Liberalisation, Privatisation & Globalisation | Economics Class12 NCERT | Animation

Summary

The video script explores India's economic transition from 1950 to 1990, highlighting the mixed economy and its limitations. It delves into the 1991 economic crisis, leading to the New Economic Policy which introduced liberalization, privatization, and globalization. The policy aimed to stabilize the economy through short-term measures and foster long-term growth through structural reforms, impacting sectors like industry, finance, and agriculture. The script also discusses the policy's outcomes, including increased GDP growth, foreign investment, and exports, alongside criticisms regarding unemployment, agricultural decline, and widening economic disparities.

Takeaways

• 📈 India adopted a mixed economy post-independence with policies that spurred some development but were criticized for not achieving optimal growth.
• 💡 The New Economic Policy of 1991 was introduced in response to a severe economic crisis, aiming to open up the economy and reduce the government's role.
• 🏦 The government faced a fiscal deficit in the 1980s, leading to high expenditure without sufficient income, resulting in increased borrowing and debt.
• 🌐 Foreign exchange reserves were depleted due to high imports, defense spending, and a lack of export focus, culminating in a critical economic juncture in 1991.
• 💼 The World Bank and IMF provided a bailout loan under conditions that required India to liberalize its economy and implement structural reforms.
• 🚀 The reforms were categorized into stabilization measures for short-term economic stability and structural reforms for long-term efficiency and competitiveness.
• 🔓 Liberalization involved deregulation and reduced restrictions on the private sector, allowing for more entrepreneurial freedom and market-driven pricing.
• 🏦 Financial sector reforms aimed to empower the RBI as a facilitator rather than a strict regulator, promoting competition and the entry of private banks.
• 💼 Privatization efforts sought to modernize and increase the efficiency of state-owned enterprises by transferring ownership to the private sector.
• 🌍 Globalization policies led to increased foreign investment and integration into the global market, with India becoming a significant exporter of various goods and services.
• 📉 Despite overall economic growth, the reforms were criticized for not adequately addressing issues in agriculture, employment, and infrastructure, and for widening economic disparities.

Q & A

What economic policy did India adopt from 1950 to 1990?

India adopted a mixed economy policy during this period, which involved a combination of both public and private sectors.

What was the economic situation in India in 1991?

In 1991, India faced a severe economic crisis, which led to the implementation of a new economic policy.

What were the main reasons for the economic crisis in the 1980s in India?

The economic crisis was due to the government's inability to manage the economy properly, with high expenditures, low income generation, and a lack of focus on increasing exports.

What is the significance of foreign exchange reserves for a country?

Foreign exchange reserves are crucial for a country as they are used to pay for imports and are a sign of economic stability. A lack of reserves can lead to economic vulnerability.

How did the Indian government address the economic crisis of 1991?

The government addressed the crisis by implementing the New Economic Policy of 1991, which included opening up the economy, reducing government control, and liberalizing international trade.

What were the two main categories of reforms introduced in the New Economic Policy of 1991?

The two main categories of reforms were stabilization measures, which focused on short-term changes to stabilize the economy, and structural reform measures, which aimed at long-term changes to increase efficiency and competitiveness.

What is meant by 'liberalization' in the context of the Indian economy?

Liberalization refers to the removal or reduction of restrictions on the private sector, allowing for more freedom in business operations and reducing the need for government licenses.

How did the financial sector reforms in India impact the banking system?

The financial sector reforms transformed the Reserve Bank of India from a regulator to a facilitator, allowing banks to make decisions independently as long as they served the interests of account holders and the nation.

What was the impact of the New Economic Policy on India's GDP growth rate?

The GDP growth rate increased significantly after the reforms, with an overall growth rate of 5.6% between 1980 and 1991 rising to 8.2% between 2007 and 2012.

What criticisms have been raised regarding the New Economic Policy?

Critics argue that the policy did not address basic issues such as employment, agriculture, industry, and infrastructure development, and that it increased economic disparity, benefiting the rich more than the poor.

How did the New Economic Policy affect India's international trade and foreign investment?

The policy led to a rapid increase in foreign investment and a significant growth in India's exports, making India a successful exporter of various goods and services.

What was the role of the World Trade Organization (WTO) in the context of India's economic reforms?

The WTO played a crucial role in administering global trade rules and regulations, promoting international trade, and ensuring fair access to international markets for its member countries, including India.

Outlines

00:00

📈 Economic Crisis and the 1991 Policy Reforms in India

The first paragraph discusses the economic policies of India from 1950 to 1990, which led to a mixed economy with debates on its effectiveness. It highlights food security and industrial diversification as achievements but also points to an economic crisis in 1991 due to poor management in the 1980s. The crisis was characterized by high government expenditure, low income from taxes and public sector enterprises, and high military spending due to wars. The foreign exchange reserves were depleted, leading to a loan from international financial institutions under the condition of economic liberalization. The New Economic Policy of 1991 aimed to stabilize the economy through short-term stabilization measures and long-term structural reforms, focusing on liberalization, privatization, and globalization.

05:02

🏭 Sectoral Reforms and Their Impact on the Indian Economy

The second paragraph delves into the specific reforms implemented in various sectors post-1991. Industrial deregulation removed the need for government permission for most industries, allowing the private sector to enter sectors previously reserved for the government. Price controls were relaxed, and financial sector reforms aimed to make the Reserve Bank of India a facilitator rather than a strict regulator. This led to the establishment of private banks and the entry of foreign institutional investors into the Indian financial market. Tax reforms included reductions in direct and indirect tax rates, and the simplification of the tax system with the introduction of GST. Foreign exchange reforms involved devaluing the Indian rupee to boost exports and allowing market forces to determine the exchange rate. Trade and investment policies were liberalized to increase competition and efficiency among Indian industries.

10:03

🌐 Globalization and Its Effects on Indian Industries and Economy

The third paragraph examines the effects of globalization, including the integration of the Indian economy with the global market, the rise of outsourcing, and the impact of multinational companies like Tata Steel. It discusses the role of the WTO in administering global trade rules and India's participation in it. The paragraph also presents data on India's economic growth post-reforms, highlighting the rapid increase in GDP, foreign investment, and foreign exchange reserves. However, it also points out criticisms of the reforms, such as insufficient job creation, a decline in agricultural growth, and the negative effects of liberalization on small farmers and domestic industries due to increased international competition.

15:06

📉 Critique of Reforms and the Disparity in Economic Growth

The final paragraph critiques the economic reforms, suggesting that while they led to overall economic growth, they did not address fundamental issues such as employment, agricultural development, and infrastructure. It discusses the negative consequences of globalization, such as increased economic disparity both within and between countries, and the challenges faced by domestic industries due to cheap imported goods. The paragraph also addresses the government's disinvestment strategy, tax revenue issues, and the use of disinvestment funds, arguing that these measures have not led to the desired outcomes in public welfare and development.

Keywords

💡Mixed Economy

A mixed economy is an economic system that combines elements of both capitalism and socialism. It is characterized by a balance between private enterprise and government intervention. In the context of the video, India adopted a mixed economy from 1950 to 1990, which involved both private and public sectors contributing to the economy. However, some scholars argue that the policies during this period did not lead to as much growth and development as they could have.

💡Economic Crisis

An economic crisis refers to a situation where an economy experiences a sudden, significant, and often prolonged downturn. In the video, the economic crisis of 1991 in India is highlighted as a turning point that led to the implementation of the New Economic Policy. The crisis was characterized by high fiscal deficits, low foreign exchange reserves, and a lack of growth.

💡Deficit

A deficit occurs when a government's expenditures exceed its revenues. In the video, the Indian government's deficit during the 1980s is discussed as a contributing factor to the economic crisis of 1991. The deficit was addressed by taking loans, which eventually led to a situation where the government could not even pay the interest on these loans.

💡Foreign Exchange Reserves

Foreign exchange reserves are the foreign currencies held by a country's central bank, used to back up its currency and to pay for imports. In the video, the depletion of India's foreign exchange reserves is mentioned as a critical issue that arose from the economic mismanagement of the 1980s, leading to a situation where India could only afford imports for two more weeks.

💡New Economic Policy (1991)

The New Economic Policy of 1991 was a series of economic reforms introduced by the Government of India to liberalize the Indian economy. The policy aimed to reduce the role of the government in the economy and encourage private sector participation. The video discusses how this policy was implemented in response to the economic crisis and included measures such as liberalization, privatization, and globalization.

💡Liberalization

Liberalization refers to the relaxation or removal of restrictions, particularly in the economic sphere. In the video, liberalization is one of the key components of the New Economic Policy, where the government removed or reduced restrictions on the private sector, allowing for greater freedom in industry, finance, and trade.

💡Privatization

Privatization is the process of transferring ownership of state-owned enterprises to the private sector. The video explains that as part of the New Economic Policy, the Indian government undertook privatization to modernize companies and improve their efficiency by selling government stakes in various enterprises.

💡Globalization

Globalization is the process of increased interconnectedness and interdependence among countries, particularly in economic terms. The video discusses how globalization was a part of India's New Economic Policy, leading to greater integration with the world economy, increased foreign investment, and a more competitive environment for Indian industries.

💡Structural Reform

Structural reform refers to long-term changes aimed at improving the efficiency and effectiveness of an economy. In the video, structural reforms were a part of the New Economic Policy, focusing on areas such as liberalization, privatization, and globalization to create a competitive environment and increase the efficiency of the Indian economy.

💡Balance of Payments

Balance of payments is a record of all economic transactions between a country and the rest of the world. The video mentions the balance of payments to illustrate the trade imbalance that India faced during the economic crisis, characterized by high imports and low exports, which contributed to the depletion of foreign exchange reserves.

💡Disinvestment

Disinvestment is the process of a government selling its ownership stake in a company or industry. In the video, disinvestment is discussed as a part of the privatization process under the New Economic Policy, where the government reduced its stakes in public sector enterprises, leading to increased private sector participation.

💡Outsourcing

Outsourcing is the practice of hiring people from other countries to perform work for a company. The video mentions outsourcing as a result of globalization, where companies from developed countries, such as the US, opened call centers in India to take advantage of lower costs, providing employment opportunities in India.

💡World Trade Organization (WTO)

The World Trade Organization is an international body that regulates trade between nations. The video discusses the role of the WTO in administering global trade rules and promoting international trade. India, as a member of the WTO, plays a role in shaping global trade policies, although some scholars argue that the benefits for developing countries like India are limited.

Highlights

India adopted a mixed economy from 1950 to 1990 with policies that some scholars argue limited growth and development.

Despite limitations, there was significant development in food security and industrial diversification compared to the time of independence.

The New Economic Policy of 1991 was introduced in response to a severe economic crisis in India.

The economic crisis of the 1980s was characterized by mismanagement and a growing deficit due to high government expenditure and low income.

Government funds primarily came from taxes and public sector enterprises, which were insufficient to cover the growing deficit.

Wars with China and Pakistan contributed to increased defense spending and depletion of foreign exchange reserves.

The concept of foreign exchange reserves is explained, highlighting their importance for international trade.

India's foreign exchange reserves were critically low, leading to a loan from the World Bank and IMF under certain conditions.

The loan conditions required India to open its economy, reduce government control, and ease international trade restrictions.

The new economic policy focused on creating a competitive environment and removing barriers to industry growth.

Policies were divided into stabilization measures for short-term economic stability and structural reforms for long-term efficiency.

Liberalization involved removing restrictions on the private sector and deregulating the industrial sector.

Financial sector reforms aimed to make RBI a facilitator rather than a strict regulator, allowing more autonomy for banks.

Tax reforms included reducing direct and indirect tax rates to encourage compliance and increase government revenue.

Foreign exchange reforms devalued the Indian rupee to promote exports and allowed market forces to determine the exchange rate.

Trade and investment policy reforms reduced import restrictions and taxes to increase competition and efficiency in local industries.

Privatization involved converting government companies into private ones to modernize and improve efficiency.

Globalization and its effects, including outsourcing, are discussed, with India benefiting from access to global markets.

India's role in the WTO and the debate over its benefits and drawbacks for developing countries are examined.

The results of the reforms over three decades show increased GDP growth, foreign investment, and foreign exchange reserves.

Critiques of the reforms highlight the lack of sufficient job creation, negative impacts on agriculture, and increased economic disparity.

The conclusion acknowledges both the positive and negative outcomes of globalization policies in India.

Transcripts

In the last chapter, we

read the development from 1950 to 1990, in which we saw

that India adopted a mixed economy.

Some scholars say that due to the policies

brought during that time, growth and development did not happen as much as it

should have happened. And some of the same scholars say that

if compared with the condition of India at the time of independence,

there was a lot of development in between.

Food security was ensured and

industries also diversified.

In this chapter, we

will understand the New Economic Policy

of 1991 . If you haven't seen the previous videos then

there is a link to the playlist in the description, you can watch it from there.

In 1991, there was a huge economic crisis in India.

After which finally the government

had to bring a new economic policy.

First understand the background of the economy crisis.

It can be said that the government

could not manage the Indian economy properly in the 1980s and

this crisis originated from there.

We know that the government needs funds

to implement different policies

and for general administration . And these funds come,

for example, from taxes and from public sector enterprises,

that is, from the companies that are under the government.

When the expenditure of the government is more than the income,

then it is called deficit.

To meet these deficit, the government takes loans

either from the bank or from the people of the country or

from any international financial institutions. So during that time there were many expenses of the government

but that much income was not being generated.

To cure unemployment, poverty, population,

the government was running

many development policies.

He could not even be stopped because that too was necessary.

That much revenue was not being generated

from taxes and public sector enterprises

. Apart from this, wars with China in 1962, with Pakistan in 1965,

again with Pakistan in 1971. Because of all these wars,

a lot of money was being spent in the defense sector as well.

Foreign exchange reserves, which we

had maintained by borrowing from other countries and international financial institutions

, also

started being used for consumption purpose.

Neither the government was able to reduce these expenses

nor was paying special attention to increase exports.

Now first

let us understand the concept of foreign exchange reserve.

Central Bank of every country means RBI in the case of India

, such currency which

is easily acceptable in the global market means any country

should be ready to trade in use currency.

Like US dollar, japanese yen, euro,

all these currencies are kept with them.

It is used when we import something,

then in its payment. And how do these currencies come to us

? So by exporting more and more goods and services,

now we come back to the situation of 1980s.

Understand the situation, the expenses of the government were huge,

the income was not getting anything.

The government was not able to pay even the interest on

the loan taken from outside .

Petrol or other important items which

were not available in India also

had to be imported. He also needs money.

Export was nothing special that would help.

The result was that the foreign exchange reserves were reduced so much

that we could import only for two more weeks,

in such a situation no country or international funder

was even ready to give loan to India.

In the end, India

approached International Bank for reconstruction development, which means World Bank and International

Monetary Fund and

took a loan of 7 billion dollars from them.

The loan was given on the condition that India

will open its economy, which means it will remove the restrictions on the private sector

, reduce the role of the government,

and

also remove the restrictions on international trade like height tariff and fix quota.

Accepted Indian conditions and announced new economic policy.

In which the focus was to

create a competitive environment in the economy and

remove the barriers in the growth of industries.

These policies were divided into two groups.

Stabilization measures and Structural reform measures.

Stabilization measures were short term changes. By which

Let the situation become a little stable. Like controlling inflation,

and correcting whatever was wrong

with the balance of payment .

Countries maintain records of all their exports and imports,

that is called balance of payment.

On the other hand, structural reform

focused on long term changes, such as

increasing the efficiency of the economy, developing a competitive environment. We study

all the structural reforms in three categories.

liberalisation, privatization and globalisation.

Liberalization simply means

removing or reducing restrictions.

As we saw in the last chapter that

there were many restrictions on the private sector. For example, to open industries,

they had to take license from the government. So

in the Liberalization policy, these restrictions were removed and the economy was

opened to all.

Now let's see what

changes were made in some important areas.

Deregulation of industrial sector. Earlier, if any entrepreneur

had to open or close a firm

or decide how much goods to produce,

permission had to be taken from the government for all this.

But now except some product categories, such as alcohol, cigarette,

medicine, hazardous chemicals,

this permission system has been removed from all the rest.

Earlier there were many such industries which only the government

could open, not the private sector.

Now only defense equipment, atomic energy generation and

railway transport related industries

have been kept reserved for the government, rest

of the private sector can also come.

Earlier there were some such goods which

were reserved only for small scale industries .

Meaning only he can make it. This too was removed after the reform.

The government had control over fixing the price of goods

. But now most of the industries

have been given permission to fix the price according to the market.

Now because there will be many companies and

there will be competition among all, then the price will automatically be correct.

Next, what reform happened in the financial sector? Financial

institutions like banks, stock exchange

come in the financial sector

. So in India, RBI i.e.

Reserve Bank of India regulates

all these . For example, how much money can a bank keep with itself?

What will be the interest rate?

Or how much loan can the bank give to which sector?

So the main focus of the finance sector reform was to

make RBI a facilitator from a regulator, meaning the finance sector

would be allowed to take some decisions on its own

without consulting RBI

. As long as the bank

is working in the interest of the account holder and the nation, RBI will not interfere unnecessarily.

Due to Reform many private sector banks were established,

which was very difficult earlier.

With the opening of private banks, government banks also

started working well because the competition increased for them too.

On fulfilling certain conditions, banks were

also given permission to open new branches without asking RBI.

Foreign institutional investors, meaning

companies from outside India,

were allowed to invest in the Indian financial market.

The advantage of this was that more and more money

came into the Indian economy and it

became easier for banks or companies to raise capital, that is, to take loans.

Reforms were also done in taxes. Taxes are of two types.

Direct taxes and indirect taxes.

Direct taxes are those that we

pay directly to the government.

Like income tax, which we pay tax on our income

or corporation tax, which companies pay tax on their profit.

From 1991, the rate of these taxes was also reduced.

Because it is believed that due to high income tax,

people evade tax and if the tax rate is moderate

then people will pay tax and the government's revenue will increase.

The second tax is indirect taxes, which

are imposed on any goods or services.

We do not pay this directly to the government.

For example, when we buy any goods or services then

we pay this tax and the government

collects tax from the seller of those goods or services.

Its rate was also reduced and the process was simplified.

Like in 2016, the government brought

GST i.e. goods and services tax , which

was based on One nation, One tax and One market by removing different taxes.

Reform was also done in foreign exchange.

We had seen that our balance of payment was not correct.

Means there was a lot of import but there was no export.

Due to which the foreign exchange reserve

had also reduced a lot. So to promote exports,

the Indian rupee was devalued.

Means the value has been reduced.

Let's understand this with an example.

Suppose 70 Indian rupees is equal to 1 US dollar,

then if any other country wants our goods worth 70 rupees,

then it will have to pay 1 dollar. And if

the value of our currency decreases i.e. 1 US dollar equal to 70

to 80 then they will have to pay less than 1 dollar

for the same 70 rupees product. And

when they find the trade cheap, they will demand more and more,

which will increase our exports.

That's why currency was devalued

to increase exports .

Earlier this exchange rate used to be fixed by the government, but

after the reform, it

started being decided according to the market i.e. demand and supply.

Reforms were also given in trade and investment policy. Like

earlier there were lot of restrictions on imports, like tax was very high,

quantity was fixed that cannot import more than this.

All these were gradually removed so that

the competition of local industries of India increases and they

focus on their efficiency. And adopt modern technology.

Hazardous and environmentally sensitive industries, for

example, petroleum, except these,

the system of import licensing was removed.

The tax that was imposed on exports was also

removed so that exports are encouraged and

Indian products compete in the international market as well.

Next is privatization.

Its simple means is

to convert government companies into private companies.

The government did this in two ways.

Firstly, the government should sell the entire company and secondly

by transferring the ownership. The one who has

more than 50% stake in a company

is the owner. Means if government has 70% stake in a company

and government sells 30% stake, then now 40% left with government and 60% private. So the ownership

was transferred and that company became private.

When the government reduces its stake by selling it,

it is called disinvestment. If the government

sold 5% stake, then it would be called disinvestment of 5%.

The purpose of privatization was that companies

could be modernized and work in an efficient manner.

Next is globalization.

Globalization means the

integration of the economy or culture of one country with the economy or culture of the whole world.

For example, today every country exports and imports, so all

are dependent on each other. It means that what is going on in some far away country,

its effect also falls on our country.

Who will win the election in America

also has an impact on the politics of India.

So globalization eliminates boundaries

and creates a borderless world.

Outsourcing is an important result of globalization. In this, companies

hire people from other countries for their regular service

. This is called outsourcing. For example,

if there is a US company, it has to open a call center for its customer

, then it will open it in India because here it

will cost less in comparison to its country.

With this India will get employment and

their work will be done cheaply.

There can be other such works like

banking services, music recording, video editing.

Today outsourcing has become even easier due to

modern technology and fast mode of communication.

India also has many such companies

which are present in different countries.

For example, Tata Steel operates in 26 countries

and sells in 50 countries. And

is one of the top 10 steel companies in the world.

WTO, World Trade Organization

administers the rules and regulations in these global trade

. The WTO was created in 1995 by replacing

the General Agreement on Trade and Tariff, GATT, which was created in 1948.

Its job is to promote international trade,

to give access to the international market to its member countries,

to ensure that the world's resources are used properly

and to make such trading rules so that

no one can act arbitrarily.

India is also an important member of WTO and

plays an important role in making global rules and promoting the

interest of developing countries

. But some scholars say that India

is a member of WTO, it is of no special use.

Because most of the international trade

is the beach of developed countries.

Developing countries like India were forced

to open their market a little

and give market access to developed countries.

But in return they were

not given access to the market of developed countries.

All these reforms were brought in 1991.

So now let us see

what has been the result of these reforms in these three decades.

Look at this table. GDP

growth percentage has been given in this.

Overall GDP grew very fast

in the first two decades after the reform

. The growth rate between 1980 and 1991 was 5.6%.

Which increased to 8.2% between 2007-12.

But if we look at the agriculture sector during this period,

then the growth rate has decreased.

In 2012-13 the growth rate was only 1.5% and

in 2014-15 the growth rate went negative.

In the industrial sector too, the growth rate has been going up and down.

But continuous growth rate has been seen

in the service sector . This means that

the service sector has contributed a lot in the overall GDP growth

. Apart from this, due to the opening of the economy, foreign

investment also increased very rapidly.

Increased from 100 Million US Dollars in 1991

to 30 Billion US Dollars in 2017-18.

And the foreign exchange reserve increased from 6 Billion US Dollar to

413 Billion US Dollar in 2018-19.

Talking about now, it

is around 600 Billion US dollars.

From 1991, India

was seen as a successful exporter of autopart, IT software, textile, pharmaceutical goods

.

On the other hand, the reform was criticized a lot

that it

does not address the basic problems related to employment, agriculture, industry and infrastructure development.

Scholars say that even though the GDP growth rate

increased significantly during the reform period, that growth

did not generate sufficient employment in the country.

There was not much benefit of the reform in the agriculture sector.

In this we can see that the growth

rate was continuously decreasing.

The reason for this was that

not much money was spent on

irrigation, power supply,

roads, markets, research and development . Apart from this,

the cost of production for the farmers has increased due to the removal of fertilizers and subsidies, due to which

the small farmers were greatly affected.

Restrictions on import were also removed due to which

the international competition for Indian farmers also increased a lot.

Due to export oriented policies, farmers

started producing things which are in demand in the export instead of the things

which are in demand in the Indian market. Means,

instead of food grains, they started producing cash crops,

so that the profit is more. But due to this the availability of food grains

started decreasing and the price started rising.

With the removal of restrictions on import, the competition of domestic industries

also increased a lot.

Imported goods were very cheap, due to which

the demand for domestic products decreased,

which had a negative impact on the growth of industries.

Developing countries like India

removed the restriction on these imports but developed countries

like USA. Quota restrictions on imports from countries like India, China were not removed. Meaning, they

can come here and sell their product without any

restrictions, but how much we will sell there is a quantity fix.

Every year the government fixes the

target of disinvestment of public sector enterprises

, that means it fixes how much part of the public sector will be sold to the private sector.

Like in 2017-18 there was a target of 1 lakh crore assets

and the government sold assets worth 1 lakh 57 crores.

Critics say that the problem here is

Due to the lack of money, the government

sells the assets only at a low price.

Due to which the government has suffered a lot.

Even the money that comes from disinvestment, the government

uses it in some other scheme or policy instead of the development

of public sector enterprises. Taxes

were reduced during the Reform period so that people do not evade taxes

and the revenue of the government increases. But this did not happen.

When the tariff was removed, the government

's revenue from that side also stopped.

Government was also giving tax exemption to foreign investors,

so that they invest more and more in the Indian economy.

So overall, the tax revenue of the government decreased,

due to which the government's expenditure on public welfare

also decreased.

So the conclusion is that Globalization policies have had both positive and negative results.

Some scholars say that the economy of developing countries has benefited overall from globalization.

High technology came and got access to the global market.

And on the other hand, some scholars say

that globalization is the strategy of developed countries so that it

can expand its market to other countries.

Market driven globalization has increased the economic disparity

between countries and between people .

Which means the rich are getting richer and the poor are getting poorer.