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MANAGING VULNERABILITY AND RISKS FROM GLOBALIZATION AND TRADE LIBERALIZATION S.O. Akande, NISER, Ibadan Nigeria.

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Presentation on theme: "MANAGING VULNERABILITY AND RISKS FROM GLOBALIZATION AND TRADE LIBERALIZATION S.O. Akande, NISER, Ibadan Nigeria."— Presentation transcript:

1 MANAGING VULNERABILITY AND RISKS FROM GLOBALIZATION AND TRADE LIBERALIZATION S.O. Akande, NISER, Ibadan Nigeria

2 CONCEPTUAL ISSUES Globalization Liberalization - Characteristics/Features of Globalization - Motive force behind globalization RISKS ASSOCIATED WITH GLOBALIZATION/LIBERALIZATION COPING MECHANISMS AGAINST NEGATIVE EFFECTS OF GLOBALIZATION CONCLUSION

3 CONCEPT OF GLOBALIZATION Globalization refers to the emerging interdependencies and linkages of the countries of the world, their markets and their peoples. Ohiorhenuan (1998): “The broadening and depending linkages of national economies into a world-wide market for goods, services and capital” Stevens(2000): “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”

4 CONCEPT OF GLOBALIZATION (cont.) Nayyar (1997): “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”

5 IMPORTANT ELEMENTS OF GLOBALIZATION Globalization Concerns: - expansion in international trade; - growing openness and the declining tendency of rigid nation state boundaries; - free flow of financial services; - growth of the multinationals; - movement of labour; - environmental standards - information flows across nations - respect for intellectual property rights.

6 The motive force driving globalization is Information Technology (IT), the skill, the knowledge base and communication expertise now available to economic agents (multinational companies in particular).

7 ECONOMIC LIBERALIZATION May be perceived as a subset of globalization. It is a set of economic policies undertaken within a country, or a region, which leads to: free trade in goods and services; free flow of investment funds; free movement of persons Economic liberalization relies on market forces to determine allocation of productive resources. Privatization and commercialization's are important items in the economic liberalization policy menu.

8 RISKS ASSOCIATED WITH GLOBALIZATION Globalization is not without risks. Mule (2000) stated: “In theory globalization can have a positive impact on agricultural growth. In practice globalization benefits those with technology, resources, contacts, information and access to markets. It has negative impact on the poor”.

9 RISKS ASSOCIATED WITH GLOBALIZATION (cont.) Globalization is riddled with imperfections. There are winners and losers. Winners –The purveyors of globalization – The owners of technology – The owners of skill – The affluent, rich nations of the world. Losers – Developing, poor countries of the world – Recipients/Users of technology – Nations relying on export of primary commodities (high concentration of export index) – They are not the players but the spectators.

10 GLOBALIZATION PROBLEMS free trade is never so free (trade-distorting measures, e.g. subsidies, non-tariff barriers, etc are still being taken by rich and poor countries alike) free movement of people (especially those without skill) across national borders is still curtailed; investment funds flow very sluggishly, if at all.

11 MANAGING THE RISK OF GLOBALIZATION If globalization has come to stay, how do we live with it - especially poor nations? The opportunities offered by globalization: “There are opportunities to expand exports, attract foreign investment and acquire modern technology” (World Bank)

12 MANAGING THE RISK OF GLOBALIZATION (cont.) This perception assumes away the following problems/obstacles which developing countries face: –relevant infrastructure and capacities are lacking – political instability and internal upheavals - ethnic conflicts and the tyranny of local militia, indeed of even national governments in Third World countries (democracy is tearing this down gradually) – hunger and poverty are endemic – the fundamental economic structures in Africa are ill-equipped to cope with the challenges posed by globalization.

13 MANAGING THE RISK OF GLOBALIZATION (cont.) More purposeful national efforts and a more supportive international community can help make the gains of globalization more equitable.

14 Options available  Promoting poverty alleviation programmes -addressing unemployment problems -development of skills -mass education  Promoting food security -addressing poor farm productivity -targeting self-sufficiency -self-reliance and expansion of staple crops and livestock

15 Options Available (Cont.)  Diversifying the economy -move away from depletable resources (like petroleum) - engaging more in value-added activities - expanding agro-industrial enterprises - encourage growth of non-farm activities  Provision of economic and social infrastructure - reliable financial system -roads -communication network and IT - health, education, water, etc.

16 Options Available (Cont.) Re-ordering and re-engineering of development initiatives - strategy for rural development (WB) is timely.

17 CONCLUSION The new partnership in development and worldwide interdependence must involve the poor. The poor should not be further impoverished by globalization; neither should they be bypassed. The idea of providing adjustment assistance to compensate losers at least partially is not acceptable. Globalization should also have human face.


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