The concept is short is known as LPG. In this article, we are discussing the concept, characteristics, and implications of all these three. Besides, the characteristics of Globalization, Liberalization, and Privatization are most important in these entire topics.
It means to link the economy of a country with the global market or economy. Most noteworthy, the main aim of this is to focus on foreign trade and investment. In other words, in globalization, we remove the barriers to international trade to facilitate foreign investment and trade in the country.
Concept of Globalization
In globalization, the entire world economy acts as a single unit. In other words, in globalization the entire world trade with each other with mutual cooperation. Also, it notices the growth and output of world trade. The measuring of globalization is not an easy task. Besides, it helps developing countries in their growth and development.
Characteristics of Globalization
The characteristics of globalization include several features that not only help countries in trade. But, also facilitate many other things. In addition, these features help in the globalization of economic activities, facilitate free trade between countries, connect the local and international, market and many more.
Implementation of globalization
Globalization makes possible The Foreign Direct Income (FDI). Moreover, this direct income grows more rapidly than world trade. Most noteworthy, this help in boosting the technology, industrial restructuring, and growth of companies.
It refers to the end of that restriction which is a barrier that stops or slows the growth of a nation. Also, it loosens the government control over the private sector companies. So, private companies can work with fewer restrictions. In addition, they get the chance for growth and expansion.
Concept of Liberalization
The concept of liberalization is introduced in the early 1990s in India. At that time powerful changes happen in Indian economic structure. In addition, most of the international companies that work in India are from that time. With the start of liberalization, many companies face serious competition for the first time. Also, companies that monopolize the market at that time start getting competition.
Characteristics of Liberalization
The characteristics of liberalization contain some strong benefits that help in the growth of companies. Firstly, it encourages economic growth of private sector companies. Also, it simplifies the regulation, policy, and tax structure. Liberalization facilitates Foreign Direct Investment, which also forces public sector companies to restructure themselves for efficiency. In addition, it provides motivation for export and allows more imports of capital goods and technology. Besides, it moves away from the protection of small scale industries.
Implementation of Liberalization
Removing barriers of trade reduces the rate of goods purchased. Also, it removes barriers and quotas between countries. It benefits the stronger economies. Besides, the implementation of liberalization can cost jobs.
It means the increase of the controlling role of private sector companies and lessens the role of public sector companies. In other words, privatization is the reduction of government-owned companies’ ownership of management. Also, it converts government companies into private companies.
Concept of Privatization
The concept of privatization divides into four parts namely delegation, divestment, displacement, and disinvestment. Delegation means giving the companies on lease or grant. Divestment means selling the majority of the stake to one or many private companies. Displacement means to displace the public company in the market. And finally, disinvestment means selling a portion or whole public company to private companies.
Characteristics of Privatization
Privatization improves efficiency because private companies have a profit motive to cut cost and be more resourceful. Also, there is less political interference, they fight the competition, they set short term goals, and there are shareholders in the companies.
Implications of Privatization
It sees the growth of companies also the employees take their work seriously. In addition, they help in the development of the economy.