The world is going smaller with every passing day as powerful forces of technology and innovation have expedited the globalization of trade, commerce and industry.
On the economic side, technology is the main driver. The relative cost of ocean, air and road transportation continues to fall, removing an obstacle to cross-border merchandise transactions. The fast revolution in information and communication technologies has numerous dramatic impacts on trade in services. The improved availability of information technology and declining transaction costs have further stimulated international flows of capital, labor and technology. None of this would have been possible, of course, in the absence of required international support to pursue policies consistent with the globalized world order.
Different countries have removed, open or hidden, trade barriers to develop and grow collectively. For the purpose, the globalized economic cooperation order was evolved in 1947 in shape of the general agreement on tariffs and trade (GATT) and then world trade organization (WTO) was created in 1995 to help develop a worldwide economic order led by the U.S. and European countries. It is the main global agreement to pave the way for a globalized world. However, China has emerged as a major global player in recent years to pose a serious threat to the technological colonialism of the West.
It is also imperative to note that global trade partners should abolish strict exchange controls and liberalize the capital accounts transactions to help the poor and under-developed countries to reap the benefits of international agreements. Otherwise, the phenomenon of digitalized globalization, in the wake of international trade agreements, would further widen the divide between developed and poor countries.
Globalization will further grow in a globalized world where the probability of purchasing goods and services, from domestic and foreign suppliers, was the same and country’s trade is the main source of its income. Pakistan is clearly away from this benchmark of globalization; the people of a developed country place a much higher proportion of their savings in domestic assets rather to invest in under-developed countries. Real interest rates and capital/ labor ratios continue to diverge across countries; despite the incentive for capital to flow from where it is abundant, to where it is cheap, and from where real rates are low to where they are high.
The globalization phenomenon is unlikely to be rolled back despite China’s ever-growing role in international affairs. It will considerably expand and grow due to IT-based technological revolution in the world. In fact, ICT has colonized the whole world due to intellectual/ technological hegemony of the multinational companies. Global powers have, now, used their technology, instead of armies, to conquer the poor countries. It is the big fact that technology marches only in one direction and that is forward. Further technological progress and development have delivered a further reduction in the cost of acquiring information/ data and communication technologies have ensured a safe and sound process of speedy financial transactions across the globe.
This electronic revolution has, altogether, changed the way people live, think and move in this everchanging world. The way people live and work is both a cause of and a response to a series of converging and unstoppable trends. The trends now are to develop new technologies which get faster, lighter to help in the more powerful flow of information including rising customers’ expectations and, finally, the business change encompassing a more competitive climate. This e-revolution is already radically changing daily life, trade and business irrevocably. Experts are consistently warning that any company, which thinks that it can wait until new concepts or applications are more developed, runs a great risk of being left far behind. It is quite likely that organizations that fail to keep up with the opportunities of new technology will almost certainly see their market position surpassed by faster-moving competitors. Fall of global cellular giants like Nokia and Blackberry and rise of iPhone, Samsung and other Chinse phone companies is an apt example. The decision to move into new technology is a strategic one. One has to be satisfied that it falls into with overall business objectives and strategy and it will also work as an integrated part of business objectives.
Similarly, research is an integral part of the technology-based globalized world. It is often said that the basis of the U.S. might is not its armed forces but universities, having a strong culture of research and innovation, which produce the best men to lead the nation. Pakistan is also needed to understand how the information technology works and how the citizens can take full benefit of it. Getting up to speed on all this and beginning to implement new systems could seem a daunting task but acceleration is the main source of promoting globalization and strong economic growth.
The world was divided into Russian and American blocks in the cold war era but, today, the whole world has been divided into developed and technologically poor countries, called the fourth world. Meanwhile, the mantra of Islamic block has proved useless for Pakistan, especially, in the wake of recent developments in Indian Occupied Kashmir. Pakistan should, therefore, work for forging an economic block of third world countries to counter the hegemony of globalized world order led by the U.S. This idea was first propagated by the late ZA Bhutto in 1976 after the success of the Islamic Summit of 1974. He, however, could not further it due to elections in 1977 and the rest is history.
In order to reap the economic gains from international trade, the government of Pakistan should accelerate domestic capacity to produce goods and services for foreign markets and to make its economy an attractive destination for foreign trade and investment. It goes without saying that the multibillion dollars CPEC project is the real chance of the century to develop Pakistan as an inevitable global player in the restive South Asian and Gulf regions. But Pakistan will have to develop and strengthen its relevant educational and state institutions to reap the benefits.