Liberalization

Liberalization refers to a relaxation of previous government restrictions, usually in areas of social or

economic policy. In some contexts this process or concept is often, but not always, referred to
as deregulation. Liberalization of autocratic regimes may precede democratization.
Most often, the term is used to refer to economic liberalization, especially trade liberalization or capital
market liberalization. Although economic liberalization is often associated with privatization, the two
can be quite separate processes. For example, the European Union has
liberalized gas and electricity markets, instituting a system of competition; but some of the leading
energy companies remain partially or completely in government ownership.
Liberalized and privatized public services may be dominated by just a few big companies particularly in
sectors with high capital costs, or high such as water, gas and electricity. In some cases they may remain
legal monopoly at least for some part of the market (e.g. small consumers).
Liberalization is one of three focal points (the others being privatization and stabilization) of
the Washington Consensus's trinity strategy for economies in transition. An example of Liberalization is
the "Washington Consensus" which was a set of policies created and used by Argentina.
Economic liberalization is a very broad term that usually refers to fewer government regulations and
restrictions in the economy in exchange for greater participation of private entities; the doctrine is
associated with classical liberalism. The arguments for economic liberalization include greater efficiency
and effectiveness that would translate to a "bigger pie" for everybody. Thus, liberalisation in short refers
to "the removal of controls", to encourage economic development. In developing countries, economic
liberalization refers more to liberalization or further "opening up" of their respective economies to
foreign capital and investments. Three of the fastest growing developing economies today India has
achieved rapid economic growth in the past several years or decades after they have "liberalized" their
economies to foreign capital.
Privatization
Privatization is the incidence or process of transferring ownership of a business, enterprise, agency,
public service or property from the public sector (the state or government) to the private
sector (businesses that operate for a private profit) or to private non-profit organizations. The term is
also used in a quite different sense, to mean government out-sourcing of services to private firms, e.g.
functions like revenue collection, law enforcement, and prison management.
The term "privatization" also has been used to describe two unrelated transactions. The first is a buyout,
by the majority owner, of all shares of a public corporation or holding company's stock, privatizing a
publicly traded stock, and often described as private equity. The second is a demutualization of a mutual
organization or cooperative to form a joint stock company.
Privatisation generally is believed to improve the output, profits and efficiency of the organisations that
are privatised. The repurchasing of all of a company's outstanding stock by employees or
a private investor. As a result of such an initiative, the company stops being publicly traded. Sometimes,
the company might have to take on
significant debt to finance the change in ownership structure. Companies might want to go
private in order to restructure their businesses (when they feel that the process
might affect their stock prices poorly in the short run). They might also want to go private
to avoid the expense and regulations associated with remaining listed on a stock exchange. also
called going private. opposite of going public. The process of moving from a government
controlled system to a privately run, for-profit system.

Globalization
Globalization refers to the increasingly global relationships of culture, people and economic activity.
Most often, it refers to economics: the global distribution of the production of goods and services,
through reduction of barriers to international trade such as tariffs, export fees, and import quotas.
Globalization contributes to economic growth in developed and developing countries through increased
specialization and the principle of comparative advantage. The term can also refer to the transnational
circulation of ideas, languages, and popular culture.
Critics of globalization allege that globalization's benefits have been overstated and its costs
underestimated. Among other points, they argued that it decreased inter-cultural contact while
increasing the possibility of international and intra-national conflict. However, the assertions of critics of
globalization contradict the research in mainstream international trade theory, that, after controlling for
relevant factors, globalization reduces conflict between trading nations. Progressive economist Paul
Krugman, who won the Nobel Prize in economics in 2008 for his work done in international trade theory,
is a staunch supporter of globalization and free trade and has a record of disagreement, going back to
the 1990s, with mainstream progressives, who he thinks lack even basic understanding of
what comparative advantage is.
Globalization is the process of increasing the connectivity and interdependence of
the world's markets and businesses. This process has speeded up dramatically in the last two decades as
technological advances make it easier for people to travel, communicate, and
do business internationally. Two major recent driving forces are advances in
telecommunications infrastructure and the rise of the internet. In general, as economies become more
connected to other economies, they have increased opportunity but also increased competition. Thus,
as globalization becomes a more and more common feature of world economics, powerful pro-
globalization and anti-globalization lobbies have arisen.
The pro-globalization lobby argues that globalization brings about much increased opportunities for
almost everyone, and increased competition is a good thing since it makes agents of production
more efficient. The two most prominent pro-globalization organizations are the World Trade
Organization and the World Economic Forum. The World Trade Organization is a pan-
governmental entity (which currently has 144 members) that was set up to formulate a set of rules to
govern global trade and capital flows through the process of member consensus, and to supervise their
member countries to ensure that the rules are being followed. The World Economic Forum,
a private foundation, does not have decision-making power but enjoys a great deal of importance since
it has been effective as a powerful networking forum for many of the world's business, government and
not-profit leaders.
The anti-globalization group argues that certain groups of people who are deprived
in terms of resources are not currently capable of functioning within the increased competitive pressure
that will be brought about by allowing their economies to be more connected to the rest of the world.
Important anti-globalization organizations include environmental groups like Friends of the Earth and
Greenpeace; international aid organizations like Oxfam; third world government organizations like the
G-77; business organizations and trade unions whose competitiveness is threatened by globalization like
the U.S. textiles and European farm lobby, as well as the Australian and U.S. trade union movements.