Background to the Study
In the face of the earth, no state or nation could exist in isolation. In other words, no nation could perhaps be in a state of autarky. Which means that no nation could have all resources (both natural and human) at her disposal. (cited in Adam Smith, 1776) in his work advocated for interlinks (that is globalization or trade liberalization) of economies. He affirmed that the only way economic growth and development could easily be sustained among nations of the world is for every nation to specialize on that good she has an absolute advantage and import that good she has an absolute disadvantage.
With the advent of globalization and especially since the end of World War II, the World has become a much smaller place where interaction between different countries has led to a situation where a country’s economy and development are not only in the hands of the ruling Government but is highly influenced by international organizations and international trade where international rules and legislations reign. Globalization is a highly controversial process which has come under much criticism in its current capitalist form and comes to a surprise to Economists and Policy makers who are highly convinced of the benefits this form of globalization can bring to the developing world (Jelilov, Gylych; Kachallah Ibrahim, Fatima; Onder, Evren, 2016).
The effects of globalization can be seen on Economic growth within a country. Many highly globalized Developing countries have not been able to profit from globalization and are still facing the same problems they have been facing for many decades. Western organizations have throughout the years increased their commitments in developing countries due to this being more profitable for them. One reason is due to the large quantity of resources found in these parts of the world. However, in Nigeria it’s commonly believed that Economic development has not attained the results which one would have hoped for despite the high degree of trade openness (Jelilosv, Gylych; Onder, Evren, B 2016).
By its nature, globalization concurrently provides economic opportunities and economic threats. More so, it seems to be biased and has unequal considerations on countries. Above all developing economies are holdout for benefiting from globalization due to their economic status. Cross-country capital flows are growing rapidly, and domestic systems are consequently increasingly exposed to shocks emanating from abroad. Since cross-border financial flows tend to be more volatile than domestic flows especially equity flows, such flows heighten the risk of financial crisis in many developing economies (Earnest, 2004). Really, exposure of developing economies to external shocks of global financial integration raises capital flight and inflows. This affects exchange and interest rates, hence pose new challenges of macroeconomic management of the economy. Dos Santos as cited in Suleiman (2004) believed that, “unequal exchange led to the development of dependency relationship where third world has their economies conditioned by the growth and expansion of another economy. Nigeria as an example experienced dependent economy which is considered among the factors responsible for economic slow growth rate. Globalization imposed a dependent capitalist social system and western values in the forms of industrialism, market principle and institutions on Nigeria. A culture of dependency also was institutionalized through internationalization of capital and social life, Underdevelopment and inferiority complex were also instituted as a cumulative product of Western hegemony on Nigerians (Suleiman, 2004).
Nigeria has been experiencing disappointing performance in terms of growth in GDP and the general development of her economy. As a result, there is no improvement in the reduction of poverty. In the last decades, the global economy suggests a challenge; the utilization of the opportunity engineered by globalization while at the same time managing the problem and tension it poses, for developing countries like Nigeria. Rather than strengthening the economy, globalization seeks to retrench it, thus Nigeria enters the global market at a competitive disadvantage as a largely mono-product economy with weak currency, shrinking indigenous industrial space, mounting debt profile, corruption-infested political and economic climate. This unacceptable posturing imposes a systematic dispossession and exploitation of initiatives and resources and also the misuse and squandering of the economic surplus by the regional and local power elites.
Obviously, liberalization of trade will certainly pose serious challenges on industrial development of the developing economies. Increase competition in a single developed market will put away developing economies far from fetching benefits of the global market, because they cannot compete with developed nations. Developing economies cannot protect their industries, hence multinational corporations dominate their soil thereby ripping the benefits supposed to be ripped by developing countries. To a large extent, developing economies would be denied of their chances to benefits from trade comparative advantage due to mass production which lessen cost unit. More so, absolute advantages will not doubt be shared among the developed economies.
Globalization foster global governance of global economy by developed economies and international institutions in the so-called grouping of G-7, G-10, G-15 and G-22 where international economic issues are most often discussed by the groupings without due consultation of developing economies or their representatives. This has posited the superiority complex and/or re-introduction of colonialism (i.e. neocolonialism). Exotic brand of politics (favoring world developed economies) has been nurtured to developing economies.
Characters, ideas, values and norms of developing economies citizens are intelligently and logically being controlled, regulated through the power of world media and communication gadgets to enable the developed countries transmit their mission which will place them at the advantage position from the globalization’s integration. In general, the initiators of globalization must consider themselves first in terms of benefit accruable, consequently, the rationale why globalization is considered to be biased, hence tailored towards providing benefits to the developed nations at the detriment of other participants (developing economies) to the so-called globalization.
In a nutshell, globalization seems to be initiated to serve as conduit for transmitting modern colonialism by the power of technology across the world. Alternatively, it is considered as a mechanism to efficiently influence rapid development in the developed countries and partially provides opportunities for economic development in developing countries with bearable hardships at any different stage to break through. Therefore, the broad objective of this research work is to study entirely, the relationship between globalization and Nigeria economic development. Today we have two main views on globalization one given by anti-globalists and the other by supporters of globalization or simply globalists.
The anti-globalists view globalization as controlling and influencing force used by overseas corporations to dominate international trade. This criticism has given rise to theories such as Dependency Theory and Neo Colonialism. It is viewed as means of keeping developing countries exactly that. Low paid workers, GM seed pressed on developing world farmers, the selling off of state owned industry in order to qualify for IMF and World Bank loans and the increasing dominance of Western corporate culture across the globe has come to symbolize globalization for its critics (The Guardian, 2002).
However not everyone agrees that globalization is evil. According to globalists globalization is the only true way to beat poverty. They argue that foreign direct investment will help developing nations to industrialize, create jobs, and acquire manufacturing skills. According to the Chancellor of the Federal Republic of Germany (2007) globalization presents huge opportunities for emerging economies by bringing jobs and business opportunities to areas which would have otherwise struggled economically (Jelilov, Gylych; Chidigo, Mary; Onder, Evren, 2016). Since we assume that globalization brings economic development it is important to explain what development means in economics. Economic development has been used with other terms such as growth, modernization and industrialization. It is, in other words, a transition from a simple, low-income economy to a modern, high- income economy. Its scope includes the process and policies by which a nation improves the economic, political, and social well-being of its people. Though it is often measured by rate of change of gross domestic product, it is generally understood in terms of increase in per capita income, and attainment of a standard of living equivalent to that of industrialized countries. Economic growth implies a change in the way goods and services are produced, not merely an increase in production achieved using the old methods of production on a wider scale. It also involves improvements in a variety of indicators such as literacy rates, life expectancy, and poverty rates. In addition to increasing private incomes, economic growth also generates additional resources that can be used to improve social services such as healthcare, safe drinking water etc. (Jelilov, Gylych; Muhammad Yakubu, Maimuna, 2015).