Economic liberalization

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Economic liberalization is a broad term that usually refers to less government regulations and restrictions in the economy in exchange for greater participation of private entities; the doctrine is associated with neoliberalism. The arguments for economic liberalization include greater efficiency and effectiveness that would translate to a "bigger pie" for everybody.

Most first world countries, in order to remain globally competitive, have pursued the path of economic liberalization: partial or full privatization of government institutions and assets, greater labor-market flexibility, lower tax rates for businesses, lesser restrictions on both domestic and foreign capital, open markets, etc. British Prime Minister Tony Blair wrote that: "Success will go to those companies and countries which are swift to adapt, slow to complain, open and willing to change. The task of modern governments is to ensure that our countries can rise to this challenge."[1]

In developing countries, economic liberalization refers more to liberalization or further "opening up" of their respective economies to foreign capital and investments. Three of the fastest growing developing economies today; China, Brazil and India, have achieved rapid economic growth in the past several years or decades after they have "liberalized" their economies to foreign capital.[2] Many countries nowadays, particularly those in the third world, arguably have no choice but to also "liberalize" their economies in order to remain competitive in attracting and retaining both their domestic and foreign investments. In the Philippines for example, the contentious proposals[3] for Charter Change include amending the economically restrictive provisions of their 1987 constitution.[4]

The total opposite of a liberalized economy would be North Korea's economy with their closed and "self sufficient" economic system; thou North Korea receives hundreds of millions of dollars worth of aid from other countries in exchange for dialogue for peace and restrictions in their nuclear program. As well, many oil rich countries such as Saudi Arabia and United Arab Emirates sees no need to further open up their economies to foreign capital and investments since their oil reserves provide them already with huge export earnings.