Has globalisation reduced poverty?

2026-03-20 - 00:01

GLOBALIZATION has brought the economies and societies of the world much closer, effectively turning it into a global village. Over the last two decades of the twentieth century, the process accelerated significantly, aided by the establishment of the World Trade Organization (WTO), which promoted free trade and largely removed trade barriers between nations. This system enabled countries to access new markets, based on competitiveness, and encouraged governments to open previously restricted sectors to foreign investment, including services, telecommunications, and banking. Globalization also brought technology, innovation, skills, and human resource development, creating a healthy competitive environment. An important benefit of globalization is the movement of labor. Countries facing shortages of skilled workers can employ talent from nations where opportunities are limited, while labor-exporting countries benefit from foreign exchange in the form of remittances. Call centers and outsourcing of services from the United States to Southeast Asia are prime examples of this trend, creating jobs abroad while contributing to domestic economies. Modern information technology has further strengthened globalization by enabling the instant exchange of information worldwide, increasing connectivity, and turning the world into a more integrated village. Globalization has also influenced culture and lifestyle. People’s eating habits, clothing, and consumption patterns have changed under its impact, largely facilitated by global media, particularly electronic media, which has accelerated the sharing of ideas and trends. A free global economy can serve as a tool in the fight against poverty. It increases income for poorer sections of society, generates new job opportunities, encourages investment, and opens avenues for international trade. To some extent, globalization provides technology, skills, and opportunities that help reduce poverty. However, the benefits depend on proper policies and equitable distribution. Without such measures, globalization can worsen inequality rather than reduce it. In Pakistan, the experience has been mixed. Globalization has widened economic disparities, with benefits largely concentrated among wealthy individuals and large institutions. Ordinary citizens have seen only modest improvements in living standards. Imports have increased faster than exports, and local industries have not developed to their potential. While the economy has grown overall, the gains have not been equitably shared. To fully benefit from globalization, Pakistan must strengthen domestic industries, focus on research and development, implement better trade policies, and produce competitive products for international markets. Education and skill development are essential so that the workforce can meet global standards and participate effectively in global trade. By taking these steps, Pakistan can distribute the benefits of globalization more fairly, improve living standards, and reduce poverty, enabling its citizens to enjoy opportunities comparable to those in more developed nations. Globalization is not a cure-all, but with careful planning, targeted policies, and investment in human capital, it can be a powerful force to lift societies out of poverty and bridge economic divides. The challenge lies in ensuring that growth is inclusive and that opportunities reach those who need them most. —The writer is contributing columnist, based in Faisalabad. (ranazahid4@gmail.com)