GLOBALIZATION, EMPLOYMENT AND POVERTY IN GHANA Ernest Aryeetey1

1.

INTRODUCTION

One of the most significant influences on the performance of the economy of Ghana in the last two decades has been derived from the greater interaction between it and other economies. Thus, following economic reforms that focused considerably on opening the economy to greater and freer external trade, globalization has been a major aspect of the economy and society. But this influence has been observed not only in the area of external trade; it is seen also in terms of capital flows, aid, technology transfer, international migration, etc. All of these have seen significant expansion in the period of reforms, even if this has been on a scale far smaller than in South East Asia and the other faster growing developing economies.

Globalization has definitely created opportunities for various parts of the economy to gain access to larger pools of resources as well as markets. While this may generally be perceived to have impacted positively on the beneficiaries, there are also indications that globalization has introduced new risks to environments that were hitherto closed to those risks. The increased risk may, in some cases, have accentuated poverty and worsened income distribution in parts of the country.

While poverty has always been generally closely associated with the condition of African states, its link with globalization is a more recent development, and is much less understood. The relationship between globalization and poverty is obscured by the fact that for long poverty was more generally associated with rural economies and societies than urban ones, while globalization was expected to reflect the transactions of the more urban sections of African societies. But there are indications that urban poverty is growing and the links between rural and urban economies are