The Effects of Globalization on Economic Development in Nigeria (a Case Study of Ministry of Petroleum)
Chapter One
OBJECTIVE OF THE STUDY
The purpose of this study is to determine the relevance of globalization in the Nigeria economy. Specifically the study will determine the following.
- Determine the effect of globalization on economic development
- To find out how globalization can assist in Nigeria’s economic development
- To examine the effects of globalization on the Nigeria economy
- To identify the obstacles to globalization and economic development in Nigeria.
- To suggest the possible strategies for curbing the and verse effects of globalization on Nigeria’s economic development in the globalized world.
CHAPTER TWO
REVIEW OF RELATED LITERATURE
GLOBALIZATION
Globalisation is nothing new as ancient trade routes such as the ‘Silk road’ spanning several countries, have existed since the advent of mankind. In Europe, the first extensive trade network was established by the Romans via trade with other regions especially in the Mediterranean Sea. Other trade networks such as the Hansa or the British Commonwealth are more examples of trade routes in history. However globalisation even in past eras, has not just been seen as a tool for economic activity but also caused events such as the discovery of America. This shows that globalisation cannot be seen as a new process even though the speed of globalisation has increased phenomenally in the last decades. The term globalisation is often used in contexts which are at first sight not directly related to our topic of research or only have some vague connections to it. This has to do with the fact that the term globalisation has evolved from the term “modernity” and therefore combines many different aspects (Schuurman, 2001). The multiple possibilities to understand the term of globalisation often leave the reader wondering about its actual meaning or its part in the paper just about to be read. Globalisation can be defined as “the network of connections of organisations and people across national, geographic and cultural borders and boundaries” (Pearson Education, 2002). According to a more detailed definition “globalisation refers to the increasing importance of international trade, international relations, treaties, alliance etc. International of course means between or among nations. The basic unit remains the nation even as relations among other nations become increasingly necessary and important” (Daly, 1999, p.1). To be more specific and to reveal the first similarities with our topic, it seems appropriate to include the following estimation: “while much of this process comprises economic interaction it also includes cultural, political and ideological relations” (Howlett & Ramesh, 2006, p.175). “It is often used to explain the development of economically underdeveloped countries because it is assumed to help economic growth” (Wohlmuth, 2001, p.20). However, this last statement is not always true as Wohlmuth (2001) himself explains in his book that weaker States are often hindered in their growth because of the effects of globalisation. By using the above definitions we can see that globalisation is a network of organisations across nations therefore accentuating the importance of international relations. It has often been seen as a purely economic aspect however, globalisation also comprises cultural, political and ideaological relations. Although globalisation is often used to explain the development of under developed countries, the effects of this concept are not always as positive as may seem.
GLOBALIZATION AND ECONOMIC SECURITY
The term globalization being generally refers to as a multidimensional phenomenon, had been used and interpreted in many different contexts, varying from economic, political, cultural and environment issues. Gunter and Hoeven (2004) describe globalization as the gradual integration of economies and societies driven by new technologies, new economic relationships and the national and international policies of a wide range of actors, including governments, international organizations, business labour and civil society. This implies that there are several drivers of globalization as identified in the definition above. These include technological development that enables easy flow of information and reduces transport cost; change in policy attitudes that favour liberalization of foreign investment rules; diminishes protectionism and makes migration easy. Hence, it supports deep integration of the world, fondly expressed as a “global village”. Egwaikhide and Ogunleye (2011) purported in their findings that historically globalization begins with liberalization in three important activities in quick succession: first in international trade, then second through foreign direct investment (FDI) and finally through financial flows. This literature review draws close attention to the impact of globalization on economic security from the standpoint of both positive and negative effects on developing countries as well as providing some great debates on the controversial and unambiguity issues of effects of globalization on economic security with special emphasis on some macroeconomic variables like income inequality; unemployment, poverty, trade volatility and collapse of local infant industries and other mixed effects. In respect to the impact of globalization on income inequality, more than fifty (50) authors in various researches concluded that globalization has widened income inequality within as well as between countries. In the same vein, Stiglitz (2003) supported these contributors by arguing that globalization impoverishes poor societies rather than enriches them. Furthermore, Cornia and Court (2001) and Cornia and kiiski (2001) showed that the widespread surges in inequality were linked to excessively liberal economic policy regimes and to the way in which economic reform policies, like Structural Adjustment Programme (SAP) were carried out (Ginther and Zavodny, 2002). Similarly, Singh and Dhumale (2002) indicate that, with respect to developing countries, neither trade nor technology is necessarily the most important factors in increasing income inequality; though they agree that globalization ( in the form of financial liberalization rather than trade) causes income inequality gap. Weisbrot and Baker (2002) and Weisbrot et al. (2000) all claimed that the recent globalization process has led to diminished progress and lowered growth compared with that of the 1970s and 1980s ideology.
CHAPTER THREE
RESEARCH METHODOLOGY
Research design
The researcher used descriptive research survey design in building up this project work the choice of this research design was considered appropriate because of its advantages of identifying attributes of a large population from a group of individuals. The design was suitable for the study as the study sought the effects of globalization in economic development in Nigeria
Sources of data collection
Data were collected from two main sources namely:
(i)Primary source and
(ii)Secondary source
Primary source:
These are materials of statistical investigation which were collected by the research for a particular purpose. They can be obtained through a survey, observation questionnaire or as experiment; the researcher has adopted the questionnaire method for this study.
Secondary source:
These are data from textbook Journal handset etc. they arise as byproducts of the same other purposes. Example administration, various other unpublished works and write ups were also used.
Population of the study
Population of a study is a group of persons or aggregate items, things the researcher is interested in getting information the effects of globalization in economic development in Nigeria. 200 staff of ministry of petroleum, Abuja was selected randomly by the researcher as the population of the study.
CHAPTER FOUR
PRESENTATION ANALYSIS INTERPRETATION OF DATA
Introduction
Efforts will be made at this stage to present, analyze and interpret the data collected during the field survey. This presentation will be based on the responses from the completed questionnaires. The result of this exercise will be summarized in tabular forms for easy references and analysis. It will also show answers to questions relating to the research questions for this research study. The researcher employed simple percentage in the analysis.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
Introduction
It is important to ascertain that the objective of this study was to ascertain the effects of globalization in economic development in Nigeria. In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges of the globalization in economic development in Nigeria
Summary
This study was on the effects of globalization in economic development in Nigeria. Three objectives were raised which included: Determine the effect of globalization on economic development, to find out how globalization can assist in Nigeria’s economic development, to examine the effects of globalization on the Nigeria economy, to identify the obstacles to globalization and economic development in Nigeria, to suggest the possible strategies for curbing the and verse effects of globalization on Nigeria’s economic development in the globalized world. In line with these objectives, two research hypotheses were formulated and two null hypotheses were posited. The total population for the study is 200 staff of ministry of petroleum, Abuja. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study. A total of 133 respondents made front production human resource managers, administrative staff, senior staff and junior staff were used for the study. The data collected were presented in tables and analyzed using simple percentages and frequencies
Conclusion
After looking at the analysis of our work, we can see that the effects of Shell in Nigeria are not as positive as Shell is often trying to broadcast. Shell has some positive effects on the Economic Development of the country by for example increasing the workforce although overall the intention of Shell to increase the Economic Development of Nigeria is rather low sometimes because Shell is profiting from the unstable political structure or because Shell’s basic responsibility has been to maximise returns on invested wealth for shareholders. Furthermore, Shell as an oil production company is always having a negative effect on nonrenewable resources, and is also having hindering effects on Economic Development through its impact on natural resources. As Shell has changed its attitude to a more sustainable approach towards Economic Development, we must look at the effects of Shell in the times before the 1990´s and after. In the former instance, Shells negative effects were clearly stronger than the positive ones, whilst in the latter, Shell is trying to change the negative effects it is having on the country into positive ones. However up to now, Shell even if producing a lot of wealth in Nigeria, has left the common people in poorer conditions than they were prior to the beginning of their operations. So as a conclusion, Shells effects differ from variable to variable. In relation to structural change, Shell is having a positive effect, while on the two other variables the effects could be improved with the aim of having an overall positive effect on Economic Development.
Recommendation
We think that Shell should try to return more of the wealth it has been taking from the country to the people. This could be done by paying higher wages or more importantly, paying the royalties directly to the people. With this they would also minimise the influence they have on the Government which in turn would have a positive effect on stability. Shell through the SNG, is having a positive effect but we think Shell needs to increase their investment in the economic infrastructure of Nigeria and should include this in their business operations. Furthermore, they need to improve their environmental responsibility policies. As long as it is cheaper for Shell to pay ransom for kidnapped workers rather than helping the area through striving towards lasting Economic Development, Shell will always face security problems. In the end Shell should see itself as a good citizen and part of the country. According to Ibrahim (2005, p.19) “Economic Development is attained through the utilisation of available resources to enhance the social and economic well-being of the society, it is only the people in any society that can generate and sustain Economic Development”. The IMF is an international financial organisation based in Washington and controlled by the developed World although it imposes its conditions on the developing world. How effective can this organisation be if directly affected parties are not involved in decision making? It is possible to suggest that if this situation persists, where directly affected people are kept out from the decision making process, then from our point of view the results of IMF involvement will remain the same: a failure. This however is not a problem just for Nigeria but for the entire developing world. It is our belief that although the IMF and other supranational bodies are above State governments this should not mean that they are above the law, and therefore should be accountable for their actions
REFERENCES
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- Anonymous, 2006 “World Economic and Social Survey” New York, USA. Retrieved 05/06/08 BBC, 2008, BBC, London UK, Retrieved 04/05/2008 Bird, F., 2005 “Wealth and Poverty in the Niger Delta: Reflections on the history of Shell’s operations in Nigeria”, Concordia University USA
- Canagarajah, S. and Thomas, S., 2001 “Poverty in a Wealthy Economy: the Case of Nigeria”, Journal of African Economies, Vol. 10, No. 2, pp.143-173
- Central Washington University, 1999, Central Washington University USA, Retrieved 19/04/2008
- Chenery, H. Ahluwalia, M. Bell, C. Duloy, J.H. and Jolly, R., 1976 Redistribution with Growth, Oxford University Press, p.3
