Question

Distinguish between the following.

Privatization and Globalization.

Answer 1

points		Privatisation	Globalization
(1) Meaning		It refers to reduce the involvement of state or public sectors by involving of the private sector in economic activities.	It refers to the integration of the national economy and societies through cross country flows of information, ideas technologies, goods, services capital, finance, and people.
(2) Aim		It aims at promoting efficiency, increase productivity, profitability.	It aims at promoting world trade and economic growth by integrating technologies, goods, services, people, etc.
(3) Need		To achieve quick and logical business decisions aimed at the commercial success of an organisation.	To overcome the problem of declining domestic demand and to ensure free trade.
(4) Measures adopted		Reduction in a number of industries reserved for the public sector, disinvestment of shares, improvement in performance through MOU.	Allowing Foreign Direct Investment, approving foreign technology, amendment of patent laws, etc.
(5) Benefits to host company		It results in profitability, production of superior quality products and services, self-motivation, etc.	It results is the expansion of investment. It promotes foreign trade and brings foreign exchange
(6) Benefits to consumers/ traders		The entry of the private sector results in competition thereby providing high-quality goods and services at lower prices.	Consumers get a variety of goods as an option to be purchased foreign technology is adopted by traders thereby increasing the growth of production.
(7) Positive effect		Improved performance, high-quality goods, and services in the market. Timely prompt decisions with more efficiency.	It results in an increase in foreign trade, the inflow of foreign trade, the inflow of foreign technology, and capital, which increases employment opportunities, business growth, etc.
(8) Adverse effect		Growth of monopoly; inequality of income, lack of social responsibility, etc. will hamper the social order of the economy.	It leads to exploitation of the home market by foreign companies. Capital intensive techniques lead to a reduction in job opportunities.
(9) Interrelationship		Privatisation is a part of the process of globalization.	Globalisation includes liberalisation and privatisation.