Liberalization, Privatization & Globalization This document defines key terms like liberalization, privatization, disinvestment and globalization. It discusses how decentralization, privatizing state-owned businesses, and increasing international integration have contributed to globalization. Major organizations that facilitate globalization are identified as the IMF, World Bank and WTO, which aim to reduce trade barriers and establish rules for the global economy.

1. Liberalization, Privatization &
Globalization
Dr. L. Mothilal,
Assistant Professor,
Department of Management Studies
Pondicherry Central University, India
Email: mothilal2020@gmail.com
https://www.linkedin.com/in/dr-mothilal-lakavath-7469b34/
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2. Liberalization
Decentralization is the process of
dispersing decision-making governance
closer to the people and/or citizens.
It includes the dispersal of
administration or governance

3. Privatization
The transfer of ownership,
property or business from
the government to the
private sector is
termed privatization

4. Disinvestment
Meaning: Disposal of PUSs equity in market (selling
of Public sector to Private sector Entrepreneur)
In India it has been moving slowly
It is being carried out hastily & unplanned manner.
Result – Poor

5. Globalization

6. Definition of Globalization
“Globalization refers to the free movement of
goods, capital, services, people, technology
and information”.
It is the action or procedure of international
integration of countries arising from the
convergence of world views, products, ideas,
and other aspects of culture

7. Globalization
What is globalization?
Is only trade & commerce
Webster’s dictionary – “Making worldwide in
scope and application”
When did globalization start?
Initially globalization of human beings took
place

8. Globalization
Integrating the domestic economy with the rest of
the world economy.
It is a process where, countries insulated in the past
come & join the new world economic order
It involves increasing interaction among national economic
system, more integrated financial markets, economies of
trade, higher factor mobility, free flow of technology, goods,
knowledge & services throughout the World

9. Globalization
Major contributors to the globalizers:
• Traders
• Preachers
• Adventurers
• Warriors
All the above were in place in 6000 B.C.
Slowly empires & new settlements were formed
Arkikamedu in Tamilnadu was major trading centre for
Romans from 1st century after Christ.

10. Globalization
Malabar coast was the trading centre for
Arabs, Persians, Armenians & Jews.
Global trade momentum took place after 1300
A.D with improvements in ship design &
techniques. Introduction of steamship in 1780
gave major boost to trade.
Until industrial revolution, Indian made textiles
remained the biggest major manufacturing
export in the world.

11. Globalization
India’s GDP was 25% of world GDP in 1700.
Portuguese trader, Tom Pires wrote that Malacca in 1512
represented 61 nations with 84 languages spoken at port.
The spread of major religions like Buddhism, Christianity,
& Islam gave another push to Globalization.

12. Globalization
The religions were most appealing to
traders, who spread ideas, cultures,
foods & languages far & wide.
Religions also helped the growth of
languages & trade.

13. Globalization
Modern globalizers apart from businesses:
NGOs like Amnesty International
Human Rights Watch – by creating global
consciousness of human suffering across nations
The ambition to control the whole world & greed have been
giving birth to so many empires throughout the history. (e.g.
Sole super power, US has 700 military installations world over)

14. Globalization
• Now most of the things we use today from pens,
jeans, shirts, cars, etc. have some parts designed
in other country. Therefore, we are all agents of
globalization.
New group of Globalizers:
• Students
• Patients Adding speed to Globalization
• Doctors

15. Globalization
Difference between the globalization in the past and
modern time:
Velocity with which ideas & products are transferred.
Ever growing volume of consumers, products & their
ideas, their variety & the resultant increase in the
visibility of process

16. Measures towards Globalization
Convertibility of Rupee – Current Account
Transactions (Limited to Capital Account)
Import & Export Liberalization
Opening of Indian Economy for Foreign
Investment

17. Main Organizations facilitating
Globalization
International Monetary Fund (IMF)
World Bank
World Trade Organization

18. International Monetary Fund (IMF)
Established in 1946, but commenced
operations from 1947
Main Objective: Elimination or Reduction
of Exchange Controls
Establishment & maintenance of currency
convertibility with stable exchange rate

19. IMF
Extension of multilateral trade & payments
Solving short-term Balance of Payment (BOP)
problems by its member countries
It functions as a short-term credit institution
It is a reservoir of all currencies of member countries
where members can borrow
It is machinery for international consultations

20. IMF
It monitors economic and
financial development of
its member countries &
advises on policies aimed
at prevention of crises

21. World Bank
International Bank for Reconstruction & Development (IBRD)
was set up in 1945
Objective: To give loans to its member countries, initially for
the war-ravaged economies & later for poor economies.
Investing in people – education & health
Focusing on Social Development
Attention to Environment

22. World Bank
Supporting & encouraging private investment &
development
Promoting reforms to create a stable macro-
economic environment, conducive to investment &
long-term planning
Assist member countries in promoting &
development
It encourages private foreign investment & credit by
guaranteeing repayments

23. World Bank
Promote long-term balanced
growth of international trade
& maintenance of
equilibrium in BOP of its
member countries

24. WTO came into existence on 1st January 1995
It is a powerful body aims at making the whole World into a
village where there is a free flow of goods & services with no
barriers to trade
It’s a main Organ to implement multilateral trade agreement
Global in its membership-(164 members)
World Trade Organization (WTO)

25. WTO
It’s a forum for negotiations among member
countries
Full-fledged International Organization & legal
person
Decision making by consensus
It facilitates the implementation world trade
agreements

26. WTO
It will handle trade disputes
It monitors national trade policies
It provides technical assistance &
training to member countries