Globalization 

(or globalisation) describes a process by which regional economies, societies, and cultures have
become integrated through a global network of communication, transportation, and trade. The term is sometimes
used to refer specifically to economic globalization: the integration of national economies into the international
economy through trade, foreign direct investment, capital flows, migration, and the spread of technology.
[1]
 However, globalization is usually recognized as being driven by a combination of economic, technological,
sociocultural, political, and biological factors.[2] The term can also refer to the transnational circulation of ideas,
languages, or popular culture through acculturation.

Contents
 [hide]

1 Definitions

2 History

3 Post-World War II

4 Measurement

5 Effects

o 5.1 Cultural effects

o 5.2 Negative effects

 5.2.1 Sweatshops

 5.2.2 Negative effects of economic

liberalization

 5.2.3 Brain drain

 5.2.4 Environmental degradation

 5.2.5 Food security

 5.2.6 Disease

 5.2.7 Drug and illicit goods trade

6 Advocates

7 Critics

o 7.1 International social fora

8 Relation to Americanization

9 See also

10 References

11 Further reading

12 External links

o 12.1 Multimedia
[edit]Definitions

The United Nations Building

According to the Oxford English Dictionary, the word 'globalization' was first employed in 1930, to denote a holistic
view of human experience in education.[3] An early description of globalization was penned by the American
entrepreneur-turned-minister Charles Taze Russell who coined the term 'corporate giants' in 1897,[4] although it was
not until the 1960s that the term began to be widely used by economists and other social scientists. The term has
since then achieved widespread use in the mainstream press by the later half of the 1980s. Since its inception, the
concept of globalization has inspired numerous competing definitions and interpretations, with antecedents dating
back to the great movements of trade and empire across Asia and the Indian Ocean from the 15th century onwards.[5]

The United Nations ESCWA has written that globalization "is a widely-used term that can be defined in a number of
different ways. When used in an economic context, it refers to the reduction and removal of barriers between
national borders in order to facilitate the flow of goods, capital, services and labor... although considerable barriers
remain to the flow of labor... Globalization is not a new phenomenon. It began in the late nineteenth century, but it
slowed down during the period from the start of the First World War until the third quarter of the twentieth century.
This slowdown can be attributed to the inward-looking policies pursued by a number of countries in order to protect
their respective industries... however, the pace of globalization picked up rapidly during the fourth quarter of the
twentieth century..."[6]

Saskia Sassen writes that "a good part of globalization consists of an enormous variety of micro-processes that begin
to denationalize what had been constructed as national — whether policies, capital, political subjectivity, urban
spaces, temporal frames, or any other of a variety of dynamics and domains."[7]
HSBC, the world's largest bank, operates across the globe.[8][9] Shown here is the HSBC Global Technology Centre in Pune, India which
develops software for the entire HSBC group.[10]

Tom J. Palmer of the Cato Institute defines globalization as "the diminution or elimination of state-enforced

restrictions on exchanges across borders and the increasingly integrated and complex global system of production
and exchange that has emerged as a result."[11]

Thomas L. Friedman has examined the impact of the "flattening" of the world, and argues that globalized
trade, outsourcing,supply-chaining, and political forces have changed the world permanently, for both better and
worse. He also argues that the pace of globalization is quickening and will continue to have a growing impact on
business organization and practice.[12]

Noam Chomsky argues that the word globalization is also used, in a doctrinal sense, to describe the neoliberal form
of economic globalization.[13]

Herman E. Daly argues that sometimes the terms internationalization and globalization are used interchangeably but
there is a significant formal difference. The term "internationalization" (or internationalisation) refers to the
importance of international trade, relations, treaties etc. owing to the (hypothetical) immobility of labor and capital
between or among nations.[citation needed]

Finally, Takis Fotopoulos argues that globalization is the result of systemic trends manifesting the market economy's
grow-or-die dynamic, following the rapid expansion of transnational corporations. Because these trends have not
been offset effectively by counter-tendencies that could have emanated from trade-union action and other forms of
political activity, the outcome has been globalisation. This is a multi-faceted and irreversible phenomenon within the
system of the market economy and it is expressed as: economic globalisation, namely, the opening and deregulation
of commodity, capital and labour markets which led to the present form of neoliberal globalisation; political
globalisation, i.e., the emergence of a transnational elite and the phasing out of the all powerful-nation state of the
statist period; cultural globalisation, i.e., the worldwide homogenisation of culture; ideological globalisation;
technological globalisation; social globalisation.[14]

[edit]History
Extent of the Silk Road and Spice traderoutes blocked by the Ottoman Empire in 1453 spurring exploration

The historical origins of globalization are the subject of on-going debate. Though some scholars situate the origins
of globalization in the modern era, others regard it as a phenomenon with a long history.

Perhaps the most extreme proponent of a deep historical origin for globalization was Andre Gunder Frank, an
economist associated with dependency theory. Frank argued that a form of globalization has been in existence since
the rise of trade links between Sumer and the Indus Valley Civilization in the third millennium B.C.[15] Critics of this
idea point out that it rests upon an over-broad definition of globalization.

An early form of globalized economics and culture existed during the Hellenistic Age, when commercialized urban
centers were focused around the axis of Greek culture over a wide range that stretched from India to Spain, with
such cities as Alexandria, Athens, and Antioch at its center. Trade was widespread during that period, and it is the
first time the idea of a cosmopolitan culture (from Greek "Cosmopolis", meaning "world city") emerged. Others
have perceived an early form of globalization in the trade links between the Roman Empire, the Parthian Empire,
and the Han Dynasty. The increasing articulation of commercial links between these powers inspired the
development of the Silk Road, which started in western China, reached the boundaries of the Parthian empire, and
continued onwards towards Rome.[16] With 300 Greek ships a year sailing between the Greco-Roman
world and India, the annual trade may have reached 300,000 tons.[17]

The Islamic Golden Age was also an important early stage of globalization, when Jewish and Muslim

traders and explorers established a sustained economy across the Old World resulting in a globalization of crops,
trade, knowledge and technology. Globally significant crops such as sugar and cotton became widely cultivated
across the Muslim world in this period, while the necessity of learning Arabic and completing the Hajj created a
cosmopolitan culture.[18]
Portuguese carrack in Nagasaki, 17th century Japanese Nanban art

Native New World crops exchanged globally: Maize, Tomato, Potato, Vanilla,Rubber, Cacao, Tobacco

The advent of the Mongol Empire, though destabilizing to the commercial centers of the Middle East and China,
greatly facilitated travel along the Silk Road. This permitted travelers and missionaries such as Marco Polo to
journey successfully (and profitably) from one end of Eurasia to the other. The so-called Pax Mongolica of the
thirteenth century had several other notable globalizing effects. It witnessed the creation of the first
international postal service, as well as the rapid transmission of epidemic diseases such as bubonic plague across the
newly unified regions of Central Asia.[19] These pre-modern phases of global or hemispheric exchange are
sometimes known as archaic globalization. Up to the sixteenth century, however, even the largest systems of
international exchange were limited to the Old World.

The Age of Discovery brought a broad change in globalization, being the first period in which Eurasia and Africa
engaged in substantial cultural, material and biologic exchange with the New World.[20] It began in the late 15th
century, when the two Kingdoms of the Iberian Peninsula - Portugal and Castile - sent the first exploratory
voyages[21] around the Horn of Africa and to the Americas, "discovered" in 1492 by Christopher Columbus. Shortly
before the turn of the 16th century, Portuguese started establishing trading posts (factories) from Africa to Asia and
Brazil, to deal with the trade of local products like gold, spices and timber, introducing an international business
center under a royal monopoly, the House of India.[22]

Global integration continued with the European colonization of the Americas initiating the Columbian Exchange,
[23]
 the enormous widespread exchange of plants, animals, foods, human populations
(including slaves), communicable diseases, and culture between the Eastern and Western hemispheres. It was one of
the most significant global events concerning ecology, agriculture, and culture in history. New crops that had come
from the Americas via the European seafarers in the 16th century significantly contributed to the world's population
growth.[24]

This phase is sometimes known as proto-globalization. It was characterized by the rise of maritime European
empires, in the 16th and 17th centuries, first the Portugueseand Spanish Empires, and later
the Dutch and British Empires. In the 17th century, globalization became also a private business phenomenon
when chartered companieslike British East India Company (founded in 1600), often described as the
first multinational corporation, as well as the Dutch East India Company (founded in 1602) were established.
Because of the large investment and financing needs and high risks involved in international trade, the British East
India Company became the first company in the world to share risk and enable joint ownership of companies
through the issuance of shares of stock: an important driver for globalization.[citation needed]

Animated map showing Colonial empiresevolution from 1492 to present

19th century Great Britain become the first global economic superpower, because of superior manufacturing technology and improved
global communications such assteamships and railroads.

The 19th century witnessed the advent of globalization approaching its modern form. Industrialization allowed
cheap production of household items using economies of scale, while rapid population growth created sustained
demand for commodities. Globalization in this period was decisively shaped by nineteenth-century imperialism.
After the Opium Wars and the completion of British conquest of India, vast populations of these regions became
ready consumers of European exports. It was in this period that areas of sub-Saharan Africa and the Pacific islands
were incorporated into the world system. Meanwhile, the conquest of new parts of the globe, notably sub-Saharan
Africa, by Europeans yielded valuable natural resources such as rubber, diamonds and coal and helped fuel trade and
investment between the European imperial powers, their colonies, and the United States.[citation needed] Said John
Maynard Keynes,[25]

The inhabitant of London could order by telephone, sipping his morning tea, the various products of
“ the whole earth, and reasonably expect their early delivery upon his doorstep. Militarism and
imperialism of racial and cultural rivalries were little more than the amusements of his daily
newspaper. What an extraordinary episode in the economic progress of man was that age which came
to an end in August 1914. ”
The first phase of "modern globalization" began to break down at the beginning of the 20th century, with the first
world war. The novelist VM Yeates criticised the financial forces of globalization as a factor in creating World War
I.[26] The final death knell for this phase came during the gold standard crisis and Great Depression in the late 1920s
and early 1930s.[citation needed]

In the middle decades of the twentieth century globalization was largely driven by the global expansion
of multinational corporations based in the United States and Europe, and worldwide exchange of new developments
in science, technology and products, with most significant inventions of this time having their origins in the Western
world according to Encyclopædia Britannica.[27] Worldwide export of western culture went through the new mass
media: film, radio and television and recorded music. Development and growth of
international transport and telecommunication played a decisive role in modern globalization.

In late 2000s, much of the industrialized world entered into a deep recession.[28] Some analysts say the world is
going through a period of deglobalization after years of increasing economic integration.[29][30] Up to 45% of global
wealth had been destroyed by the global financial crisis in little less than a year and a half.[31] China has recently
become the world's largest exporter surpassing Germany.[32]

[edit]Post-World War II
Globalization, since World War II, is largely the result of planning by politicians to break down borders hampering
trade to increase prosperity and interdependence thereby decreasing the chance of future war. Their work led to
the Bretton Woods conference, an agreement by the world's leading politicians to lay down the framework for
international commerce and finance, and the founding of several international institutions intended to oversee the
processes of globalization.

These institutions include the International Bank for Reconstruction and Development (the World Bank), and
the International Monetary Fund. Globalization has been facilitated by advances in technology which have reduced
the costs of trade, and trade negotiation rounds, originally under the auspices of the General Agreement on Tariffs
and Trade (GATT), which led to a series of agreements to remove restrictions on free trade.
Since World War II, barriers to international trade have been considerably lowered through international
agreements — GATT. Particular initiatives carried out as a result of GATT and the World Trade
Organization(WTO), for which GATT is the foundation, have included:

 Promotion of free trade:

 elimination of tariffs; creation of free trade zones with small or no tariffs
 Reduced transportation costs, especially resulting from development of containerization for ocean
shipping.
 Reduction or elimination of capital controls
 Reduction, elimination, or harmonization of subsidies for local businesses
 Creation of subsidies for global corporations
 Harmonization of intellectual property laws across the majority of states, with more restrictions
 Supranational recognition of intellectual property restrictions (e.g. patents granted by China would
be recognized in the United States)

Cultural globalization, driven by communication technology and the worldwide marketing of Western cultural
industries, was understood at first as a process of homogenization, as the global domination of American culture at
the expense of traditional diversity. However, a contrasting trend soon became evident in the emergence of
movements protesting against globalization and giving new momentum to the defense of local uniqueness,
individuality, and identity.[33]

The Uruguay Round (1986 to 1994)[34] led to a treaty to create the WTO to mediate trade disputes and set up a
uniform platform of trading. Other bilateral and multilateral trade agreements, including sections of
Europe's Maastricht Treaty and the North American Free Trade Agreement (NAFTA) have also been signed in
pursuit of the goal of reducing tariffs and barriers to trade.

World exports rose from 8.5% in 1970, to 16.2% of total gross world product in 2001.[35]

[edit]Measurement

Looking specifically at economic globalization demonstrates that it can be measured in different ways. These center
around the four main economic flows that characterize globalization:

 Goods and services, e.g., exports plus imports as a proportion of national income or per capita of

population
 Labor/people, e.g., net migration rates; inward or outward migration flows, weighted by population
 Capital, e.g., inward or outward direct investment as a proportion of national income or per head of
population
 Technology, e.g., international research & development flows; proportion of populations (and rates of
change thereof) using particular inventions (especially 'factor-neutral' technological advances such as the
telephone, motorcar, broadband)

As globalization is not only an economic phenomenon, a multivariate approach to measuring globalization is the
recent index calculated by the Swiss think tank KOF. The index measures the three main dimensions of
globalization: economic, social, and political. In addition to three indices measuring these dimensions, an overall
index of globalization and sub-indices referring to actual economic flows, economic restrictions, data on personal
contact, data on information flows, and data on cultural proximity is calculated. Data is available on a yearly basis
for 122 countries, as detailed in Dreher, Gaston and Martens (2008).[36] According to the index, the world's most
globalized country is Belgium, followed by Austria, Sweden, the United Kingdom and the Netherlands. The least
globalized countries according to the KOF-index are Haiti, Myanmar, the Central African Republic and Burundi.[37]

A.T. Kearney and Foreign Policy Magazine jointly publish another Globalization Index. According to the 2006

index, Singapore, Ireland, Switzerland, the Netherlands, Canada and Denmark are the most globalized,
while Indonesia, India and Iran are the least globalized among countries listed.

[edit]Effects

Globalization has various aspects which affect the world in several different ways such as:

 Industrial - emergence of worldwide production markets and broader access to a range of foreign products
for consumers and companies. Particularly movement of material and goods between and within national
boundaries. International trade in manufactured goods increased more than 100 times (from $95 billion to $12
trillion) in the 50 years since 1955.[38] China's trade with Africa rose sevenfold during 2000-07 alone.[39][40]
 Financial - emergence of worldwide financial markets and better access to external financing for
borrowers. By the early part of the 21st century more than $1.5 trillion in national currencies were traded daily
to support the expanded levels of trade and investment.[41] As these worldwide structures grew more quickly
than any transnational regulatory regime, the instability of the global financial infrastructure dramatically
increased, as evidenced by the Financial crisis of 2007–2010.[42]
As of 2005–2007, the Port of Shanghaiholds the title as the World's busiest port.[43][44][45]

 Economic - realization of a global common market, based on the freedom of exchange of goods and capital.
[46]
 The interconnectedness of these markets, however, meant that an economic collapse in any one given
country could not be contained.[citation needed]

Almost all notable worldwide ITcompanies are now present in India. Four Indians were among the world's top 10 richest in 2008, worth
a combined $160 billion.[47] In 2007, China had 415,000 millionaires and India 123,000.[48]

 Health Policy - On the global scale, health becomes a commodity. In developing nations under the
demands of Structural Adjustment Programs, health systems are fragmented and privatized. Global health
policy makers have shifted during the 1990s from United Nations players to financial institutions. The result of
this power transition is an increase in privatization in the health sector. This privatization fragments health
policy by crowding it with many players with many private interests. These fragmented policy players
emphasize partnerships and specific interventions to combat specific problems (as opposed to comprehensive
health strategies). Influenced by global trade and global economy, health policy is directed by technological
advances and innovative medical trade. Global priorities, in this situation, are sometimes at odds with national
priorities where increased health infrastructure and basic primary care are of more value to the public than
privatized care for the wealthy.[49]
 Political - some use "globalization" to mean the creation of a world government which regulates the
relationships among governments and guarantees the rights arising from social and economic globalization.
[50]
 Politically, the United States has enjoyed a position of power among the world powers, in part because of its
strong and wealthy economy. With the influence of globalization and with the help of The United States’ own
economy, the People's Republic of China has experienced some tremendous growth within the past decade. If
China continues to grow at the rate projected by the trends, then it is very likely that in the next twenty years,
there will be a major reallocation of power among the world leaders. China will have enough wealth, industry,
and technology to rival the United States for the position of leading world power.[51]
 Informational - increase in information flows between geographically remote locations. Arguably this is a
technological change with the advent of fibre optic communications, satellites, and increased availability of
telephone and Internet.
 Language - the most popular first language is Mandarin (845 million speakers) followed by Spanish (329
million speakers) and English (328 million speakers).[52]However the most popular second language is
undoubtedly English, the "lingua franca" of globalization:
 About 35% of the world's mail, telexes, and cables are in English.
 Approximately 40% of the world's radio programs are in English.
 About 50% of all Internet traffic uses English.[53]
 Competition - Survival in the new global business market calls for improved productivity and increased
competition. Due to the market becoming worldwide, companies in various industries have to upgrade their
products and use technology skillfully in order to face increased competition.[54]
 Ecological - the advent of global environmental challenges that might be solved with international
cooperation, such as climate change, cross-boundary water and air pollution, over-fishing of the ocean, and the
spread of invasive species. Since many factories are built in developing countries with less environmental
regulation, globalism and free trade may increase pollution. On the other hand, economic development
historically required a "dirty" industrial stage, and it is argued that developing countries should not, via
regulation, be prohibited from increasing their standard of living.

Britain is a country of rich diversity. As of 2008, 40% of London's total population was from an ethnic minority group. The latest official
figures show that in 2008, 590,000 people arrived to live in the UK whilst 427,000 left, meaning that net inward migration was 163,000.
[55]

 Cultural - growth of cross-cultural contacts; advent of new categories of consciousness and identities which
embodies cultural diffusion, the desire to increase one's standard of living and enjoy foreign products and ideas,
adopt new technology and practices, and participate in a "world culture". Some bemoan the
resultingconsumerism and loss of languages. Also see Transformation of culture.
  Spreading of multiculturalism, and better individual access to cultural diversity (e.g. through the
export of Hollywood). Some consider such "imported" culture a danger, since it may supplant the local
culture, causing reduction in diversity or even assimilation. Others consider multiculturalism to promote
peace and understanding between people. A third position that gained popularity is the notion that
multiculturalism to a new form of monoculture in which no distinctions exist and everyone just shift
between various lifestyles in terms of music, cloth and other aspects once more firmly attached to a single
culture. Thus not mere cultural assimilation as mentioned above but the obliteration of culture as we know
it today.[56][57] In reality, as it happens in countries like the United Kingdom, Canada, Australia or New
Zealand, people who allways lived in their native countries maintain their cultures without feeling forced
by any reason to accept another and are proud of it even when they're acceptive of immigrants, while
people who are newly arrived simply keep their own culture or part of it despite some minimum ammount
of assimilation, although aspects of their culture often become a curiosity and a daily aspect of the lives of
the people of the welcoming countries.
 Greater international travel and tourism. WHO estimates that up to 500,000 people are on planes
at any one time.[citation needed][58] In 2008, there were over 922 million international tourist arrivals, with a
growth of 1.9% as compared to 2007.[59]
 Greater immigration,[60] including illegal immigration.[61] The IOM estimates there are more than
200 million migrants around the world today.[62] Newly available data show that remittance flows to
developing countries reached $328 billion in 2008.[63]
 Spread of local consumer products (e.g., food) to other countries (often adapted to their culture).
 Worldwide fads and pop culture such as Pokémon, Sudoku, Numa Numa, Origami, Idol
series, YouTube, Orkut, Facebook, and MySpace. Accessible to those who have Internet or Television,
leaving out a substantial segment of the Earth's population.

The construction of continental hotels is a major consequence of globalization process in affiliation

with tourism and travel industry,Dariush Grand Hotel, Kish, Iran

 Worldwide sporting events such as FIFA World Cup and the Olympic Games.

  Incorporation of multinational corporations into new media. As the sponsors of the All-
Blacks rugby team, Adidas had created a parallel website with a downloadable interactive rugby game for
its fans to play and compete.[64]
 Social - development of the system of non-governmental organisations as main agents of global public
policy, including humanitarian aid and developmental efforts.[65]
 Technical
 Development of a Global Information System, global telecommunications infrastructure and
greater transborder data flow, using such technologies as the Internet,communication satellites, submarine
fiber optic cable, and wireless telephones
 Increase in the number of standards applied globally; e.g., copyright laws, patents and world trade
agreements.
 Legal/Ethical
 The creation of the international criminal court and international justice movements.
 Crime importation and raising awareness of global crime-fighting efforts and cooperation.
 The emergence of Global administrative law.
 Religious
 The spread and increased interrelations of various religious groups, ideas, and practices and their
ideas of the meanings and values of particular spaces.[66]
[edit]Cultural effects

Globalization has had an impact on different cultures around the world.

Japanese McDonald's fast food as an evidence of corporate globalization and the integration of the same into different cultures.

"Culture" is defined as patterns of human activity and the symbols that give these activities significance. Culture is
what people eat, how they dress, beliefs they hold, and activities they practice. Globalization has joined different
cultures and made it into something different. As Erla Zwingle, from the National Geographic article titled
"Globalization" states, "When cultures receive outside influences, they ignore some and adopt others, and then
almost immediately start to transform them."[67]

One classic culture aspect is food. Someone in America can be eating Japanese noodles for lunch while someone in
Sydney, Australia is eating classic Italian meatballs. India is known for its curry and exotic spices. France is known
for its cheeses. North America is known for its burgers and fries. McDonald's is a North American company which
is now a global enterprise with 31,000 locations worldwide. This company is just one example of food causing
cultural influence on the global scale.

Another common practice brought about by globalization is the usage of Chinese characters in tattoos. These tattoos
are popular with today's youth despite the lack of social acceptance of tattoos in China.[68] Also, there is a lack of
comprehension in the meaning of Chinese characters that people get,[69] making this an example ofcultural
appropriation.

The internet breaks down cultural boundaries across the world by enabling easy, near-instantaneous communication
between people anywhere in a variety of digital forms and media. The Internet is associated with the process of
cultural globalization because it allows interaction and communication between people with very different lifestyles
and from very different cultures. Photo sharing websites allow interaction even where language would otherwise be
a barrier.

[edit]Negative effects
See also: Alter-globalization, Participatory economics, and Global Justice Movement

Globalization has been one of the most hotly debated topics in international economics over the past few years.
Globalization has also generated significant international opposition over concerns that it has increased inequality
and environmental degradation.[70] In the Midwestern United States, globalization has eaten away at its competitive
edge in industry and agriculture, lowering the quality of life in locations that lack the opportunity to adapt to the
change.[71]

Some also view the effect of globalization on culture as a rising concern. Along with globalization of economies and
trade, culture is being imported and exported as well. The concern is that the stronger, bigger countries such as the
United States, may overrun the other, smaller countries' cultures, leading to those customs and values being faded
away. This process is also sometimes referred to as Americanization or McDonaldization. [72]

[edit]Sweatshops
A maquila in Mexico

It can be said that globalization is the door that opens up an otherwise resource-poor country to the international
market. Where a country has little material or physical product harvested or mined from its own soil, large
corporations see an opportunity to take advantage of the "export poverty" of such a nation. Where the majority of
the earliest occurrences of economic globalization are recorded as being the expansion of businesses and corporate
growth, in many poorer nations globalization is actually the result of the foreign businesses investing in the country
to take advantage of the lower wage rate: even though investing, by increasing the Capital Stock of the country,
increases their wage rate.

One example used by anti-globalization protestors is the use of sweatshops by manufacturers. According to Global
Exchange these "Sweat Shops" are widely used by sports shoe manufacturers and mentions one company in
particular – Nike.[73] There are factories set up in the poor countries where employees agree to work for low wages.
Then if labour laws alter in those countries and stricter rules govern the manufacturing process the factories are
closed down and relocated to other nations with more conservative, laissez-faire economic policies.[citation needed]

There are several agencies that have been set up worldwide specifically designed to focus on anti-sweatshop
campaigns and education of such. In the USA, the National Labor Committee has proposed a number of bills as part
of The Decent Working Conditions and Fair Competition Act, which have thus far failed in Congress. The
legislation would legally require companies to respect human and worker rights by prohibiting the import, sale, or
export of sweatshop goods.[74]

Specifically, these core standards include no child labor, no forced labor, freedom of association, right to organize
and bargain collectively, as well as the right to decent working conditions.[75]

Tiziana Terranova has stated that globalization has brought a culture of "free labour". In a digital sense, it is where
the individuals (contributing capital) exploits and eventually "exhausts the means through which labour can sustain
itself". For example, in the area of digital media (animations, hosting chat rooms, designing games), where it is often
less glamorous than it may sound. In the gaming industry, a Chinese Gold Market has been established.[76]
[edit]Negative effects of economic liberalization
Further information: Neoliberalism
The world today is so interconnected that the collapse of the subprime mortgage market in the U.S. has led to
a global financial crisis and recession on a scale not seen since the Great Depression.[77] Government deregulation
and failed regulation of Wall Street's investment banks were important contributors to the subprime mortgage crisis.
[78][79]

A flood of consumer goods such as televisions, radios, bicycles, and textiles into the United States, Europe, and
Japan has helped fuel the economic expansion of Asian tiger economies in recent decades.[80]However,
Chinese textile and clothing exports have recently encountered criticism from Europe, the United States and some
African countries.[81][82] In South Africa, some 300,000 textile workers have lost their jobs due to the influx of
Chinese goods.[83] The increasing U.S. trade deficit with China has cost 2.4 million American jobs between 2001 and
2008, according to a study by the Economic Policy Institute (EPI).[84] A total of 3.2 million – one in six U.S. factory
jobs – have disappeared between 2000 and 2007.[85]

[edit]Brain drain

Opportunities in richer countries drives talent away from poorer countries, leading to brain drains. Brain drain has
cost the African continent over $4.1 billion in the employment of 150,000 expatriate professionals annually.
[86]
 Indian students going abroad for their higher studies costs India a foreign exchange outflow of $10 billion
annually.[87]
[edit]Environmental degradation

Burning forest in Brazil. The removal of forest to make way for cattle ranching was the leading cause of deforestation in the Brazilian
Amazon from the mid 1960s. Recently, soybeans have become one of the most important contributors to deforestation in the Brazilian
Amazon.[88]

The Worldwatch Institute said the booming economies of China and India are planetary powers that are shaping the
global biosphere. In 2007, China overtook the United States as the world's biggest producer of CO2.[89] At present
rates, tropical rainforests in Indonesia would be logged out in 10 years, Papua New Guinea in 13 to 16 years.[90] A
major source of deforestation is the logging industry, driven spectacularly by China and Japan.[91] Thriving
economies such as China and India are quickly becoming large oil consumers.[92][93] China has seen oil consumption
grow by 8% yearly since 2002, doubling from 1996–2006.[94] Crude oil prices in the last several years have steadily
risen from about $25 a barrel in August 2003 to over $140 a barrel in July 2008.[95] State of the World 2006 report
said the two countries' higheconomic growth hid a reality of severe pollution. The report states:

The world's ecological capacity is simply insufficient to satisfy the ambitions of China, India, Japan,
Europe and the United States as well as the aspirations of the rest of the world in a sustainable way [96]

Without more recycling, zinc could be used up by 2037, both indium and hafnium could run out by 2017,

and terbium could be gone before 2012.[97] It is said that if China and India were to consume as much
resources per capita as United States or Japan in 2030 together they would require a full planet Earth to meet
their needs.[98] In the longterm these effects can lead to increased conflict over dwindling resources[99] and in
the worst case a Malthusian catastrophe.

[edit]Food security

The head of the International Food Policy Research Institute, stated in 2008 that the gradual change in diet
among newly prosperous populations is the most important factor underpinning the rise in global food prices.
[100]
 From 1950 to 1984, as the Green Revolution transformed agriculture around the world, grain production
increased by over 250%.[101] The world population has grown by about 4 billion since the beginning of the
Green Revolution and most believe that, without the Revolution, there would be
greater famine and malnutrition than the UN presently documents (approximately 850 million people suffering
from chronic malnutrition in 2005).[102][103]

It is becoming increasingly difficult to maintain food security in a world beset by a confluence of "peak"

phenomena, namely peak oil, peak water, peak phosphorus, peak grain and peak fish. Growing populations,
falling energy sources and food shortages will create the "perfect storm" by 2030, according to the UK
government chief scientist. He said food reserves are at a 50-year low but the world requires 50% more
energy, food and water by 2030.[104][105] The world will have to produce 70% more food by 2050 to feed a
projected extra 2.3 billion people and as incomes rise, the United Nations' Food and Agriculture
Organisation (FAO) warned.[106] Social scientists have warned of the possibility that global civilization is due
for a period of contraction and economic re-localization, due to the decline in fossil fuels and resulting crisis
in transportation and food production.[107][108][109] One paper even suggested that the future might even bring
about a restoration of sustainable local economic activities based on hunting and gathering, shifting
horticulture, and pastoralism.[110]

The journal Science published a four-year study in November 2006, which predicted that, at prevailing trends,
the world would run out of wild-caught seafood in 2048.[111]
[edit]Disease
Further information: Globalization and disease
Globalization, the flow of information, goods, capital and people across political and geographic boundaries,
has also helped to spread some of the deadliest infectious diseases known to humans.[112] Starting in Asia,
the Black Death killed at least one-third of Europe's population in the 14th century.[113] Even worse devastation
was inflicted on the American supercontinent by Europe. For instance 90% of the populations of the
civilizations of the "New World" such as the Aztec, Maya, and Inca were killed by small pox brought
by European colonization. Modern modes of transportation allow more people and products to travel around
the world at a faster pace, they also open the airways to the transcontinental movement of infectious disease
vectors.[114] One example of this occurring is AIDS/HIV.[115] Approximately 1.1 million persons are living with
HIV/AIDS in the United States,[116] and AIDS remains the leading cause of death among African
American women between ages 25 and 34.[117] Due to immigration, approximately 500,000 people in the
United States are believed to be infected with Chagas disease.[118] In 2006, the tuberculosis (TB) rate among
foreign-born persons in the United States was 9.5 times that of U.S.-born persons.[119]

[edit]Drug and illicit goods trade

The United Nations Office on Drugs and Crime (UNODC) issued a report that the global drug trade generates
more than $320 billion a year in revenues.[120] Worldwide, the UN estimates there are more than 50 million
regular users of heroin, cocaine and synthetic drugs.[121] The international trade of endangered species is
second only to drug trafficking.[122] Traditional Chinese medicine often incorporates ingredients from all parts
of plants, the leaf, stem, flower, root, and also ingredients from animals and minerals. The use of parts of
endangered species (such as seahorses, rhinoceros horns, saiga antelope horns, and tiger bones and claws) has
created controversy and resulted in a black market of poachers who hunt restricted animals.[123][124] In 2003,
29% of open sea fisheries were in a state of collapse.[125]

[edit]Advocates

Supporters of free trade claim that it increases economic prosperity as well as opportunity, especially among
developing nations, enhances civil liberties and leads to a more efficient allocation of resources. Economic
theories of comparative advantage suggest that free trade leads to a more efficient allocation of resources, with
all countries involved in the trade benefiting. In general, this leads to lower prices, more employment, higher
output and a higher standard of living for those in developing countries.[126][127]

Dr. Francesco Stipo, Director of the USA Club of Rome suggests that "the world government should reflect
the political and economic balances of world nations. A world confederation would not supersede the
authority of the State governments but rather complement it, as both the States and the world authority would
have power within their sphere of competence".[128]

Proponents of laissez-faire capitalism, and some libertarians, say that higher degrees of political and economic
freedom in the form of democracy and capitalism in the developed world are ends in themselves and also
produce higher levels of material wealth. They see globalization as the beneficial spread of liberty and
capitalism.[126]

Supporters of democratic globalization are sometimes called pro-globalists. They believe that the first phase of
globalization, which was market-oriented, should be followed by a phase of building global political
institutions representing the will of world citizens. The difference from other globalists is that they do not
define in advance any ideology to orient this will, but would leave it to the free choice of those citizens via a
democratic process.[citation needed]

Some, such as former Canadian Senator Douglas Roche, O.C., simply view globalization as inevitable and
advocate creating institutions such as a directly elected United Nations Parliamentary Assembly to exercise
oversight over unelected international bodies.

[edit]Critics

Main article: Anti-globalization movement

See also: Alter-globalization, Participatory economics, and Global Justice Movement

The "anti-globalization movement" is a term used to describe the political group who oppose
the neoliberal version of globalization, while criticisms of globalization are some of the reasons used to justify
this group's stance.

"Anti-globalization" may also involve the process or actions taken by a state or its people in order to
demonstrate its sovereignty and practice democratic decision-making. Anti-globalization may occur in order
to maintain barriers to the international transfer of people, goods and beliefs, particularly free
market deregulation, encouraged by organizations such as the International Monetary Fund or the World
Trade Organization. Moreover, as Naomi Klein argues in her book No Logo, anti-globalism can denote either
a single social movement or an umbrella term that encompasses a number of separate social
movements[129]such as nationalists and socialists. In either case, participants stand in opposition to the
unregulated political power of large, multi-national corporations, as the corporations exercise power through
leveraging trade agreements which in some instances damage the democratic rights of citizens[citation needed],
the environment particularly air quality index and rain forests[citation needed], as well as national government's
sovereignty to determine labor rights,[citation needed] including the right to form a union, and health and safety
legislation, or laws as they may otherwise infringe on cultural practices and traditions of developing countries.
[citation needed]

Some people who are labeled "anti-globalist" or "sceptics" (Hirst and Thompson)[130] consider the term to be
too vague and inaccurate.[131][132] Podobnik states that "the vast majority of groups that participate in these
protests draw on international networks of support, and they generally call for forms of globalization that
enhance democratic representation, human rights, and egalitarianism."
Joseph Stiglitz and Andrew Charlton write:[133]

The anti-globalization movement developed in opposition to the perceived negative aspects of

“ globalization. The term 'anti-globalization' is in many ways a misnomer, since the group
represents a wide range of interests and issues and many of the people involved in the anti-
globalization movement do support closer ties between the various peoples and cultures of the
world through, for example, aid, assistance for refugees, and global environmental issues. ”
Some members aligned with this viewpoint prefer instead to describe themselves as the "Global Justice
Movement", the "Anti-Corporate-Globalization Movement", the "Movement of Movements" (a popular term
in Italy), the "Alter-globalization" movement (popular in France), the "Counter-Globalization" movement, and
a number of other terms.

Critiques of the current wave of economic globalization typically look at both the damage to the planet, in
terms of the perceived unsustainable harm done to the biosphere, as well as the perceived human costs, such as
poverty, inequality, miscegenation, injustice and the erosion of traditional culture which, the critics contend,
all occur as a result of the economic transformations related to globalization. They challenge directly the
metrics, such as GDP, used to measure progress promulgated by institutions such as the World Bank, and look
to other measures, such as the Happy Planet Index,[134] created by the New Economics Foundation.[135] They
point to a "multitude of interconnected fatal consequences–social disintegration, a breakdown of democracy,
more rapid and extensive deterioration of the environment, the spread of new diseases, increasing poverty and
alienation"[136] which they claim are the unintended but very real consequences of globalization.

The terms globalization and anti-globalization are used in various ways. Noam Chomsky believes that[137][138]

The term "globalization" has been appropriated by the powerful to refer to a specific form of
“ international economic integration, one based on investor rights, with the interests of people
incidental. That is why the business press, in its more honest moments, refers to the "free trade
agreements" as "free investment agreements" (Wall St. Journal). Accordingly, advocates of
other forms of globalization are described as "anti-globalization"; and some, unfortunately, even
accept this term, though it is a term of propaganda that should be dismissed with ridicule. No
sane person is opposed to globalization, that is, international integration. Surely not the left and
the workers movements, which were founded on the principle of international solidarity — that
is, globalization in a form that attends to the rights of people, not private power systems. ”
The dominant propaganda systems have appropriated the term "globalization" to refer to the
“ specific version of international economic integration that they favor, which privileges the rights
of investors and lenders, those of people being incidental. In accord with this usage, those who
”
favor a different form of international integration, which privileges the rights of human beings,
become "anti-globalist." This is simply vulgar propaganda, like the term "anti-Soviet" used by
the most disgusting commissars to refer to dissidents. It is not only vulgar, but idiotic. Take
the World Social Forum, called "anti-globalization" in the propaganda system – which happens
to include the media, the educated classes, etc., with rare exceptions. The WSF is a paradigm
example of globalization. It is a gathering of huge numbers of people from all over the world,
from just about every corner of life one can think of, apart from the extremely narrow highly
privileged elites who meet at the competing World Economic Forum, and are called "pro-
globalization" by the propaganda system. An observer watching this farce from Mars would
 collapse in hysterical laughter at the antics of the educated classes.

Critics argue that globalization results in:

 Poorer countries suffering disadvantages: While it is true that globalization encourages free trade among
countries, there are also negative consequences because some countries try to save their national markets.
The main export of poorer countries is usually agricultural goods. Larger countries often subsidise their
farmers (like the EU Common Agricultural Policy), which lowers the market price for the poor farmer's
crops compared to what it would be under free trade.[139]
 The exploitation of foreign impoverished workers: The deterioration of protections for weaker nations
by stronger industrialized powers has resulted in the exploitation of the people in those nations to become
cheap labor. Due to the lack of protections, companies from powerful industrialized nations are able to
offer workers enough salary to entice them to endure extremely long hours and unsafe working
conditions, though economists question if consenting workers in a competitive employers' market can be
decried as "exploited". It is true that the workers are free to leave their jobs, but in many poorer countries,
this would mean starvation for the worker, and possible even his/her family if their previous jobs were
unavailable.[140]
 The shift to outsourcing: The low cost of offshore workers have enticed corporations to buy goods and
services from foreign countries. The laid off manufacturing sector workers are forced into the service
sector where wages and benefits are low, but turnover is high .[citation needed] This has contributed to the
deterioration of the middle class[citation needed] which is a major factor in the increasing economic inequality in
the United States .[citation needed] Families that were once part of the middle class are forced into lower
positions by massive layoffs and outsourcing to another country. This also means that people in the lower
class have a much harder time climbing out of poverty because of the absence of the middle class as a
stepping stone.[141]
 Weak labor unions: The surplus in cheap labor coupled with an ever growing number of companies in
transition has caused a weakening of labor unions in the United States. Unions lose their effectiveness
when their membership begins to decline. As a result unions hold less power over corporations that are
able to easily replace workers, often for lower wages, and have the option to not offer unionized jobs
anymore.[139]
 An increase in exploitation of child labor: for example, a country that experiencing increases in labor
demand because of globalization and an increase the demand for goods produced by children, will
experience greater a demand for child labor. This can be "hazardous" or "exploitive", e.g., quarrying,
salvage, cash cropping but also includes the trafficking of children, children in bondage or forced labor,
prostitution, pornography and other illicit activities.[142]
In December 2007, World Bank economist Branko Milanovic has called much previous empirical research on
global poverty and inequality into question because, according to him, improved estimates of purchasing
power parity indicate that developing countries are worse off than previously believed. Milanovic remarks that
"literally hundreds of scholarly papers on convergence or divergence of countries’ incomes have been
published in the last decade based on what we know now were faulty numbers." With the new data, possibly
economists will revise calculations, and he also believed that there are considerable implications estimates of
global inequality and poverty levels. Global inequality was estimated at around 65 Gini points, whereas the
new numbers indicate global inequality to be at 70 on the Gini scale.[143]

The critics of globalization typically emphasize that globalization is a process that is mediated according to
corporate interests, and typically raise the possibility of alternative global institutions and policies, which they
believe address the moral claims of poor and working classes throughout the globe, as well as environmental
concerns in a more equitable way.[144]

The movement is very broad[citation needed], including church groups, national liberation
factions, peasant unionists, intellectuals, artists, protectionists, anarchists, those in support of relocalization
and others. Some are reformist, (arguing for a more moderate form of capitalism) while others are
more revolutionary (arguing for what they believe is a more humane system than capitalism) and others
are reactionary, believing globalization destroys national industry and jobs.

One of the key points made by critics of recent economic globalization is that income inequality, both between
and within nations, is increasing as a result of these processes. One article from 2001 found that significantly,
in 7 out of 8 metrics, income inequality has increased in the twenty years ending 2001. Also, "incomes in the
lower deciles of world income distribution have probably fallen absolutely since the 1980s". Furthermore, the
World Bank's figures on absolute poverty were challenged. The article was skeptical of the World Bank's
claim that the number of people living on less than $1 a day has held steady at 1.2 billion from 1987 to 1998,
because of biased methodology.[145]

A chart that gave the inequality a very visible and comprehensible form, the so-called 'champagne glass'
effect,[146] was contained in the 1992 United Nations Development Program Report, which showed the
distribution of global income to be very uneven, with the richest 20% of the world's population controlling
82.7% of the world's income.[147]

Distribution of world GDP, 1989

Quintile of Population Income

Richest 20% 82.7%

Second 20% 11.7%

Third 20% 2.3%

Fourth 20% 2.4%

Poorest 20% 0.2%

Source: United Nations Development Program. 1992 Human Development Report[148]

Economic arguments by fair trade theorists claim that unrestricted free trade benefits those with more financial
leverage (i.e. the rich) at the expense of the poor.[149]

Americanization related to a period of high political American clout and of significant growth of America's
shops, markets and object being brought into other countries. So globalization, a much more diversified
phenomenon, relates to a multilateral political world and to the increase of objects, markets and so on into
each others countries.

Critics of globalization talk of Westernization. A 2005 UNESCO report[150] showed that cultural exchange is
becoming more frequent from Eastern Asia but Western countries are still the main exporters of cultural
goods. In 2002, China was the third largest exporter of cultural goods, after the UK and US. Between 1994
and 2002, both North America's and the European Union's shares of cultural exports declined, while Asia's
cultural exports grew to surpass North America. Related factors are the fact that Asia's population and area are
several times that of North America.

Some opponents of globalization see the phenomenon as the promotion of corporatist interests.[151] They also
claim that the increasing autonomy and strength of corporate entities shapes the political policy of countries.
[152][153]

[edit]International social fora

See also: European Social Forum, Asian Social Forum, and World Social Forum

The first World Social Forum in 2001 was an initiative of the administration of Porto Alegre, Brazil. The
slogan of was "Another World Is Possible". It was here that the WSF's Charter of Principles was adopted to
provide a framework for the fora.
 The WSF became a periodic meeting: in 2002 and 2003 it was held again in Porto Alegre and became a
rallying point for worldwide protest against the American invasion of Iraq. In 2004 it was moved
to Mumbai,India, to make it more accessible to the populations of Asia and Africa. This last appointment saw
the participation of 75,000 delegates.

Regional fora took place following the example of the WSF, adopting its Charter of Principles. The
first European Social Forum was held in November 2002 in Florence. The slogan was "Against the war,
againstracism and against neo-liberalism". It saw the participation of 60,000 delegates and ended with a huge
demonstration against the war of 1,000,000 people according to the organizers. The other two ESFs took place
in Paris and London, in 2003 and 2004 respectively.

Recently there has been some discussion behind the movement about the role of the social forums. Some see
them as a "popular university", an occasion to make many people aware of the problems of globalization.
Others would prefer that delegates concentrate their efforts on the coordination and organization of the
movement and on the planning of new campaigns. However it has often been argued that in the dominated
countries (most of the world) the WSF is little more than an 'NGO fair' driven by Northern NGOs and donors
most of which are hostile to popular movements of the poor.[154]

[edit]Relation to Americanization
In the past, the argument that globalization could be equated in actuality to the spreading of American
culture was made.[155] The thorough spreading of American culture throughout the world was apparent. For
example, there were cola products shipped and sold in nearly every country in the world. American fashion
also seemed to be trending in most other countries. The United States was known as a hyperpower due to
its economic and military dominance at the time; the relative power of the US waned as other developing
nations such as the BRIC nations grew in strength, decreasing the forcefulness of the argument that
globalization is simply Americanization.

Privatization

Privatization is the incidence or process of transferring ownership of a business, enterprise, agency or public service from
the public sector (the state or government) to theprivate sector (businesses that operate for a private profit). In a broader
sense, privatization refers to transfer of any government function to the private sector - including governmental functions
like revenue collection and law enforcement.[1]

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 ajoint stock
company.[2]

Notable examples
See also: List of privatisations

The largest privatisation in history involved Japan Post. It was the nation's largest employer and one third of all
Japanese government employees worked for Japan Post. Japan Post was often said to be the largest holder of
personal savings in the world.

The Prime Minister Junichiro Koizumi wanted to privatise it because it was thought[by whom?] to be an inefficient and a
source for corruption. In September 2003, Koizumi's cabinet proposed splitting Japan Post into four separate
companies: a bank, an insurance company, a postal service company, and a fourth company to handle the post
offices as retail storefronts of the other three.

After the Upper House rejected privatisation, Koizumi scheduled nationwide elections for September 11, 2005. He
declared the election to be a referendum on postal privatisation. Koizumi subsequently won this election, gaining the
necessary supermajority and a mandate for reform, and in October 2005, the bill was passed to privatise Japan Post
in 2007.[12]

Nippon Telegraph and Telephone's privatisation in 1987 involved the largest share-offering in financial history at
the time.[13] 15 of the world's 20 largest public share offerings have been privatisations of telecoms.[13]

The United Kingdom's largest public-share offerings were privatisations of British Telecom and British Gas. The
largest public-share offering in France was France Telecom. Privatisation in Europe has led to genuine competition:
the former state-owned enterprises lost their monopolies due to legislation and technological change, competitors
entered the market, and prices for broadband access and telephone calls fell dramatically.[citation needed]

[edit]Negative responses
Privatisation proposals in key public service sectors such as water and electricity in many cases meet with strong
resistance from opposition political parties and from civil society groups, many of which regard them as natural
monopolies. Campaigns typically involve demonstrations and democratic political activities; sometimes the
authorities attempt to suppress opposition using violence (e.g. Cochabamba protests of 2000 in Bolivia and protests
in Arequipa, Peru, in June 2002). Opposition is often strongly supported by trade unions. Opposition is usually
strongest to water privatisation — as well as Cochabamba, recent examples
include Haiti, Ghana and Uruguay (2004). In the latter case a civil-society-initiated referendum banning water
privatisation was passed in October 2004.

[edit]Reversion
A reversion from contracted ownership of an enterprise or services to governmental ownership and/or provision is
called reverse privatisation or nationalization. Such a situation most often occurs when a privatisation contractor
fails financially and/or the governmental unit has failed to purchase satisfactory service at prices it regards as less
than with state-ownership or self-operation of services. Another circumstance may occur when greater control than
viable under privatisation is determined to be in the governmental unit's best interest.

National-security concerns may be the source of reverse privatisation actions when the most likely providers are
non-domestic or international corporations or entities. For example, in 2001, in response to the September 11th
attacks, the then-private airport security industry in the United States was nationalized[citation needed] and put under the
authority of the Transportation Security Administration.

How important is privatisation in India?

How important is privatisation in India [ Images ]? The first order issue is that of competition policy. When the
government hinders competition by blocking entry or FDI, this is deeply damaging. Once competitive conditions are
ensured, there are, indeed, benefits from shifting labour and capital to more efficient hands through privatisation, but
this is a second order issue.

The difficulties of governments that run businesses are well-known. PSUs face little "market discipline". There is
neither a fear of bankruptcy, nor are there incentives for efficiency and growth. The government is unable to obtain
efficiency in utilising labour and capital; hence the GDP of the country is lowered to the extent that PSUs control
labour and capital.

When an industry has large PSUs, which are able to sell at low prices because capital is free or because losses are
reimbursed by periodic bailouts, investment in that entire industry is contaminated. This was the experience of Japan
[Images ], where the "zombie firms" - loss-making firms that were artificially rescued by the government -
contaminated investment in their industries by charging low prices and forcing down the profit rate of the entire
industry.

Further, in many areas, the government faces conflicts of interest between a regulatory function and an ownership
function. As an example, the Ministry of Petroleum crafts policies which cater for the needs of government as owner,
which often diverge from what is best for India.

There is a fundamental loss of credibility when a government regulator faces PSUs in its sector: there is mistrust in
the minds of private investors, who demand very high rates of return on equity in return for bearing regulatory risk.

These arguments have led many economists to advocate large-scale privatisation, so as to clear the slate, and get on
with the task of building a mature market economy. The role model in this regard is Germany [  Images ]. After the
collapse of communism and the unification of East and West Germany, an auction was held for selling off all East
German PSUs.
Negative bids were permitted; i.e. the government was willing to even pay a private manager to take over a loss-
making business if no higher bid was to be found. Through this, Germany was able to erase the heritage of socialism,
and get on with the task of running an efficient market economy.

While such a game plan is entirely feasible in India, the present Parliament desires no privatisation. Does this mean
that in the immediate future, progress in economic policy on privatisation must merely wait for the next elections?

When we look at various industries in India, the gains from privatisation are quite heterogeneous. In some cases,
there are hopelessly loss-making PSUs. These operate in industries where private and foreign firms have been able
to come in, and the PSU has been left far behind the standards of quality and price set by the private sector.

The PSUs should ideally have been sold off long ago, but today, these firms are irrelevant for the competitive
dynamics of the industries that they operate in. The only issue is that of getting the land, the labour and some
machinery out of public hands.

When privatisation is achieved, India will benefit because the private buyer will produce more GDP using the same
resources, and the flow of budgetary support to these firms will cease. The government should be happy to get these
firms out of its hands with negative bids.

The next and most interesting category comprises industries like telecom and airlines. In these areas, India has
witnessed the dramatic benefits that come from the entry of private players.

Telecom and airline services in India are now dramatically improved, if not yet up to world-class, by changing rules in
a way that permitted limited entry to domestic and foreign players. The privatisation of VSNL [ Get Quote ] was
critically important because it was part of the opening up of the ILD sector to competition: the government would
arguably have been more tardy in opening up if it had a vested interest through ownership of VSNL.

However, the key innovation, which broke with the stasis of socialism was opening up entry barriers - not
privatisation.

In both sectors, the full benefits from permitting foreign competitors, which are only present in very muted fashion,
remain to be harnessed. While Spicejet is a good airline, there are bigger benefits waiting to be obtained by having
domestic flights run by Lufthansa and Singapore Airlines. In both sectors, the defining issue in policy is the removal of
entry barriers, not privatisation.

Looking forward, there is a good chance that in some years, BSNL, MTNL [ Get Quote ] and the merged airline will
end up like one of the many defunct PSUs of today. It makes sense for the government to sell today - while the going
is good. But the privatisation of these three firms is no longer the most important issue - the further elimination of
entry barriers faced by domestic and foreign firms is.

What does this tell us about banking? The decline in market shares of PSU banks, while helped along by strikes of
PSU bank unions, has proceeded only slowly. This is partly because there is a fundamentally non-level playing field
where private and foreign banks have deposit insurance for only Rs 100,000 of deposits while PSU banks have
unlimited deposit insurance. This gives one reason in favour of bank privatisation: it is inherently difficult to achieve
competitive conditions without privatisation.

But equally, there is no industry in India where the licence-permit raj hinders entry more than in the case of banking.
At a time when the Indian economy is booming, and every kind of business is being created, the one industry where
we see no new firms starting up is banking. This has surely got to do with government restrictions on entry.

There is absolutely no industry in India where the opening of branch offices by foreign firms and private firms requires
permission from the government. When Ford [ Images ] operates in India, it has to obey rules on FDI, but after that, it
never has to go back to the government to take permission to open offices.

What is worse, all foreign banks - put together - are given permission to open 12 branches per year in the full country.
There is no worse instance where contemporary Indian policy-making is animated by ideas from the 1960s.  

Liberalization
In general, liberalization (or liberalisation) 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.
[1]
 Liberalization of autocratic regimes may precede democratization (or not, as in the case of the Prague Spring).

In the arena of social policy it may refer to a relaxation of laws restricting for
example divorce, abortion, homosexuality or drugs.

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 ofcompetition; but some of
the leading European energy companies (such as EDF and Vattenfall) 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

There is also a concept of hybrid liberalisation as, for instance, in Ghana where cocoa crop can be sold to a variety of
competing private companies, but there is a minimum price for which it can be sold and all exports are controlled by the
state[2].
[edit]Liberalization vs Democratization

There is a distinct difference between liberalization and democratization, which are often thought to be the same concept.
Liberalization can take place without democratization, and deals with a combination of policy and social change
specialized to a certain issue such as the liberalization of government-held property for private purchase, whereas
democratization is more politically specialized that can arise from a liberalization, but works in a broader level of
government.

The liberalisation of the Indian economy started in 1991 with the government’s attempts to
decontrol the economy and open Indian markets to rest of the world. Its perceived or
projected impact was certainly faster economic progress for the country. Its needs were
debated and re-debated for long by everyone in the intelligentsia. All those who considered
themselves as custodians of values, culture, and nationalism, voiced its likely impact. All
those who considered themselves as saviours of the workforce, debated its impact on likely
unemployment. For long, it remained an important topic at top B & E-schools for group
discussions. However, during this phase of debating pros and cons of liberalisation one
thing, which I did not hear, was “How will it impact the workforce?”

Today, more than a decade after the start of liberalisation, this impact is being debated.

Visible outcomes

 Accelerated movement of the workforce to so called new economy and geographic

dislocations.
 More choice/options (to save, spend, or store).
 Higher speed of change (products, people, or possibilities).
 Survival of the powerful (money, manipulation, muscle). Here the word powerful has
replaced ‘the fittest’.
 More hype about personalities, companies, desires, or even calamities.
 Higher degree of information.

Each one of these areas and visible outcomes has affected/impacted the workforce both
positively and adversely in areas of:

Competency level

The old manual skill based worker dominance is changing to knowledge based worker
dominance. It is changing the whole process of supervision and governance. Further, rate of
redundancy of competency is increasing. Required skill sets change with changing
technology. In order to remain current and employable workforce is constantly on the look
out for latest skill sets. As a result, their attention is divided in doing the job and acquiring
new skills. This is leading to the demand for being associated with newer technologies and
unidirectional job rotations. This has also led to job-hopping at faster rate and lack of
workforce with mature or high levels of competency.

At the same time, it is becoming a knowledge world today, more and more people are
becoming domain experts. Along with high competency levels in specific domains, the
workforce today is extremely flexible and has phenomenal capacity to adapt or shift its
domain expertise. Outsourcing the most talked of and used phenomenon today has resulted
from economies of volumes and domain expertise in specific areas.

The workforce today is more informed and is also well-versed with the latest trends and
technological value-adds, it is thereby in a position to provide better services and efforts.
However, faster rate of technology adoption than assimilation has created a sharp divide in
the competency base of haves and have-nots.

We are coming into an era where “a specialist in a specialized field is transforming into a
generalist who is capable of performing specialist activity.”

Work habits

Changing work environment, personal demands and social fabrics are causing changes in
work habits. Further, the fear of losing a job amongst knowledge workers makes them work
more as individuals rather then teams. Availability of information through Net surfing is
making knowledge workers adopt cut and paste methodology rather then being genuine and
creative.

Due to shorter service spans, the habit of managing the situation rather then managing job
with mid and long-term perspective is creeping in. Demand to “prove fast or move” by
employers due to high competition and cost pressures coupled with inadequate business
monitoring scenario (where overall enterprise management, strict process and legal controls
are still not mature) at times force the workforce to adopt shortcuts.

On the positive note, the cut and paste habits can be seen as habit of plug and play
components. This enables the informed and intellectual workforce to produce innovative
creations.

In this intensely competitive era, the rat race for being “the first mover” has reached its
peak. This has created desire amongst the workforce to be more innovative than repetitive
when it comes to their work.

Habit of reinventing the wheel is disappearing

Research reports have revealed that this “well informed and current in every respect
workforce” is able to don a mask and portray themselves in an extremely positive light, thus
easily faking expertise and experiences at selection. This, at times, results in poor
performance and is a great source of dismay for employers.

Today’s workforce is ready to don the mantle of “Entrepreneur” and go all out for its goals.
Delegation and participative management with flatter organisational structures are
becoming today’s mantras to suit current work habits. Though this brand of
“entrepreneurship” is welcome, it comes coupled with increased levels of indiscipline and
disrespect to organisational systems or procedures and policies.

Psychological impact

Liberalisation has impacted longevity of business and product cycles adversely. This has led
to quicker starting and winding up of businesses. Automa-tion has improved productivity
and made many jobs redundant. Thus the workforce is under a constant threat of:
  Loss of jobs—high rate of downsizing, right sizing;
 Faster rate of skill redundancy (increasing need of new skill sets);
 Hire and fire policies;
 Continuous struggle to prove one’s worth;
 Transfer to new geographic locations;
 Negative changes in remuneration and benefits;
 Constantly changing peers, supervisors and subordinates (working with new people).

Even the stars of recent past are highly insecure and unsure of themselves. This all has
given rise to high degree of stress and stress related psychological disorders.

Liberalisation has resulted in a wholly new “call centre industry” that has opened its doors to
the younger generation. Here employees and employers face a totally different set of
challenges.

These are the workplaces where employee’s name, speaking style and even mannerisms are
changed. I fear a unique phenomenon of split personality, which could even disturb their
personal life.

Paradoxically today’s comforts have come packaged with lot of mental stress levels, chronic
fatigue and short-term personal and professional relationships. The stability or security
factor in all aspects of life has tremendously deteriorated.