, attract foreign investment and acquire modern technology; and they have provided facts and figures to buttress these claims. However, the fact of the matter is that many things are not the same in poor countries especially Africa as they are in the success stories usually recounted. For one thing, the relevant infrastructure and capacities are still lacking in many poor countries; for another many countries have been saddled with the burden of political upheavals and inter-ethnic conflicts which have diverted valuable resources from development which in turn inhibits their export expansion. The real lesson from these examples is that poor counties can perform the same way if they mobilize domestic effort and international assistance to build up relevant capacities.
            Despite advances in other parts of the developing world, hunger and poverty are increasing in sub-Saharan Africa: approximately 186million people are chronically undernourished (one out of every three) and 291 million people live on less than a dollar a day. The total number of hungry people in sub-Saharan Africa has double during the past thirty years. (World Bank, 1993).
            This much is generally acknowledged. There is also much else on which there is substantial agreement: in spite of the AIDS pandemic and the disastrous conflicts in a few counties, the economic prospects for the continent could be improved significantly with more purposeful national efforts and more conducive international environment. While recent growth figures give some hope for cautions optimism, at least in a few countries, the rigidity of Africa’s economic structures and institutions continue to raise concern about the extent that the continent can cope with the speed of change in the world economy.
            World exports now constitute over 23 per cent of world GDP or over $7 trillion (USD). Developing countries account for about 30 per cent of world exports. While the exports of Latin America and Asia grew at over five per cent and seven per cent respectively in the last 40 years, sub-Saharan Africa suffered a decline in exports of about one per cent per annum in the period. While the share of Asia in word manufactured exports grew from 16 per cent to over 27 per cent and Latin America maintained its share at five per cent, sub-Saharan Africa’s share declined, from four per cent to about two per cent. (World Bank 1993).
            Cross border capital flows have also been growing phenomenally. This included portfolio equity flows, foreign direct investment, (FDI) and currency trading. Currency trading took on a new significance with the demise of fixed exchange rates. Portfolio equity flows reached $46 billion in 1996 before falling to $33 billion following the Asian financial crisis of 1997. Private capital flows became dominant rising from 45% in 1990 reaching 85 percent of total in 1996. Non-bank financial institutions have assumed a new importance with the growth of non-debt financial instruments in cross border flow. (World Bank 1993).
            It is estimated that FDI grew at an average annual rate of 24 per cent from 1986 to 1990 and 17 per cent from 1991 to 1996. Annual FDI flows went from $28 billion in 1970s to $243 billion between 1991 and 1996. Africa’s share of FDI flows in 1996 was only 1.4 per cent of global flows. (IMF 2000).
            The role of multinational corporations (MNCs) in global trade has become dominant with the dramatic fall in transport and communications costs. MNCs are now able to locate different stages in their production operation in different parts of the world to maximize competitive advantage. MNCs are also the most important vehicles for transferring technology around the globe. The most significant aspect of globalization that should concern us in Africa is the fact that it has led to unprecedented inequalities in the distribution of benefits between the developed countries and the less developed ones. Present day globalization is not new because history shows that a similar trend was witnessed in the 19th century and the earlier part of the 20th century. What is different is the intensity and the magnitude of the inequalities that it generates. In all these developments, there is the underlying assumption that globalization is good for all and that its benefits are shared out, even if not equally, all over the world. It is hardly realized that globalization benefits different countries differently, the more developed countries taking the best part of the benefits while the least developed tend to be impoverished and by-passed by the benefits. The combined effect of the global fluidity of finance capital, the growth of FDI, and the emergency of global corporations has greatly undermined the economic (and political) sovereignty of state especially the poor ones.
The role of foreign exchange traders and the speculative behavior of other securities intermediaries cast serious doubts on the utility of capital flows as development agents. It is necessary to highlight certain pertinent issues that must be addressed in any discussion on globalization: (UNDP, 1999), reproduced figures to show that the gap between the richest and the poorest countries in per capita income terms was only 3:1 during the dawn of the industrial Revolution in 1820, rising to 11:1 by the first episode of globalization in 1913. More recently, it grew to 35:1 in 1950, rising slightly to 44:1 by 1973. After the commencement of the present round of globalization, this figure has acquired a staggering magnitude of 72:1. Accompanying this widening gap is the grave human cost in terms of malnutrition, morbidity, and mortality (Murshed 2000). It is estimated that those living in abject poverty number over 700 million, the majority of whom are in sub-Saharan Africa and East Asia. This is a most conclusive evidence of the marginalization of some groups and important for poor nation to be aware of the implications, prepare to avoid the most telling consequences, and prepare to meet its challenges.
            Globalisation is polarizing the world economy, among and within countries and between rich and poor, and if corrective measures are not taken, it may produce a political backlash that may wipe out several of the benefits of economic reforms, and even rollback the achievements of economic integration, the UN Conference on Trade and Development (UNCTAD) warned on 15 September in its Trade and Development Report (TDR), 1997.
            As in the 1920s and 1930s, public faith in markets and openness could be quickly overwhelmed by political events, and there should be doubt that (as in the Great Depression if the 1930s), “the burden of such international economic disintegration would once again be borne by those who can least afford it”.
            The common set of forces coupled with rapid liberalization, has been observed by UNCTAD to have been favouring certain income groups over others resulting in greater wage inequality between skilled and unskilled workers, both in the North and South, capital gaining every where at expense of labour and the middle classes, finance gaining an upper hand over industry and rentiers over investors, and everywhere, increased job and income insecurity.
            The association of rising profits with stagnant investment, rising unemployment and reduced pay, is already widely resented and threatens to raise questions about the acceptability of placing an ever-increasing share of national product in the hands of a few and “unless incomes of this minority are used to create more general prosperity, they may lose their social justification”, the report warns.
            The view that unfettered global market forces will generate a process of catching up by developing countries, accompanied by improved income distribution has little historical or theoretical support and “a much greater role needs to be played by governments in the South in accelerating growth and reconciling it with greater equality – but a role fundamentally different from the misguided interventions that pervaded many developing countries in the past.


Empirical Analysis and Interpretation

            The panel data econometric regression result showing the impact of globalization on development is presented in this section. In the first place, it must be noted that the fixed effect country specific-model with Generalized Least Square (GLS) technigues of estimation was used to estimate the parameters.
            Data and information needed for this research were obtained from the International Financial Statistics (IFS) and World Economic Indicator CD ROM 2004 edition. A total of 21 Poor African Nations countries comprising six West African Countries, (Cote D’Ivoire, Mali, Benin Republic, Ghana, Nigeria and Senegal), five East African Countries (Uganda, Tanzania, Kenya, Gabon, Congo Republic and Cameroon) and five South African Countries (South Africa Republic, Malawi, Angola, Zimbabwe and Zambia) were used for the research. Trade and Development related data for a period of 23 years (1980-2002) were equally used.
            We first present and interpret the result of globalization-growth nexus in order to examine the impact of globalization on development of Poor African Nations countries. Since our data are observed for over 20 years, it can be said that we are interested in the long run economic growth impact of globalization. We shall present the full sample and also the regional specific sample as it were.


Table 3: Globalization and Development
Dependent Variable = LNGRAT


Indeep. Var

Full Sample

West Africa

East Africa

Central Africa

South Africa

 

b

t.value

b

t.value

b

t.value

b

t.value

b

t.value

Constant

-3.22

-2.6

-69.5

-51.6

-13.4

-5.51

-13.4

12.5

0.28

0.002

LNCPI

0.054

8.5***

-0.07

-2.7**

0.6

1.5

-0.01

0.27

-0.03

-0.16

LNFDI

2.03E-09

2.4***

-0.03

-0.07

0.13

1.8

0.007

0.073

0.073

1.10E-09

LNDEBT

-0.036

-0.6

-0.37

-0.3

-0.47

2.9**

-0.39

-1.22*

-0.24

-2.7**

LNGPCI-1

0.21

8.44***

9.8

2.8**

-0.8

3.2**

0.2

2.06**

0.10

0.66

LNRESEV

0.2

3.7**

0.6

1.8

0.003

0.5

-0.3

2.14**

0.2

0.9

LNBOP

0.05

2.2**

0.2

0.9

 

 

 

 

 

 

LNOPEN

-1.03

-4.1**

5.6

2.009**

0.05

1.2

-0.0004

0.0005

1.03

-4.6**

R2

0.99

0.4

0.4

0.5

0.99

F-STAT

3581

2.8

-

6.2

999.96

R2

0.99

0.3

0.3

0.4

0.9

 *** - Significant at 1% level of significance
** - Significant at 5% level of significance
b – Coefficient

           

The results in table 3 shows that in Poor African Nation in general, FDI, lagged growth rate of per capita income, foreign reserve, balance of payment and degree of openness  are significant to explain growth rate phenomenon. The full sample shows “a goodness of fits” because all the variables explain 99% of the variation in the foreign direct investment such growth phenomenon. The value of F-statistics shows that the dependent variable are jointly statistically significant and hence robust to explain growth rate scenario in Poor African Nation.
            Other variables that are significant show the expected sign. However, it seems growth rate sluggishly respond to foreign direct investment in Poor African Nation. A 1% increase rate can be explained in part, by just 0.00000002% (almost zero) percentage point change in foreign direct investment. If growth rate increase, by 1% it must be the case that foreign reserve has increased by 0.2% while degree of openness increase by 1.03%. it is also the case that balance of payments improved by 0.05%. We can therefore conveniently say that a free capital inflow (as a result of globalization)to Poor African Nation seldomly leads to growth and development. Also, we can empirically justify the fact that external reserve, which is used to maintain an adequate level of reserve to facilitate international transactions significantly influences growth in a positive manner. If Poor African Nation economy should grow by 1%, foreign reserve used for facilitating international; transaction should increase by 0.2%. Degree of openness affects growth negatively. A growth rate of 1% can be explained in part by reduction/decrease in the degree openness by 1.03 percentage point.
            In regional specific term, different results emerged. In West Africa cuntries four variables significantly explain growth rate. These are consumer price index, lagged per capita-income, foreign reserve and degree of openness. Balance of payments variable is dropped because almost all the countries have balance of payments deficit in which case, the package will experience difficulty in ascertaining logarithmic value. Unlike in the full sample, openness is positively and statistically significant in explaining growth rate in West African economy. This will be explained in part by 5.6% increase in degree of openness. This means that it is possible as argued by the growth theorist and most especially the new growth theory that openness to trade provides access to a variety of imported inputs especially technology necessary for development.
            It may also be the case that import protection and export promotion raises economic growth. Increase in foreign reserve by 0.6 percentages will explain in part a 1% increase in growth rate. this can be significantly explained with 90% confidence. Balance of payments and foreign debt. A 1% increase in growth rate can be explained by 0.13% increase in foreign direct investment and 0.47% increase in foreign debt. This means that in East Africa inflow of capital contribute immensely to their growth.
            In Central Africa, only foreign reserve is statistically significant. A growth rate of increase of 1% can be explained by a reduction of foreign reserve by 0.3 percentage points. it is only in this regional bloc that reserve, one of the variables of globalization negatively affect growth rate. All other globalization variables are not statistically different from zero. To that extent we can say that in Central Africa, globalizations seems not beneficial to economic growth in any way.
            Finally, Southern Africa’s globalization economic growth nexus reveals the facts that foreign direct investment (at 1%) level), foreign debt at 5% level) and degree of openness (at 1% level) influence economic growth. A 1% increase in growth of this region will be explained partly by a reduction of 0.24% in foreign debt, reduction of 1.03% in degree of openness and 0.000000001% (almost zero) increase in foreign direct investment.

Options for Poor Nations
            Central to the preparedness of any nation for globalization is a sharp focus on its youths and children, who own the future, and who have been responsible for most of the phenomenal technological advances of the second half of the Twentieth Century. A focus on children and youths is particularly called for in the case of Africa because of the heavy population of children as a percentage of the population. A nation where the children miss the train of on-line connectivity and the enormous explosion of learning that it holds is doomed. An attack on poverty must start by an assault on ignorance and a relevant nation is only guaranteed if its children are prepared for life-time learning and are given the enablement to be part of the global future which is now. The agenda for global preparedness would include:

  1. A heavy emphasis on the development of the telecommunications and internet infrastructure.
 
  1. A choice of national agenda that conform to the nation’s development needs and level of development.
  2. Since technology is a major driver of globalization, the centre piece of preparedness must be a focus on investments that expand the technological capability of Nigeria – institutional development, Research and Development (R and D) spending, venture capital for innovative initiatives, and a forward looking educational curricula that prepare its graduates for the challenges of globalization.
  3. Deliberate choice of production riches in which competitive advantage will be developed and investing in the skills and competence that are required for meeting global challenges.
  4. Developing the regulatory framework and the conducive environment that promotes inter firm competition within the country so as to limit dependence on protective tariffs for infant industry and assure early international competitiveness.
  5. Promotion of financial and other corporate consolidation through mergers and buy outs that strengthen local enterprises for global competition. Malaysia has a policy of reducing the 64 banks in the country to a maximum of 10 for the purpose of helping them to become global players. Partnerships in the private sector can bring about strategic alliances and collaboration for the purpose of meeting the global challenge.
  6. Preparedness for globalization must include the transformation of the public sector to meet the global challenge of managing a private sector led economy. If the private sector is moving on-line and relating to the internet, government methods, service delivery, record keeping and information dissemination must engage with these new developments. Again, Malaysia has set the pace by introducing its education, health, and public works sector into the information Technology (IT) age. Participants at a recent meeting were treated to an exhibition of the various ways in which IT is being used to bring government services to the populace.
  7. Creative networking of the various initiative within the country can help to catalyze the preparedness of the private sector, civil society and government for globalizations.
  8. Computer literacy and internet connectivity must be addressed by targeted policies that deliver quick and sustainable results.

Conclusion
            Globalization has been played out as a process whereby the markets for the goods and services of developed countries have free access to all markets of the developing world without a reciprocal access for those of the developing world. It has also meant the liberalization of capital markets around the world where developed country capital is dominant. With over 70 percent of international capital transfer being speculative, the developing world is being forced to open up their capital markets even before they are prepared to control this volatility.
            Globalization is also a process where the rules or international transactions are enforced in the interest of the rich and powerful countries while the latter are able to choose what rules to obey.

We have shown some of the things that poor countries must do in order to be ready for globalization. However, there is no substitute for a strong economy. A strong economy is based on a strong real productive sector. Nigeria’s real sector is weak and dying. For it to be revived there must be a deliberate attack on the forces that stifle it. The government is already working on infrastructure which is the most stifling problem. Beyond this it must revive its own real sector industries. Government owns sizable real sector establishments which are mostly in limbo. This is not a call for governments to run these but to cause the viable ones to be run by competent operators even if these will come from the moon. It must also help the private sector to revive their own dormant but viable ones with whatever support is necessary.
            A much neglected aspect of this revival is a sizable, cheap long-term credit. It is important for gross domestic savings (GDS) to get this from the present 10 percent or so, to at least, 30 percent. A quick means of doing this for poor nations consist in doing three things. Firstly, we must revisit the abandoned but very successful development stocks of the 1970s and 1980s. Secondly, government must reorganize its Pension Funds and make it both contributory and better managed. Thirdly, it must revive its stabilization fund to reduce the country’s vulnerability to the vagaries of the oil market. These three measures can substantially raise GDS and provided the source of cheap credit. If this is administered by the banking sector in a transparent, rule-based and targeted manner with enforced sanctions against abuse, the productive sector can be quickly revived.

 

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