Impact of globalization on poverty rate

1. IMPACT OF
GLOBALIZATION
ON POVERTY IN
PAKISTAN
Group members:
Abdul Qadeer
Muhammad Suleman
Muhammad Saad
Dolat Kumar​

2. AGENDA
Introduction​
Literature Review
​Data + Methodology
Results
Conclusion
Recommendations

3. INTRODUCTION
• The study's primary goal is to examine how globalisation affects
economic growth.
• Regression analysis is used in the study to determine how much
globalization has impacted Pakistan's poverty rates.
• Even after controlling for geographical heterogeneity, there is still
a strong link between globalization and poverty.
• The trend of poverty in Pakistan has been fluctuating over the
years, but overall, it has remained high.
• Pakistan has been experiencing the effects of globalization for
several decades now. The trend of globalization in Pakistan has
been a mixed one, with both positive and negative impacts on the
country's economy, society, and culture.
3

4. LITERATURE
REVIEW

5.  Hameed & Nazir (2009)
They discovered that while globalization improves resource
usage, raises living standards, and boosts economic growth,
it also makes poverty levels worse.
 Faridi & Chaudhary (2013)
They ultimately came to the conclusion that the importance
of job creation is positively impacted by globalization.
 Dr Awan (2019) IMPACT OF
GLOBALIZATION ON POVERTY IN PAKISTAN.
Globalization has benefited emerging nations in a
diverse range of ways.

6.  A/c to Dr Farooq (2021) “Empirical
Analysis of Globalization-Poverty”
The annual poverty rate in Pakistan has been shown to have
significantly increased as a result of globalization, which
pushes the poor to the side and leaves them behind.
o 80 percent of the world's 7 billion inhabitants live on less than
$10 a day
o Pakistani residents earn less than 5.5 dollars per day which is
very terrifying
 Technology and IT parks are
particularly lacking in Pakistan.
The country of more than 220 million people only has 14 IT
centers.

7. DATA AND
METHODOLOGY

8. SOURCE OF DATA
 World Bank
 United Nations
 International Monetary Fund
 Pakistan Bureau of Statistics
 National Database and Registration Authority
 The data is collected from the year 1995 to 2022

9. 9
Poverty
rate
FDI
CPI
Trade
GNI
Population
GDP
Globalisation
index

10. SUMMARY STATS

11. ECONOMETRIC MODEL
• Choosing the best model using:
 The right functional form can be ascertained using several diagnostic tests, such as Ramsey's (1969) RESET and
Brown, Durbin, and Evan's (1975) CUSUM test.
 Moreover, we may examine the functional form of the model using adjusted R-square.
Best model:
Poverty= 𝛽0+ 𝛽1FDI + 𝛽2CPI + 𝛽3Trade + 𝛽4population + 𝛽5GNI+ 𝛽6GI +U
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12. REGRESSION OUTPUT 12

13. RESULTS AND INTERPRETATION
13
• R-squared value is 0.856 which tells the goodness of fit in the model. 85 percent of the variation in the
poverty rate is explained by the explanatory variables in the model.
• Increase in trade decreases poverty
• Increase in population increases poverty
• Increase in Globalisation index decreases poverty.

14. STUDY’S RESULTS:
• The study's results show that Pakistan's efforts to reduce poverty have seen a
variety of effects from globalization.
• Although globalization has boosted economic development and improved
employment possibilities, it has also expanded income inequality, and its positive
effects have not been shared fairly
• the study concludes that globalization has had a large but unequal influence on
Pakistani poverty and that more measures are required to assure that the gains of
globalization are distributed more evenly across society.
• Even though globalization has boosted economic growth and development across
many nations, it has also had a detrimental impact on poverty rates, especially in
emerging countries
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15. CONCLUSION:
• Globalization's impact on poverty in Pakistan
depends on economic policies, context, and
integration of global economy in its own terms.
• Globalization has contributed to income inequality,
marginalization, and erosion of traditional livelihoods.
• Globalization has had both positive and negative
effects on poverty in Pakistan, with some arguing
that it has helped reduce poverty, while others argue
that it has increased inequality, undermined local
industries, and contributed to displacement of
marginalized communities.

16. 16
Recommendations:
1. Encourage investment in human
capital:
2. Promote entrepreneurship:
3. Ensure that globalization benefits all:
4. Promote fair trade:
5. Encourage foreign investment

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