Impact of globalization and liberalization on growth, employment and poverty: a case study of Pakistan

Impact of globalization and liberalization on growth, employment and poverty: a case study of Pakistan

How does globalization and liberalization effect economic growth, employment and poverty in Pakistan?

This paper examines how globalization and liberalization effect economic growth, employment and poverty in Pakistan. The article finds that:

  • despite numerous highly attractive incentives offered to foreign investors, the country's performance in attracting foreign investment has been poor
  • despite the intensive trade liberalization, trade performance has been dismal
  • the stabilization initially achieved of the Pakistani economy, proved to be short lived as the adjustment and reform process lost momentum and some slippages occurred in the form of proliferation of tax exemption and concession leading leading to implementation of further stabilization measures
  • the repeated attempts to stabilize the economy in combination with trade liberalization was destructive
  • the government attempted to control aggregate demand by granting wage increases below the inflation rate and by freezing employment in the public sector. This led to lower GDP growth, increased indebtedness, higher unemployment and higher poverty incidence during the period of liberalization

The article recommends that a broader approach to poverty reduction and the allocation of more funds for this purpose. Higher growth must be combined with an overall pattern of social progress and distribution.

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