Write any five meritt or demeritt of liberlisation , privetlisation and globalisation
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These are the advantages /merits:-
Liberalisation
Increase foreign investment
Increase foreign exchange reserve
Increase in consumption
Reduction in dependence on external commercial borrowing.
Privatisation
Increase in efficiency
Professional management
Increase in competition
In line with international trends
Reduction in economic burden of government
Increase in industrial growth
Increase in foreign investment
Encourage to new innovation.
Globalization
Increase in the foreign investment
Foreign trade policy
Export promotion
Freedom to repatriate.
So now the overall summary of the LPG Reform…
L = Removing the restrictions for better economic development.
P= Control shift to private sector for better services.
G= Allowing foreign trade & investment.
These are the disadvantages/demerits :-
Disadvantages of globalisation:
Despite implementing liberalisation measures, Least Developed Countries, saw a fall in their share of the world markets. Trapped in a vicious cycle of poverty, debt ridden economy, illiteracy, civil strife and dependence on a single commodity, they experienced a continuing decline in the price of primary products.
Opportunities existed for an increased access to international financial markets. However, short term speculative funds within the financial system with a quest for short term gains gained prominence. As such there was very little contribution to an increase in productive investments.
Increased global financial flows provided a more influential role to certain agencies. Rating agencies determined whether countries have access to overseas funds. Assessments by stock analysts influenced the flow of funds into the stock markets. Decisions of hedge fund managers impacted the value of national currencies.
Information failures led foreign investors to finance unsound investments resulting in mis allocation of resources.
4. Local firms, unable to compete with high technology foreign firms were crowded out. Small and medium enterprises could not compete due to their limited capacity. Cheap imports affected producers of importables.
5. Increased share of self employment indicated an increase in the size of the informal economy. Stagnation and slow growth of employment in the modern sector brought about greater labour absorption into the informal economy.
6.The poor, illiterate, unskilled and assetless people lost out due to globalisation. Indigenous people are the most vulnerable sections of society. Integration into the global economy occurred without their consent. Their rights , livelihood and culture were not adequately protected. Massive dislocation and disruption of their livelihood took place due to investments in extractive industries and mega hydro electric dams.
Increased capital mobility and loss of employment opportunities weakened the bargaining power of workers. Moreover there was constant pressure to relax labour protection laws.
7. Higher levels of concentration of wealth implying increased market and political power at national and global levels. The beneficiaries happen to be MNCs, and those associated with these institutions.
8.Globalisation also affects public finance. The average rate of tax is reduced due to the tax incentives given to attract FDI. There is greater dependence on indirect taxes making the tax system less progressive.
Reduced taxes limits the fiscal capacity of the State. There would be less government expenditure on health, education, social security and poverty reduction programs. In a globalised world education, skill and knowledge are the key skills needed for economic survival.
❤❤❤❤thank you! ❤❤❤❤
Liberalisation
Increase foreign investment
Increase foreign exchange reserve
Increase in consumption
Reduction in dependence on external commercial borrowing.
Privatisation
Increase in efficiency
Professional management
Increase in competition
In line with international trends
Reduction in economic burden of government
Increase in industrial growth
Increase in foreign investment
Encourage to new innovation.
Globalization
Increase in the foreign investment
Foreign trade policy
Export promotion
Freedom to repatriate.
So now the overall summary of the LPG Reform…
L = Removing the restrictions for better economic development.
P= Control shift to private sector for better services.
G= Allowing foreign trade & investment.
These are the disadvantages/demerits :-
Disadvantages of globalisation:
Despite implementing liberalisation measures, Least Developed Countries, saw a fall in their share of the world markets. Trapped in a vicious cycle of poverty, debt ridden economy, illiteracy, civil strife and dependence on a single commodity, they experienced a continuing decline in the price of primary products.
Opportunities existed for an increased access to international financial markets. However, short term speculative funds within the financial system with a quest for short term gains gained prominence. As such there was very little contribution to an increase in productive investments.
Increased global financial flows provided a more influential role to certain agencies. Rating agencies determined whether countries have access to overseas funds. Assessments by stock analysts influenced the flow of funds into the stock markets. Decisions of hedge fund managers impacted the value of national currencies.
Information failures led foreign investors to finance unsound investments resulting in mis allocation of resources.
4. Local firms, unable to compete with high technology foreign firms were crowded out. Small and medium enterprises could not compete due to their limited capacity. Cheap imports affected producers of importables.
5. Increased share of self employment indicated an increase in the size of the informal economy. Stagnation and slow growth of employment in the modern sector brought about greater labour absorption into the informal economy.
6.The poor, illiterate, unskilled and assetless people lost out due to globalisation. Indigenous people are the most vulnerable sections of society. Integration into the global economy occurred without their consent. Their rights , livelihood and culture were not adequately protected. Massive dislocation and disruption of their livelihood took place due to investments in extractive industries and mega hydro electric dams.
Increased capital mobility and loss of employment opportunities weakened the bargaining power of workers. Moreover there was constant pressure to relax labour protection laws.
7. Higher levels of concentration of wealth implying increased market and political power at national and global levels. The beneficiaries happen to be MNCs, and those associated with these institutions.
8.Globalisation also affects public finance. The average rate of tax is reduced due to the tax incentives given to attract FDI. There is greater dependence on indirect taxes making the tax system less progressive.
Reduced taxes limits the fiscal capacity of the State. There would be less government expenditure on health, education, social security and poverty reduction programs. In a globalised world education, skill and knowledge are the key skills needed for economic survival.
❤❤❤❤thank you! ❤❤❤❤
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