Relationship between globalization and liberalisation or liberalization

relationship between globalization and liberalisation or liberalization

the ambiguous and contradictory impacts of globalisation on women remain under Examining the relationships between market liberalisation, women's .. Its impact on the politics of Economic Liberalization' India Review, 3(4): It is important to clarify the terms globalisation and trade liberalisation before Moreover, there is a deterioration in the ratio of total food imports to total. deregulation and external liberalisation. The paper of these changes by emphasising in particular the linkages between liberalisation, globalisation and.

The economic policies of the British Prime Minister, Margaret Thatcher in England and President Ronald Regan in the United States of America represented what came to be known as rolling back the state and giving larger role to market.

Globalization and liberalization: the impact on developing countries

In a way this indicated the dwindling popularity of Keynesian welfare state or what is also called the state administered socialism. The decline and disintegration of the former Soviet Union and the adoption of the capitalist path of development by its successor countries and the erstwhile communist countries of eastern Europe rendered the ideological props for pervasiveness of state control ineffective.

This created a favourable climate for economic reforms worldwide. There has been a tremendous movement of students and job seeks to other countries, following the inflementation of the New Economic Policy.

globalization and liberalization | suyash gupta -

This has also led to a greater interaction and communication with foreign countries to the changes in the attitude about economic reforms. Similarly, closer home, the Communist China had started the policy of economic reforms around a decade earlier than India.

The Chinese economy had made noticeable progress after pursuing the policy of economic reforms. In this way it is quite obvious that many national and international developments contributed in diluting the inhibitions against reforms and building a consensus in its favour. The package of reforms that ensued in involved the devaluation of the rupee by twenty per cent.

This was aimed at linking the rupee realistically to the market. Provisions for freer access to imports were made. The license control system was dismantled with the abolition of the Monopolistic and Restrictive Trade Practices which were taking place in 2 public sectors as well with a shift towards gradual privatisation.

These reforms also included the reforms in the capital market and the financial sector. The attitude on multinational companies and foreign investment witnessed a complete turn around. Restrictions gave way to reception. The Gross Domestic Product that had fallen to a paltry 0. During the Eighth Five year Plan period, the economy recorded the growth rate of around seven per cent. This rate of growth was pretty close to that of high performance economies of East Asia.

This remarkable feat was achieved in spite of the pangs of crisis and structural adjustment. Other economic indices like Gross Domestic Saving had also witnessed an upward swing. The growth rate of Industrial production registered an increase from a meager 1 per cent in to 6 per cent in It further zoomed to The capital goods sector which showed a negative growth in the beginning registered a 25 per cent growth in This put to rest the fear that liberalising imports would hit domestic capital goods industry.

Exports that had registered a decline of 1. Betweenit registered a growth rate of around 20 per cent. It was in tune with the objective of self- reliant growth. A considerably larger proportion of imports were now paid for by exports. The ratio of export earnings to import payments raised from an average of 60 per cent in the eighties to nearly 90 per cent by the mid s. The foreign exchange reserves in which were barely enough to pay for the imports of two weeks had now become enough to pay for the imports of seven months by the end of January The debt situation which had reached a crisis point started showing signs of improvement.

The debt service ratio which had touched 35 per cent in came down to It was still higher than the debt service ratio of countries like China, Malaysia and South Korea, which was below 10 per cent around this period.

The opening up of the economy encouraged foreign investment to a great deal. Between tothe foreign direct investment grew at the rate of per cent per year. It was a commendable achievement but on this score, the country still lagged behind the East Asian countries. An important development was the gradual erosion of hostility against foreign capital.

After theelection a coalition government came to power with a left party as its constituent. The National Democratic Alliance government, also followed a pro-foreign investments policy.

Even the present United Progressive Alliance government, in spite of its dependence on the support of the left parties, is encouraging foreign investment. This slowing down of the economy is partly seen as an impact of the recession in Japan, South Korea, Indonesia, Thailand and other nations.

Around this time these economies were recording negative growth and even the world trade had slowed down in It was also blamed that India could not address itself to structural process inhibiting growth. Poor infrastructure [power, transport], archaic labour laws and continuing trade restrictions were to blame for the Indian economy not recording a higher growth rate.

Parnab Bardhan is of the opinion that in general, there has not been much political backlash against the policy of reforms. Many state level leaders supported liberalisation because it has been associated with a more open door policy for foreign investment providing a way out of fiscal bankruptcy to states. As a group, large business houses have not been losers; if they have lost due to increased competition in some areas they have also gained in some other areas, as restrictions to entry in certain areas have been eased.

There has not been much of resistance from the rich farmers. As per the conditions of the GATT, the developing countries including India are under an obligation to introduce subsidies where they were asked to keep subsidies to the farmers up to 10 per cent of their value output.

India, with other countries of the Third World, has accused the WTO of following discriminatory practices. The developed countries continue to give subsidies while they pressurise the developing countries to cut subsidies. As is obvious, cutting subsidies would hurt the interests of the farmers. On the one hand, the leader of the rich farmers Movement in the western part of the country, Sharad Joshi has supported the new developments, Mahendra Singh Tikait in the north and Nanjundaswamy in the south, on the other hand, have been critical of it.

These farmers are diversifying their investment from agriculture to agriculture -- based industries like sugar, rice mills, food processing etc.

The climate provided by the economic reforms seems to be serving their purpose. Some of the new entrepreneurs belong to the families of bureaucrats, army officers and other members of the professional classes. It is obvious that a new link has been forged between bureaucracy and capital. Jetkins is of the view that there has been a great deal of piecemeal reforms through a political process of diffusing resistance on the part of vested interests in many ways without causing massive political confrontations.

It is argued that these reforms have an inbuilt bias in favour of the upper and middle classes and hurt the interests of the underprivileged in material sense.

It is argued that these reforms would further aggravate economic inequality, and this is in conflict with the constitutional goal of creating a just society. Economic equality is an essential component of this conception of a just society.

One of the basic objectives of the policy makers since inception of planning has been to achieve growth with justice.

relationship between globalization and liberalisation or liberalization

The supporters of the reformist agenda refuse to accept the view that economic reforms would aggravate economic inequality. On the contrary they argue that a rapid economic growth, in fact, is associated with a fall in poverty levels.

Privatisation of the public sector has faced resistance from organised labour. Workers have been pushed out under what has come to be known as voluntary retirement scheme. Contract and casual labour have started substituting regular employees. A number of unviable units have been closed through various subterfuges. Under the policy of privatisation several important public sector units in the country have been sold to the private companies.

The Impact of Globalization and Trade Liberalization on Food Security, by Hartwig de Haen

This has opened new challenges for the workers movement. The developments since in the Indian Economy have created fundamental problems for the working class. The unions are finding it difficult to resist the encroachment of capital on the rights of the workers. Some critics have also started arguing that the economic reforms have led to a period of jobless growth. Globalisation and liberalisation are creating job opportunities for the highly trained manpower like the graduates from IITs and Indian Institute of Management; similarly the call centres give jobs to those having a good command over English.

People coming from upper middle class and urban background have a clear advantage in getting such jobs with astronomical salary. The policy of reservation in government jobs has been based on the idea of social justice, because without reservation, candidates from disadvantaged background were unable to get jobs.

The MNCs and the private companies do not partycularly follow any principle of reservation. Therefore, some see the policy of reforms as a ploy to deny them the advantage of reservation. The demand for reservation in private sector has also been gaining ground.

relationship between globalization and liberalisation or liberalization

The standard of public education that is available to the weaker section is falling. At the same time the private education is becoming more and more expensive and out of reach for people belonging to the disadvantaged sections of the society.

Liberalisation has marginalised a large section of the population, as they do not have the skills or education to take advantage of the growth. So we need to invest in them substantially so that the marginalised section becomes partners in the liberalisation process.

relationship between globalization and liberalisation or liberalization

The retreat of the state and neo-classical liberal economic ideology of the market led growth has increased economic inequalities and regional disparities. This has in turn led to the emergence of new tension areas between the centre and the states. This has also led to erosion in the power of the central government to promote balanced regional development.

Some experts view growth as favourable to the urban India, organised sector, richer states and property owners. Some economists are of the view that policies like trade liberalisation gives multinational corporations an opportunity to capture the Third World market at the expense of the local producers.

Opening up opportunities for foreign investment in the third world countries offers to the MNCs an opportunity to earn huge profit. Likewise the sale of public sector assets to these companies gives MNCs an opportunity to build their business empires in the Third World at a cheaper price.

There has been a plethora of accusations against the privatisation deals of the NDA government that they have sold public assets at throwaway prices. The United Progressive Alliance government that came to power in pledged itself to carry on with the policy of reforms decided to give reforms with a human face.

The Common Minimum Programme of the UPA gave the needed emphasis on the needs of farmers and poor people because the reforms so far are said to have a bias in favour of urban and the rich sections of the Indian society.

The new government has done away with Disinvestments Ministry and has decided not to privatise profit making public sectors. There has been a growing perception that reforms have not benefitted the agricultural sector. The new government is focusing on agriculture to 5 correct this imbalance; the first budget of the UPA government has doubled agricultural credit and has pledged to promote agro-business and launch pilot projects to augment water bodies.

An emphasis on higher growth rate in agriculture can sustain higher growth rate in industry. Another serious criticism of the reform policy has been that it has aggravated regional imbalance. The special package for Bihar in the Union Budget can be seen as an attempt to address to this issue. The Common Minimum Programme of the UPA government declares that Foreign Direct Investment will continue to be encouraged and actively sought particularly in the areas of infrastructure, high technology and exports.

At the same time going ahead with the policy of reform, the Finance Minister has raised Foreign Direct Investment limit in telecommunication, insurance and civil aviation sectors. Sectoral caps in telecom have been hiked from 49 per cent, to74 per cent, in civil aviation from 40 to 49 per cent and in insurance from 26 to 49 per cent.

relationship between globalization and liberalisation or liberalization

Many of such vulnerable countries are developing countries, especially the poorest amongst them, for whom agriculture is still the backbone of their economies. The agricultural sector and the related rural sectors also provide the source of livelihood for percent of these countries' poor. Thus, any impact of globalisation and trade liberalization on the agricultural sector of these countries will have far reaching implications for the livelihoods of their populations. Agriculture of developing countries is also essential to world agricultural trade, however, with enormous differences: The agricultural trade balance shows a widening deficit, which reflects a growing food import dependence.

Moreover, there is a deterioration in the ratio of total food imports to total agricultural export, i. The ability to finance these growing imports depends on a number of factors, the most important in many cases being the export earnings and external resource inflows.

In most of these countries, export earnings have stagnated over the last two decades, mainly because of the fall in commodity prices. The foreign debt burden has also limited the ability of many LDCs to import.

Countries with particular tight foreign exchange situations include those such as Haiti or Rwanda. Obviously, being economies with little other resources than agriculture, these countries need to concentrate on making their agriculture more competitive, and this in two directions: However, my subsequent remarks will focus more on the Agreement on Agriculture AoA. The AoA provides for commitments to reduce domestic support, and export subsidies, and increase market access.

The SPS and TBT allow trade barriers under well defined conditions, in particular science based standards to protect human, plant and animal health, and adherence to technical norms and labelling requirements TRIPS expects all WTO member countries to have systems in place which protect the property rights of investors. It explicitly calls for property rights for plant varieties, including so-called sui-generis systems. Despite progress achieved in the implementation of these agreements, the international trading system remains unbalanced.

Moreover the complexity of import regimes and of accessing tariff rate quotas as well as the costs of complying with standards continue to create obstacles The WTO negotiations for continuing the reform process were launched in February and are now well-advanced. Developing countries are actively involved in the negotiations and FAO assists them through information, training and special analyses.

The founders of the WTO, in Marrakech, recognised this need and devised special and differential treatment and special asistance to those countries expected to be negatively affected NFIDCs and LDCs, due to higher import prices Unfortunately, this assistance has mostly not been implemented Winners and losers are affected via various mechanisms.

The underlying facors include whether or not countries have effective infrastructure and technologies, market-friendly legislation etc.