The Effect of Globalisation on the Development of Underdeveloped1 Economies

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THE EFFECT OF GLOBALISATION ON THE DEVELOPMENT OF UNDERDEVELOPED1 ECONOMIES By

MUSA JEGA IBRAHIM

The existing wide disparities between the developed and the underdeveloped economies makes globalisation a tool for stultifying the industrialisation process, and by extension, retarding the growth and development of underdeveloped economies. Trade liberalisation, the cardinal instrument of globalisation ensures that industrialised countries have access to world markets, which enhances further industrialisation of industrialised countries while incapacitating the industrialisation process of the underdeveloped economies. The paper is an attempt to examine issues surrounding the paradox of globalisation and provide a framework for underdeveloped countries to circumvent the overbearing effect of globalisation in their efforts towards industrialisation, economic growth and development. INTRODUCTION Globalisation constitutes a critical motivation for development in the contemporary world of today as a result of the challenges it poses to nation states. The equation of global influence is fundamentally determined by a vibrant economy that is characterised by inherent ability to sustain a steady state growth path and development. Theories of economic growth (both neoclassical and endogenous models) converge on the fact that technology is the driving force of economic growth. The crucial factor in global economic equation is therefore technological capabilities, which makes proper utilisation of resources feasible. In turn, the utilisation of resources is a requisite process for attaining technology and generating economic growth.

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Classification such as “developed”, “developing” and “underdeveloped” have been used to describe

countries depending on their levels of attainment of the features of development. This paper will use underdeveloped countries (economies) due to its focus on the most poor countries of the world that are widely drifted from the status of development, recognizing that developing is ascribed to those countries that have initiated some visible programmes that is culminating into some form of attainment of developmental ideals.

The current trend of globalisation underscores the critical role of industrial development in minimising the level of marginalisation associated with the prance of globalisation. The process of globalisation has given rise to greater competition towards markets and investments. Changes that are sweeping rapidly across the business world have forced businesses and nations to adapt by striving to change old economic behaviours and traditions. Industrial development has become an imperative recourse for underdeveloped economies, in that it must be seen as a key component of their development process. The role of the industrial sector in the newly industrialising countries has further intensified the appeal and the compelling urge for industrialisation for the third world countries. Considering that economic growth is a regeneration process which implies that lack of economic growth can regenerate itself, is it possible for underdeveloped economies to transform into vibrant economies for growth and development? Given the competitive edge developed economies have over underdeveloped economies and the tacit support for developed economies by such international global institutions as WTO, World Bank and the IMF, the task of articulating and implementing policies and strategies that could create a basis and sustain economic growth and development of underdeveloped economies have become very arduous. In recent times, the impact of globalisation on the development process of emerging economies have aroused closer and more critical examination of the vestiges of globalisation as a result of the persistent failures of such economies. The economic situation of most less developed economies have continued to degenerate and often afflicted by poverty, squalor, deprivation, frustration...
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