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External's Forecasted paper 6: 206-IBM (50M) Section 1: (25M) Attempt any 2/3: (12.5M each) 1.

Explain Hofstead's theory on cultural diversities. State its limitations n compare it with GLOBE mode? Explain country risk analysis for Pakistan? 2. What r the measures 2 decide the degree of globalization of a company? Where will u put Tata Motors on a scale of 1-10 on basis of those measures? Gv reason for ur decision? 3. Attempt any 2/3: a.Boderless world concept b.Intenational market entry strategies c.Competitive advantage to the nations Section 2: (25M) Attemptany 2/3: (10M each) 1. Discuss with suitable eg, the major obstacles for India's Global Competitiveness? OR What areas r required 2 be focused upon, if india is to emerge globally competitive? 2. Explain the structure of WTO in detail? OR Critically examine the dispute settlement mechanism of WTO? 3. Explain the mechanism of raising equity finance through issue of ADR's. What r the types of ADR? What is two way fungibility? OR Explain Factoring, Forfeiting n Post Shipment Finance? 4. Attempt any 1/2: (5M each) a.Project life cycle of IBRD b.IMF quotas n SDR ATB!!!

Boderless world concept

Cant we dream of a world where there will be no border. Even though now a days it is (borderless world) possible theoritically through computer, internet etc. But why not possible practically? fully?

Borders, boundaries are mankind's creations. Like the himalayas were created because of a crush between the floating subcontinental regions and chinese regions. But then the boundaries are created by us. The world is for all of us to live, to enjoy, to know. How much time do we get to see everything? Why poverty is rising? Because there are borders there are wars, international crimes. We even don't know the whole mathematics of the creation, like the world even can be destroyed within a moment. Energies are divided within the boundaries. knowledge and resource also. If all the energies can be utilised in an uniform way, if all of the people of this world can pray with equal voice, if all the people can talk about same agenda then a tremendous flow of mental energy will be created, from where great insights will follow. We are not independent, we are not free, we cannot share each others knowledge to the great extent. The so called globalization could be a quest for the borderless world, but even here the concept of self enrichment through materialism has made the dream only a linguistic phenomenon. The ultimate target of our life is to earn knowledge. Knowledge is the thing which can enlighten our innerselves and produce insights. To know more a borderless world is needed. Extremely needed. All of the citizen of this world has some obligations to make this world a better place to live, but not only this is the ultimate obligation. The ultimate obligation is to know more. If we can only work for the utlimate obligation then miracles will happen. Lets do our part of the obligation. In that way soon our world will be borderless.

The Competitive Advantage of Nations

National prosperity is created, not inherited. It does not grow out of a countrys natural endowments, its labor pool, its interest rates, or its currencys value, as classical economics insists.

A nations competitiveness depends on the capacity of its industry to innovate and upgrade. Companies gain advantage against the worlds best competitors because of pressure and challenge. They benefit from having strong domestic rivals, aggressive home-based suppliers, and demanding local customers. In a world of increasingly global competition, nations have become more, not less, important. As the basis of competition has shifted more and more to the creation and assimilation of knowledge, the role of the nation has grown. Competitive advantage is created and sustained through a highly localized process. Differences in national values, culture, economic structures, institutions, and histories all contribute to competitive success. There are striking differences in the patterns of competitiveness in every country; no nation can or will be competitive in every or even most industries. Ultimately, nations succeed in particular industries because their home environment is the most forward-looking, dynamic, and challenging. These conclusions, the product of a four-year study of the patterns of competitive success in ten leading trading nations, contradict the conventional wisdom that guides the thinking of many companies and national governmentsand that is pervasive today in the United States. (For more about the study, see the insert Patterns of National Competitive Success.) According to prevailing thinking, labor costs, interest rates, exchange rates, and economies of scale are the most potent determinants of competitiveness. In companies, the words of the day are merger, alliance, strategic partnerships, collaboration, and supranational globalization. Managers are pressing for more government support for particular industries. Among governments, there is a growing tendency to experiment with various policies intended to promote national competitivenessfrom efforts to manage exchange rates to new measures to manage trade to policies to relax antitrustwhich usually end up only under mining it. (See the insert What Is National Competitiveness?) Patterns of National Competitive Success by: Michael E. Porter What Is National Competitiveness? by: Michael E. Porter These approaches, now much in favor in both companies and governments, are flawed. They fundamentally misperceive the true sources of competitive advantage. Pursuing them, with all their short-term appeal, will virtually guarantee that the United Statesor any other advanced nationnever achieves real and sustainable competitive advantage. We need a new perspective and new toolsan approach to competitiveness that grows directly out of an analysis of internationally successful industries, without regard for traditional ideology or current intellectual fashion. We need to know, very simply, what works and why. Then we need to apply it.

Section 2 The structure of the WTO The structure of the WTO is dominated by its highest authority, the Ministerial Conference, composed of representatives of all WTO members, which is required to meet at least every two years and which can take decisions on all matters under any of the multilateral trade agreements. The day-to-day work of the WTO, however, falls to a number of subsidiary bodies; principally the General Council, also composed of all WTO members, which is required to report to the

Ministerial Conference. As well as conducting its regular work on behalf of the Ministerial Conference, the General Council convenes in two particular forms - as the Dispute Settlement Body, to oversee the dispute settlement procedures and as the Trade Policy Review Body to conduct regular reviews of the trade policies of individual WTO members. The General Council delegates responsibility to three other major bodies - namely the Councils for Trade in Goods, Trade in Services and Trade-Related Aspects of Intellectual Property. The Council for Goods oversees the implementation and functioning of all the agreements (Annex 1A of the WTO Agreement) covering trade in goods, though many such agreements have their own specific overseeing bodies. The latter two Councils have responsibility for their respective WTO agreements (Annexes 1B and 1C) and may establish their own subsidiary bodies as necessary. Three other bodies are established by the Ministerial Conference and report to the General Council. The Committee on Trade and Development is concerned with issues relating to the developing countries and, especially, to the "least-developed" among them. The Committee on Balance of Payments is responsible for consultations between WTO members and countries which take trade-restrictive measures, under Articles XII and XVIII of GATT, in order to cope with balance-of-payments difficulties. Finally, issues relating to WTO's financing and budget are dealt with by a Committee on Budget. Each of the four plurilateral agreements of the WTO - those on civil aircraft, government procurement, dairy products and bovine meat - establish their own management bodies which are required to report to the General Council. dispute settlement mechanism wto The dispute settlement mechanism of the General Agreement on Tariffs and Trade was based on Articles XXII and XXIII of GATT 1947. Article XXII instructed GATT member states to use consultation to settle their disputes, and if this was unsuccessful it empowered the whole membership as an organ to consult with the disputing parties in order to end the dispute. Article XXIII specified what constituted a dispute and how such matters should be raised. It went on to instruct the whole membership to respond to a dispute by investigating and making appropriate recommendations to the disputing parties, or by giving a ruling on the matter. Finally, it permitted the GATT member states to authorise retaliation in a dispute. Because of this very general weak basis as well as its emphasis on diplomacy, positive consensus and negotiation, GATTs dispute settlement system had some systematic shortcomings (see, for example, Jackson, 1998). Any party to a dispute could at any stage block the process. There were no deadlines for the settlement process, for example on how long consultations should last. The binding nature of the rulings could be disputed and their quality was often considered inadequate. Finally, eight of the GATTs nine Codes had their own system of dispute settlement. Gradually, in response to these problems, a more complex system emerged which can be regarded as professional and legalised (Petersmann, 1994). Its emergence was the main reason for GATTs relatively successful overall record of dispute settlement, despite its shortcomings.1

Prior to the Uruguay Round, the underlying discussion about how disputes should be settled was between the United States and the European Union (Shell, 1995: 339). The US inter alia, because of its interest in ensuring that all countries applied GATT rules supported a rule-based system, while the EU supported a diplomacy-based model. During the Uruguay Round, the idea of a formal system, which could also deal with disputes in new areas such as trade in services and intellectual property rights, was tabled by the US. In part because of some positive experience with cases it had initiated under the GATT and also because of its aim of limiting US unilateralism, the EU at this point abandoned its opposition to a legalised system (see, for example, Shell, 1995). Subsequently as in many other areas of the negotiations where the major trading countries were in agreement a formalised dispute settlement system became a realistic outcome (Croome, 1995). At the conclusion of the Uruguay Round, the DSM was officially established in 1995 with the declared objective of ensuring that WTO rules would be observed and applied. When drafting the Dispute Settlement Understanding (DSU), the countries active in the negotiations (the US, the EU, Canada, Mexico, Brazil, Jamaica and Japan) had two objectives in mind.2 The new system was to correct the GATT systems shortcomings and be stronger, which meant that it should have the ability to issue mandatory rulings and have its own organisational structure. All member countries supported this: the main players wanted a stronger and more binding system that could 1. According to Hudec et al. (1993) almost 88% of GATTs rulings were at least partially complied with. 2. Stoler (2004) has argued that the negotiators achieved what they wanted, although in some cases the consequences turned out differently from their expectations. African Countries and the WTOs Dispute Settlement Mechanism 27 The Author 2007. Journal compilation 2007 Overseas Development Institute. Development Policy Review 25 (1) deal with the increased range and complexity of WTO issues, while developing countries supported the system because it was rule-based and not power-based as during the GATT (Croome, 1995). This they understood to be in their interest, since fuller legalisation was supposed to entail a levelling of differences among WTO members and give them equal opportunities to use the system to defend their rights. Furthermore, the DSU included some provisions that referred to developing countries special needs. However, these Special and Differential Treatment (SDT) measures have turned out to be of very limited value to developing countries. After ten years experience with the system, many developing countries, and most comprehensively those in sub-Saharan Africa, are still bystanders.

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ADR Types and Advantages


American Depository Receipt is a depository receipt representing one or more shares of a foreign company that is traded publicly in U.S. markets. There are many two types of ADR, as unsponsored and sponsored ADR. 1. Unsponsored ADR This is ADR which involve no direct involvement of the foreign company (whose shares are involved). Custodian banks buy shares of the company, hold then, and issues ADRs through a brokerage firm. The ADR holder may not receive all the benefits associated with the shares. Unsponsored ADRs are traded usually over-thecounter. 2. Sponsored ADR This is ADR which involve direct involvement of foreign company. The company chooses a single depository bank and registers DRs with SEC. The ADR holder receives all share holder benefits. Sponsored ADRs are usually traded through major exchanges like NYSE and AMEX.

International Bank for Reconstruction and Development (IBRD) pro vides loans and development assistance to middle-income countries and creditworthy poorer countries. voting power is linked to members' capital subscriptions, which in turn are based on each country's relative economic strength. not a profit-maximizing organization but has earned a net income every year since 1948. established in 1945 181 member countries (shares allocated to each member reflect its quota in the IMF, i.e. the countrys relative economic strength in the world economy) Source of funds: paid-in capital, capital market borrowings, repayments on earlier loans, retained earnings.

A typical World Bank project goes through the following 5 project cycles 1. IDENTIFICATION 2. APPRAISAL 3. NEGOTIATIONS 4. BOARD APPROVAL 5. SUPERVISION IMF quotas
Money that a country which is a member of the International Monetary Fund (IMF) has to give the fund so that it can lend money to countries needing help.

SDR
Special drawing rights (SDRs) are supplementary foreign exchange reserve assets defined and maintained by the International Monetary Fund (IMF). Not a currency, SDRs instead represent a claim to currency held by IMF member countries for which they may be exchanged.[1] As they can only be exchanged for euros, Japanese yen, pounds sterling, or US dollars,[imf 1] SDRs may actually represent a potential claim on IMF member countries' nongold foreign exchange reserve assets, which are usually held in those currencies. While they may appear to have a far more important part to play, or, perhaps, an important future role, being the unit of account for the IMF has long been the main function of the SDR