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Chapter 2 – Global Transitions

Chapter 2 – Global Transitions. Lesson 3. Problems of Transition. Dominant Economic Trend of our lifetime Transition of communist and socialist economic systems to capitalism Privatization Necessary for conversion of state-owned property to private ownership.

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Chapter 2 – Global Transitions

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  1. Chapter 2 – Global Transitions Lesson 3

  2. Problems of Transition • Dominant Economic Trend of our lifetime • Transition of communist and socialist economic systems to capitalism • Privatization • Necessary for conversion of state-owned property to private ownership. • Ruling party in communist or socialist economy • Fear the loss of political power during a transition to capitalism • Citizens • Learn to make their own decisions, take initiative, interpret prices, and fend for themselves in free markets. • Many countries underestimate the costs of converting to capitalism.

  3. Countries and Regions in Transition • Decades-long transition to capitalism • Russia • Currently market-based economy • Exceptions: Government-controlled energy, natural resource, and defense-related industries. • After the Soviet Union collapsed • Many Eastern European countries transitioned to capitalism • Poland, Hungary, the Czech Republic, and Slovakia. • China • Influenced by successful market economies in Asia • Undergoing some privatization and other capitalistic endeavors. • Latin America • Socialism still exists in Venezuela and Argentina • Chile has made the transition to capitalism.

  4. Other Faces of Capitalism • Japanese government • Much more involved in the day-to-day activities of private sector. • South Korea • Opened its markets to world trade • Progressed from one of the poorest countries in Asia in the mid-1950s to a leading producer of electronics and automobiles today. • Singapore • Focused on a few select industries • Pharmaceuticals, medical technology, and financial and high-tech industries. • Taiwan • Depends on economic planning • Early economic power in Asia • Centralized planning may hamper future economic growth.

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