Documente Academic
Documente Profesional
Documente Cultură
TYPE
EXAMPLES
Trade Liberalisation
Promotion of FDI
DEFINITION
A foreign direct
investment (FDI) is a
controlling ownership in a
business enterprise in one
country by an entity based in
another country.
IMPACTS
APPLICATION
With the help of a selectively
liberal import strategy, Korea has
Trade liberalisation allows countries to specialise been able to develop a highly
in producing the goods and services where they competitive manufacturing sector
have a comparative advantage (produce at
that offers its own brand-name
lowest opportunity cost). This enables a net gain manufactures of increasing
in economic welfare.
sophistication, ranging from cars
to TV and now high technology
goods.
Lower prices. The removal of tariff barriers can
lead to lower prices for consumers. E.g. removing
food tariffs in West would help reduce the global
price of agricultural commodities. This would be
particularly a benefit for countries who are
importers of food.
EVLUATION
Promotion of FDI
TYPE
EXAMPLES
Removal of Governement
TradeSubsidies
Liberalisation
MARKET
ORIENTATED
A foreign direct
investment (FDI) is a
controlling ownership in a
business enterprise in one
MEASURES
TO PROMOTE GROWTH AND DEVELOPMENT
country by an entity based
in
DEFINITION
IMPACTS
another
country.
Recipients of FDI often gain employee training in
the course of operating the new businesses,
which contributes to human capital development
in the host country.
Profits generated by FDI contribute to corporate
tax revenues in the host country.
Subsidy savings, instead of supporting
consumption, can be directed to productive
spending such as education, R&D, healthcare and
The removal or reduction of
public transportation
restrictions or barriers on the
Removal of a sum of money Enhancement of the efficiency of the economy.
free exchange of goods
granted by the state or a
between nations. This includes As we move closer to market prices, supply and
public body to help an
demand becomes more market-responsive and
the removal or reduction of
industry or business keep the are driven by price signals. Non-subsidised prices
both tariff (duties and
price of a commodity or
for goods and services will force resources to be
surcharges) and non-tariff
service low.
obstacles (like licensing rules, allocated with minimum wastage.
quotas and other
More resilient economy, strengthened by lower
requirements).
fiscal deficit and government debt to achienve
the resources to engage in counter-cyclical
spending
APPLICATION
Although Latin America and the
Caribbean saw overall positive
growth in FDI inflows, it was
mostly due to Central American
growth
EVLUATION
Footloose Capitalism - They have the
power to move production from
country to country to maximise profits.
In the short run, it can lead to
unemployment in industries that are
not
exposed
foreign
In the
It
can
lead toto
short
termbarriers.
cost-push
long
run,and
jobsreduction
can be found
but newer
inflation
in growth
rates
jobs would be paid less than the old
ones
EXAMPLES
MARKET
ORIENTATED
Trade Liberalisation
Privatisation
DEFINITION
IMPACTS
APPLICATION
EVLUATION
EXAMPLES
DEFINITION
A country's exchange
The removal or reduction of
rateregime where its currency
restrictions or barriers on the
is set by the foreignfree exchange of goods
exchange market through
between nations. This includes
supply and demand for that
the removal or reduction of
Liberalisation
FreelyTrade
Floating
Exchange Rate particular currency relative to
both tariff (duties and
other currencies.
surcharges) and non-tariff
Thus, floating exchange
obstacles (like licensing rules,
rates change freely and are
quotas and other
determined by trading in the
requirements).
forex market.
IMPACTS
APPLICATION
EVLUATION
Floating exchange rates may aggravate
existing problems in the economy. If the
country is already experiencing
economic problems such as higher
Floating exchange rates are also seen as an
inflation. For example, if the country
automatic stabiliser. In the event of either a
In the short
it can
lead to
suffers
fromrun,
higher
inflation,
negative demand or supply side shock affecting
unemployment
in industries
thatdrive
are
depreciation of its
currency may
an economy, the exchange rate will fall as
not inflation
exposed rate
to foreign
the
higherbarriers.
becauseInofthe
currency traders sell the currency, leading to a
long
run, jobs
can be
but newer
increased
demand
forfound
its goods;
fall in export prices and an automatic increase in
jobs
would
be
paid
less
than
theaccount
old
however, the countrys current
competitiveness
onesalso worsen because of more
may
Switzerland would have had to
expensive imports. unemployment,
spend more than $100 billion this
floating exchange rates may make the
month alone if it had continued
situation worse.
efforts to hold down the value of
The fact that a currency changes in
its currency. SNB thinks the franc
value from day to day introduces
is no longer as overvalued as it
instability or uncertainty into trade.
was in 2011, so the cap can go.
Sellers may be unsure of how much
In a floating exchange rate regime, the
money they will receive when they sell
macroeconomic fundamentals of countries affect
abroad or what their price actually is
the exchange rate in international markets,
abroad. Of course the rate changing will
which, in turn, affect portfolio flows between
affect price and thus sales. In a similar
countries. Therefore, floating exchange rate
way importers never know how much it
regimes enhance market efficiency
is going to cost them to import a given
amount of foreign goods. This
uncertainty can be reduced by hedging
the foreign exchange risk on the
forward market.
EXAMPLES
Microfinance Schemes
Trade Liberalisation
DEFINITION
IMPACTS
APPLICATION
The Grameen Bank, launched in
1976 by Mohammed Yunus in
Bangladesh, pioneered the shift in
focus to group loans. Today, the
Grameen Bank consists of more
than 2.4 million clients. The
scheme has also made a
significant contribution to the
economy as 48% of the poor
families which have obtained
credits have managed to
overcome the poverty line
EVLUATION
Microfinance programs in
Uzbekistan have already drawn
Access to credit does not mean that
more than 70, 000 clients, with
investment from th poor will become
nearly 200, 000 persons employed ruitful or produce the desired results
in supplementary activities.
Theodore Schultz: The social rate
of return on investment in human
The return on investment can only be
capital in the US economy was
seen in the long run and can fail due to
larger than that based on physical
brain drain
capital such as new plant and
machinery.
EXAMPLES
DEFINITION
IMPACTS
To protect sunrise industries (new industries).
Enable industries to have chance to develop,
grow and become globally competitive
Protectionism
Trade Liberalisation
GOVERNMENTLED
APPLICATION
In Malaysia, imported cars are
imposed tariffs. These taxes cause
a foreign car to cost almost three
times or 300% more than the
original price.very high duties and
EVLUATION
GOVERNMENTLED
EXAMPLES
Trade Liberalisation
Infrastructure Development
DEFINITION
IMPACTS
Infrastructure investments can similarly
accelerate economic development in less
developed nations and emerging markets.
Nations that invest in infrastructure are better
positioned to attract direct foreign investment,
stimulate commerce and support local
businesses. Their citizens are more likely to enjoy
better health care, sanitation and other markings
of well-being
Support trade and transport facilitation, such as
through efforts to reduce border crossing
problems including rationalisation of
procedures and elimination of illegal or semilegal checkpoints on roads and increase the
efficiency of multi-country operations in other
network industries, such as railways and
electricity.
Removing bottlenecks in the economy which
hurt poor people by impeding asset
accumulation, lowering asset values, imposing
high transaction costs and creating market
failures. Eliminating these bottlenecks allows the
poor to contribute to growth directly through the
employment and income opportunities created
by the construction, maintenance and delivery of
infrastructure services, and indirectly through
better services
Generating distributional effects on growth and
poverty reduction through poor peoples
increased participation in the growth process
for example, by increasing their access to factor
and product markets, reducing risk and
vulnerability, enhancing asset mobilisation and
use, and promoting their empowerment
APPLICATION
China, South Korea and Taiwan
owe their economic successes in
part to infrastructure investments.
India plans $1 trillion in
investments over the next five
years to modernize its economy.
EVLUATION
Infrastructure development
certainly helped export-led
economic growth in China. The
Chinese government responded to
the 2008 crises with a large
economic stimulus package
designed to boost domestic
demmand by investing in
infrastructure and public services
to help sustain the economy.
EXAMPLES
DEFINITION
IMPACTS
APPLICATION
It provides support for business and commercial
associations composed by companies from the
same core business. With those associations it is
possible to contact companies facing similar
Malaysian Carmaker, Proton
challenges or problems and find common
working together with a Japanese
solutions that would be much more difficult to
Automobile TNC, Mitsubishi.
A business arrangement in be solved without information sharing. The
which two or more parties programme creates and develops actions to
Promoting Joint Ventures with
agree to pool their resources strengthen SMEs in a competitive market
TNC
for theor
purpose
of of
The removal
reduction
environment
accomplishing
a specific
The programme creates and
restrictions
or barriers
ontask.
the
Major benefits of linkages with TNCs: economies develops actions to strengthen
free exchange of goods
SMEs in a competitive market
between nations. This includes of scale, new markets
environment, and it works in more
the removal or reduction of
Trade Liberalisation
Lower costs (cheaper local resources and labour, than 800 municipalities in all
both tariff (duties and
replacing imported material by locally produced Brazilian States with
surcharges) and non-tariff
inputs) and increase in flexibility
approximately 40,000
obstacles (like licensing rules,
quotas and other
requirements).
EVLUATION
EXAMPLES
DEFINITION
IMPACTS
Certainly the biggest advantage of
industrialization is that it eases the daily
responsibilities and tasks of people by placing
most of the bulk of tasks on technology and
other resources
Trade Liberalisation
Industrialisation
APPLICATION
EVLUATION
OTHER
EXAMPLES
DEFINITION
OTHER
IMPACTS
Higher employment due to labor intensive, few
administrative positions and little upward
mobility
Development of Tourism
Trade Liberalisation
Development of Primary
Product Industry
APPLICATION
EVLUATION
Cultural destruction due to
Travel receipts account for over a modernization (world mono-culture),
third of all invisible exports for
freezes culture as performers, loss of
Third World countries.
language, religion, rituals and material
culture.
In the local
shortinhabitants
run, it can lead
to
Make
feel inferior
unemployment
in industries
that
arein
they cannot afford
lifestyle on
offer
not hotels
exposed
foreign
barriers.
In the
the
to to
First
Worlds
tourists
Growth in tourism increasing since 1970
long
run, impact
jobs canonbeenvironment
found but newer
Negative
local
jobs would
paid lessbythan
the old
shore
line isbe
damaged
building
of
ones
hotels