Globalization, by definition, is the integration and democratization of the world's culture, economy, and infrastructure through transnational investment, rapid proliferation of communication and information technologies, and the impacts of free-market on local, regional and national economies.
The phenomenon of globalization has created a dichotomy of perception dividing the world into plethora of apprehensions and appreciations due to the intense velocity which the information about people, products, nature, environment, politics and economy disperses across borders, across countries and nations creating virtually one world into a global village.Here the golden words of late Dr. Mahbub ul Haq provides the true vision:
"Globalization is no longer an option, it is a fact. Developing countries have either to learn to manage it far more skilfully, or simply drown in the global cross currents."

Globalization is multidimensional and impacts all aspects of life– economic social, cultural and political. Globalization in production and labor markets is leading to increasing outsourcing of parts, components, and services. The drive towards market liberalization has rapidly accelerated the pace of globalization during the past decade.
Theoretically
• Globalization opens up markets and ensures competition
• Removes inefficiencies and leading to greater growth.
• Ensures specialization takes place in areas of comparative advantage.
• For labor abundant economies this means increased employment as well as growth.

CAUSES OF GLOBALIZATION
The origin of globalization can be traced back till the 16th century when the West started to explore and discover for the new worlds and continents, bringing the English to India in form of East India Company, there first multinational was born for us and the rest is recorded history. The process of global economic integration was perpetrated at the behest of World War II and the first Great Depression, when the leaders of Britain and the US fumbled with the idea of reconstructing the war-torn world monetary system with a focus on favouring free of capital internationally, turn endure a liberal, capitalist world at the end of war to counter the shadows of Socialism and Marxism. To promote the new monetary world order, a conference was convened in July 1944, at Bretton Woods, New Hampshire, to create the world's most powerful institutions: the International Bank for Reconstruction and Development (the World Bank), and the Internationally Monetary Fund (IMF). With the development of international financial markets in 1970s and the debt crisis of developing countries, several developing countries opted for stabilization and structural adjustment programs, to qualify for the loans from IMF and WB. The first IMF/WB Structural Adjustment Loan (SAL) was given to Turkey, in the backdrop of appropriate market oriented policies, accompanied with conditionalities, in 1980. These programs in a nutshell were aimed at liberalization of developing-countries markets. The reforms and conditionalities imposed laid basic foundation to open economies to steer the mechanism of economic integration giving birth to the most controversial of all among international organizations, the World Trade Organization.

ECONOMIC OVERVIEW OF PAKISTAN
Economic Growth is a wild horse; it needs to be tamed to serve the real interests of the society. If the horse misbehaves in some societies, leading to deprivation of many human lives, then the fault is not of the horse but the rider. Economic growth is essential in poor societies — but even more is its structure and distribution.
----Dr. Mahbub ul Haq (Late)
Pakistan is a mixed economy consisting of a public sector domination of major sectors of the economy, which is changing very quickly under the freer market agenda of WTO making the role of government to minimum level under the globalization policies guided by World Bank and IMF. Although with the growing awareness among the intelligentsia of the country about the core issues of development not being address appropriately yet we have seen the growth role of institutions of globalization mentoring the economic direction of the country. In the preview of economic sanctions imposed on Pakistan in 1998, political instability, state-of-war with India, and most importantly the 11th September Crisis has not been able to hamper the country which these events has the potential. Economic growth remained mixed, in a year when many other Asian countries were recording negative growth. Inflation did not accelerate significantly, as was anticipated by most external forecasters. The current account deficit declined further, so that Pakistan's short-run balance of payments position remained viable once lending by the IMF and World Bank was resumed and debt had been rescheduled by the London and Paris Clubs. Complacency would nonetheless be out of place. Exports have been declining, normal capital inflows have almost dried up, and the country's weak credibility and policy uncertainties have discouraged foreign direct investment in particular and productive investment in general. Pakistan is the only country in South Asia that has recorded a lower rate of growth in the 1990s than in the preceding decades. Suspension of the convertibility of the foreign currency deposits, and the London and Paris Club rescheduling, were essential in the short run, but they will tend nevertheless to compromise Pakistan's ability to borrow internationally for years to come. The social indicators — literacy, mortality, fertility, and poverty — remain poor, even for a country with Pakistan's per capita income, and the squeeze on the budgets of the provincial governments suggests that this is unlikely to improve much in the short run. The country clearly faces a difficult challenge in reviving its economy and in achieving a level of social standards in which it can begin to take pride.

PAKISTAN’S EXPERIENCE WITH GLOBALIZATION
Pakistan liberalized its economy as part of the structural adjustment conditionalities of the IMF program and World Bank lending. Pakistan’s expansion in trade has not been as spectacular as that of some of the fast globalizers. Pakistan’s exports merchandize exports have not kept pace with that of the rest of the world.
Pakistan’s experience with globalization between 1990 and 2002 has not been great. Pakistan’s share in the world merchandize exports has fallen from 0.16 to 0.15. China’s share in world merchandize exports went up from 1.80 to 5.04. Malaysia’s share in world merchandize exports has increased from 0.85 to 1.44

 PAKISTAN’S TRADE SECTOR
While the size of the trade sector relative to GDP has grown from about 28 percent in 1980 to about 31 percent in 2003 it has been subject to large year to year variations.
The trade sector has on an average grown only slightly faster than the growth of the economy. The overall growth of the economy and the social sector development indicators, particularly for the decade of 1990s, do not show any significant gains from the liberalization process. Poverty which was declining till the early 1990s started to increase thereafter till the end of the decade.The increase in the openness of the economy did not translate significantly into any enhancement of growth and subsequent decline in poverty
Pakistan’s trade sector did not grow significantly during the 1990s despite the liberalization because of
• narrow range of export markets and export products;
• modest short-term demand responsiveness for major
Pakistan export categories;
• small foreign direct investment in tradable sectors;
• anti-export bias in the trade policies of Pakistan;
• inadequate infrastructure in certain potential growth sectors;
• absence of trade risk mitigation structure to support the entry of new exporters and
• inadequate development of non-traditional markets

GROWTH RATE OF EXPORTS AND IMPORTS


 GLOBALIZATION AND RE-INDUSTRIALIZATION IN PAKISTAN
Originating from free-trade doctrine, some opinions claim that Pakistan, under globalisation, should forget about possibilities of a new wave for industrialisation altogether. Though controversial, the claim also argues that the East Asian ‘Gang of Four’ days are over, and globalisation - meaning flow of foreign direct investment (FDI) and openness - will determine whether the country can industrialise or not. Such arguments also advise that Pakistan should try to attract FDI through the policies of liberalisation, deregulation, and privatisation. Most importantly, the government has to be cut-to-size and be kept out of markets in the process.
However, on the opposite side, forceful voices originate from at least two quarters, which at a certain level are mutually supportive approaches to long-term economic development. Broadly speaking, one is new institutionalise political economy and the second is new growth and new trade theory
The moral of the story is that industrialisation under globalisation for long-term economic development is too important an activity to be left to blind forces of FDI and openness.
All three sectors, first (government), second (business), and third (civil society) must work together towards achieving national development objectives and strengthen national institutions. Each sector can contribute a set of competitive advantages.

 GDP GROWTH RATE
Pakistan’s experience also shows that in the decade of 1990s, significant trade liberalization was accompanied by a steady decline in the GDP growth rate, from 6.1% in the 1980s to 4.5% in the 1990s. Similarly, wide-ranging policy changes and incentives to encourage foreign investment did not lead to any significant increase in investment, apart from larger investment in the private power sector in the mid-1990s in response to a very attractive incentive package. In fact, overall investment declined from about 19% of the GDP in 1989-90 to only 15% in 1999-2000. Even on the export front, the trade performance has not been satisfactory. Despite substantial reduction in tariff rates, removal of virtually all non-tariff barriers and successive devaluations of the currency (leading to an annual depreciation of about 10% in the exchange rate, from Rs 24 in 1990 to Rs 60 per dollar in 2000), the growth in exports in the 1990s was only 4.5% per annum, compared to 19% in the 1970s and 8.5% in the 1980s.


 GROWTH RATES OF GNP PER CAPITA
Real Gross National Product (GNP) per capita is a useful aggregate measure of annual income per person, net of growth in population and prices. Data shows that in 1947 real GNP per capita was Rs. 1,476 which has multiplied three and a half fold to Rs. 5,128 in 2001. In other words, an average Pakistani today commands purchasing power that is three and half times greater than in 1947 [Social Development in Pakistan, Annual Review, 2001] in constant prices of 1980-81.



 FOREIGN TRADE AND INVESTMENT LIBERALIZATION
Import liberalization in Pakistan has been a rather gradual process, as exemplified by the gentle downward trend in the average import tariff rate.
The decline in import duties as a revenue source can be seen from the fact that their contribution to total taxes has fallen from 50.4% in 1987-88 to 15.9% in 2000-01 [Social Development in Pakistan, Annual Review, 2001].



 CAPITAL FLOWS
FDI involves the long-term interest of one entity resident in one economy in an enterprise resident in an economy other than that of the foreign investor (United Nations Conference on Trade and Development [UNCTA], 1998). FDI had shown a 16 percent growth during the post 1988 decade.

1977-78 to1987-88 1988-89 to1998-99
Growth in FDI
(US $ million) - 16.0


 DEGREE OF OPENNESS
The degree of openness has increased; both exports and imports have been contributing factors [Kemal, 2001]. However, the drawback is that the degree of openness has widened the balance of payment deficits, and this problem will continue unless third world country like Pakistan is provided enhanced access to the international market.


DEGREE OF OPENNESS


 AVERAGE TRENDS IN UNEMPLOYMENT
But in-spite of that deficit there is a significant increase in growth rate of output, trade and FDI inflows but the important question is: To what extent increase in these growth have helped the growth of employment in Pakistan?
_______________________________
Years Unemployment
________________________________
1980-90 3.5
1991-95 5.4
1996-2000 6.0
1991-2000 5.7
1999-2000 6.2
2000-2001 1 6.7
_________________________________

Thus despite increase in growth rate of output, trade and FDI. The unemployment rate, increased from an average of 3.5% during 1981-90 to 5.7% during 1991-2000, went up further to 6.7 percent in 2000-01, official statistics, as presented in the Pakistan Economic
Survey (Statistical Supplement) for the year 2000-01, actually report unemployment in 2000-01 to be higher at 7.8 percent.

IMPACT OF WTO ON PAKISTAN
Pakistan like any developing country rely on foreign aid on one end, and the whatever is earned through exports in terms of foreign exchange, the major chunk is paid back to the international lenders leaving little room and money for the drastic economic growth cycle to be ignited. In addition, with the appreciation of dollar, or devaluation of local currency the standard of living of an American may increase as the Pakistani goods become cheaper from him or her, but for Pakistan this devaluation hits directly the purchasing power of a common man burring into the vicious cycle of poverty.
The implications to adopt the free liberalization under WTO has many pros and cons but until now there has been no comprehensive study to capitulate the total impact in economic terms focusing overall and individual sectors of the economy in particular. WTO demands open market access for foreign goods and services in the local market without any discrimination by creation of tariff or non-tariff barriers. Pakistan is also required to provide a Most Favoured Nation (MFN) status to all trading partners which means non-discriminatory treatment among the members implying on any imports or exports origination from respective countries. Pakistan under IMF conditionality and structural adjustment program Pakistan has to reduce its tariff from 65% to 30% gradually, and WTO also requires the same.


Several WTO agreements have a direct bearing on Pakistan efforts, some examples are:
Rationalizing the Tariff Structure
Some Progress has been made but the focus for trade liberalization during the next one to three years should be on reducing tariff dispersion, increasing transparency, making indirect taxes trade neutral, and closing loopholes in exemptions
The Agreement on Agriculture provides significant opportunities for Protecting Food and Livelihood Security and Rural Development Opportunities through the designation of Special Products and Special Safeguard Mechanisms.
We have not been able to take advantage of Pakistan’s Agricultural potential in Trade because of
• Inadequate Research
• Structural problems within Pakistan's agri-food economy;
• Barriers encountered in accessing export markets; and
• Competition from other countries' exporters.
Implications for Pakistan of Abolishing the Textile and Clothing Export
• The overall short run impact of MFA abolition will be positive on the textiles sector and negative on clothing.
• This will result from the improvements in efficiency of its resource allocation and in world market prices outweighing the loss of quota rents
Despite liberalization/WTO there are several challenges to increased market access:
• exceptionally high tariffs on the products of the export interests of the developing economies;
• tariff escalation impacting adversely the exports of value added products;
• subsidies on agriculture sector,
• indiscriminate use of anti-dumping and countervailing duties, etc.
The Biggest Constraint is significant absence of capacity to analyze the emerging issues in WTO agreements and the implications for Pakistan. The general knowledge of the Agreement and its provisions is high among officials, traders and non-governmental organizations. However, detailed practical understanding of the Agreements and the consequences, particularly for market access, is lacking.
Maximizing Gains from the WTO
Very few institutions are in Pakistan where different stake holders can interact on the WTO issues. Most of the positions taken on WTO issues in Pakistan lack an empirical research basis and are most often based on assumptions. A clear policy perspective emerging through consultations is necessary before the country commits itself to any position at the international level.
And before it does any of the above
Most important barriers to globalization are “institutional and jurisdictional discontinuities” and the diversity of national institutional arrangements and not traditional border-type measures such as import tariffs, quantitative restrictions, and restrictions on the flow of foreign capital. Elimination of these discontinuities, especially those in the area of labor mobility can provide large benefits

SOME IMPORTANT LESSONS
Pakistan’s experience with economic liberalization has thrown up some important lessons and criteria to judge whether or not such liberalization would lead to higher economic growth. These can be summarized as follows:
* Unless the initial conditions and the international economic environment are favourable to attract foreign investment and to utilize the opportunities created by tariff and market reforms, these can become counter-productive. In the case of Pakistan, the reform process, launched in early 1991 coincided with economic sanctions imposed by the US from October 1990 as a result of Pakistan’s unclear policy and by all G7 countries in June 1998, following the nuclear tests. Lower Tariffs weeded out some of the uneconomic industries and slowed down the industrial growth rate, but due to sanctions and recurrent political instability, this loss was not compensated by new investment in value added sectors.
* The speed and sequencing of reforms must be carefully orchestrated. If tariffs are reduced drastically before expanding the tax base and improving tax administration, revenues will fall, thus accentuating the fiscal problems. Similarly, financial sector reforms to raise interest rates for government borrowing should follow and not precede sustained reductions in public sector expenditures because higher cost of borrowing does not automatically lead to lower expenditures.
* All the components of globalization do not move in the same direction. While there is free flow of information and capital, labour movement is restricted. Even in trade, high tech products are traded freely, but simple manufactures like textile and leather goods continue to be protected and agricultural trade is heavily distorted by huge subsidies provided by the US, Europe and Japan ($390 billion in the year 2000). In such an unlevel playing field, countries like Pakistan, which are primarily dependent on agricultural or textile exports, cannot benefit much from globalization. In fact, successive devaluations lead to a progressive depreciation in export prices and therefore lower exports.
* Excessive reliance on demand management, at a time when the process of growth is being adversely affected by several non-economic factors, can further slow down the pace of economic growth. With the reduction of tariffs, revenues from custom duties in Pakistan declined from 6% of GDP in 1989-90 to only 2.2% in 1999-2000. The reduction in tariffs also led to closure of many industrial units, which were previously functioning under heavy protection. This not only slowed down the rate of industrial growth from an average of 8% in the 1980s to 3.9% in the 1990s, but also led to a corresponding decline in revenues from excise duties and sales tax.

CONCLUSION
Pakistan's economic performance since integration with the global economy can be characterized by an increase in GDP growth rates, decline in import duties, an increase in FDI during the post 1988 decade, a sharp increase in openness leading to a deteriorating balance of payments situation and continued high levels of poverty and unemployment. As globalization involves enterprises and workers of nearly all the world's countries in the goods as well as in the service sector. Consequently, the majority of the world's labour force is experiencing the effects of international competition.
There is need for a coordinated and collaborative effort among the South Asian countries to expand trade in the region. Pakistan needs to diversify its exports base and shift from primary agricultural products to more value added and industrial products. Privatization will have to be placed at the top of the Government agenda. Pakistan should increase exports not only to earn more foreign exchange but also to join the world community in globalization. Similarly, direct foreign investment is crucial for resource mobilization. It is therefore, strongly recommended that the government of Pakistan must attract foreign direct investment by giving them various incentives. Furthermore, financial depth is also playing crucial role in the overall development of the country. It is important that we should strengthen our financial sector for capital flow. Of course, political stability is crucial for economic development of the country.