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.