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International Monetary Fund
Globalization refers to the increasing global relationships of culture, people and economic activities and even the technological relations which aids the globalization as well.
Aspects of globalization
Trade; Globalization of trade entails that human beings have greater access to a variety of goods and services across the international borders .for example, cars from Germany, software from India, clothing from China, and coffee from Colombia etc. Therefore a country which exports more primary commodities such as food and raw materials gain a lot compared to ones which export less.
Movement of people; Globalization has enabled people to move from one country to another to look for better paying jobs and better employment opportunities, making most countries borderless and movement non-restrictive as before. Due to this movement, people are able to gain different skills and knowledge from the foreign country and implement it in their home countries hence increase…… [Read More]
International Monetary Fund was created in 1945 with the purpose of facilitating trade, improving capital flows, controlling exchange rates and basically helping Europe reconstruct its economy after the devastation of the Second World War. However over the decades, the role expanded and changed considerably as IMF became a financial institution that advises countries on economic policies, acts like a development agency and also steps in during times of financial crisis to maintain and reestablish order. In this way IMF has been doing something which is not consistent with its original role as mandated by the Articles of Agreement of 1944.
With the end of the Bretton Woods era, IMF's role expanded considerably and it has now become the main economic regulations body of the United Nations. It plays an important in regulating world economies by offering members advice on the issues of monetary and fiscal significance. Though often seen in…… [Read More]
International Monetary Fund (IMF) serves as an important function that makes international trade less challenging. The IMF is a powerful international institution that works together with the World ank to provide support and guidance to nations in all stages of economic progress.
The IMF is responsible for managing the global financial system and supplying loans to its member states to help alleviate financial problems. Agreement for its creation came at the United Nations Monetary and Financial Conference in 1944 and the organization came into existence in 1946.
The IMF, along with the ank for International Settlements and the World ank, defines the monetary policy shared almost all by countries that pursue capitalism as an economic strategy. In order to gain access to IMF loans, ank for International Settlements agreements, and strategic World ank development loans, a country must agree to terms determined by all three organizations.
International trade is a…… [Read More]
In some countries, the effects of the SAP doctrine of privatization have proved devastating. Kline (38) also notes IMF's loans stipulating that countries who borrow money change certain practices, that albeit, may be aimed at improving conditions also foster concerns. Rather than having to assure a goal is achieved at a particular time, ethical decisions might best only call for steps that advance conditions for a desired goal to be attained. That practice, could eliminate any hint of extortion; real or imagine; at home or in international relations.
About the IMF." Retrieved 12 July 2006 at http://www.imf.org/external/about.htm,
The IMF at ork." Retrieved 12 July 2006 at http://www.imf.org/external/work.htm,2006.
International Monetary Fund." Retrieved 12 July 2006 at http://www.imf.org/,2006.
Kline, John M. Ethics for International Business: Decision Making in a Global Political
Economy. London: Routledge, 2005.
Thomas, Mark. "The International Monetary Fund's Very Ideology Runs Counter to Developing Nations' Needs: It…… [Read More]
These critics argue that the United States and Europe have been the principal financial support for the IMF for over fifty years and that, but for, such support the IMF would long ago ceased to function as a viable organization. Those supporting this view, however, also argue that the IMF has lost sight of its original goal and ventured into new areas that might be best left for others to address. Debates have repeatedly occurred in the halls of the U.S. Congress relative to the United States' continued financial support of the IMF. These debates center on the fact that the IMF has ceased to exist as an organization whose function was to finance temporary balance of payment problems and transcended into an organization whose principal function is to provide "microeconomic bailouts that restore the solvency of clearly insolvent financial institutions" (Calomiris, 1998).
In a similar vein, critics argue that…… [Read More]
Matter of Perspective
There is little doubt that the globalization debate is highly polarized between those who see it as a "good thing" for the majority of nations, and those who see it as just another means to exploit the poorest countries. The two articles "Globalisim's Discontents," written by Joseph Stiglitz, and "Globalization: Threat or Opportunity," authored by writers working for the IMF, or International Monetary Fund, are excellent examples of this polarity.
Joseph Stiglitz notes that the trend of globalization has "brought huge benefits to a few with few benefits to the many. ut in the case of a few countries, it has brought enormous benefit to the many." He then explains the main difference between those countries that are globalizing "successfully," and those that are not is their ability to:
substantially control the terms on which they engaged with the global economy. y contrast, the countries that…… [Read More]
WB, IMF & WTO
Neocolonialism according to the Free Dictionary (2011) is the application of a policy where a major power utilizes the political and economic power to continue its influence on the less developed nations. It also entails the control of politics of a country that in theory is sovereign and independent through the domination of its economy. It can as well be referred to as the exploitation of weaker nations by the stronger nations and using their resources to enrich and strengthen the stronger countries.
It is this exploitation that is perpetuated by the neocolonialism that makes the poor countries to continue being poor as the little resources that are available are taken away through various agreements that bind the poor countries to the powerful countries. There are aids that are brought into the poor countries bearing the fact that they cannot sustain themselves and in return, their…… [Read More]
The IMF currency reserve units are called Special Drawing ights (SDs); from 1974 to 1980 the value of SDs was based on the currencies of 16 leading trading nations. Since 1980 it has been reevaluated every five years and based on the relative international economic importance of the British pound sterling, the European Union euro (formerly the French franc and German mark), the Japanese yen, and the U.S. Dollar." (2010, p.1). All these roles make it one of the most important player in the global financial market.
Criticism in the wake of the current global financial crisis
The IMF has been criticized for its role through most of the major financial crises that have taken place in history. One such example is the Asian financial crisis of 1998 when the fund required the Asian countries to keep the interest rates at extremely high levels. Also, the IMF provided loans to…… [Read More]
International Monetary System and Exchange ate Policies
A report/essay: chapter 17, multinational companies. select topic research write: Multinational vs. domestic financial management exchange rates international trade international monetary system exchange rate policies trading foreign exchange european monetary union interest
rate parity/purchasing power parity international capital structures.
The international monetary system and exchange rate policies
International Monetary systems
These are a set of rules and that regulate how international trade and payments are handled. It facilitates the exchange of capital, goods and services among countries. However, this system does not have a physical presence but, it consists of interlacing rules and procedures and is influenced by the market of foreign exchange. An example of an international monetary system is the International monetary fund. These interlacing rules and procedures are referred to as exchange rate Policies.
Exchange rate policies
These are rules that officials of public finance from different nations have developed…… [Read More]
International Monetary System
In world trade, varied national currencies are swapped for each other by means of rules and procedures set by a system called the international monetary system. To delineate a general standard of value for the world's currencies, such a system is believed to be necessary.
The global monetary structure has always adhered to the organizational framework of the international discipline. In each stage of the financial capitalism there exists a corresponding monetary approach. The monetary structure during the postwar periods catered to the dominance of the United States. This was applied as a tool during the period to enforce the U.S. dominance over all its allies and the developing countries, irrespective of the socialist countries isolated themselves being unconnected from the influence of the financial and monetary disciplines of the global capitalism.
Gold standard was the first contemporary international monetary system. The gold standard contributed for the…… [Read More]
According to Chancellor Helmut chmidt the interest rates of the developed countries in the post1990 era were higher than they had ever been "at any time since Jesus Christ" (http://hdr.undp.org/external/HDR_papers/oc3b.htm). In 1983, in Latin America, whose devaluations were enormous, it was recorded that in one year "the effect on the individual private sector, which in [some] cases had been encouraged by the policies of the authorities to borrow, has been devastating...the amount needed in local currency to service external debt has increased three or four times" (Kuczynski,1983, p. 22). The situation in these countries is such: with the decrease of their currency value, more goods must be sold to pay back their debt plus interest, and since their export prices have been steadily declining in the post war years, their accumulated interest swells to a rate that is higher than the nominal dues stipulated in the original contract (http://hdr.undp.org/external/HDR_papers/oc3b.htm). In…… [Read More]
Barry Eichengreen (2011) has speculated that the U.S. dollar may be on the decline as the world's vehicle currency. The dollar has performed this role since at least Bretton oods, when the financial and political might of the United States allowed it to take the lead in the global financial system from Great Britain. However, that lead is being challenged today by two other currencies. One is the euro, which derives from the Eurozone, a basket of nations that has an economy around the same size as the United States. The other is from the Chinese yuan, a currency that is pegged to some degree to the U.S. dollar, but which is backed by the world's third-largest economy (behind the U.S. And Eurozone) and one that is growing rapidly. The creation of the euro immediately fuelled speculation that it would overtake the dollar as the world's vehicle currency, and the…… [Read More]
functions of the International Monetary system, a few significant institutions which deal with foreign currency as well as conclude on which system of exchange rates is more useful in the corporate world.
History of the International Monetary System:
In the start of the economical world, people were commonly in the habit of using the barter system to purchase goods that were in need. With time though, the system of trading gold and silver coins started to evolve. Around the 19th century, officially, countries started issuing themselves a basic currency. This marked as the beginning of the modern day monetary system of trade.
In the Pre-World War era, money unions evolved which enabled people of different countries to easily exchange currencies. In this period of time, there was a low level of financial crisis and economies were growing steadily. However, with the World War going on, global trade and the flow…… [Read More]
Reform of the International Monetary System
The proposal for international reform that is most important is the International Lender of Last Resort. An international lender of last resort might have the ability to preclude contagion, in which an efficacious speculative attack on one emerging market currency gives rise to attacks on other emerging market currencies, propagating financial and economic disorder as it goes. Taking into consideration that a lender of last resort for emerging market nations is necessitated at times, and bearing in mind it cannot be provided locally, there is a significant justification for an international institution to occupy this role. This can be linked to Mexico's financial crisis of 1994, where the IMF took the role of lender of last resort and offered emergency lending to nations facing financial instability. On the other hand, an international lender of last resort generates risks of its own, particularly the risk…… [Read More]
Other tools frequently used in this approach are positioning surveys and moving-average trend following trading rules. Fund managers regularly use these patterns to take informed decisions for short-term investments (Exchange ate Forecast, 2010).
Exchange rate risk affects both revenues and costs, which in turn affects a company's marketing, production, and financial decisions (Shapiro, n.d.). If a company's revenues are down then they might find themselves with less money to produce and market their product or service. If a company cannot produce or market their product or service they will probably not remain in business for very long. This is why it is so important to make financial decisions based upon a good model for forecasting exchange rates. A company's bottom line and ultimately their continued success rely heavily on their capability to have enough money to produce products and market them. A company that has no money to manufacture and…… [Read More]
Globalization in the economic sense - economic, social and technological process that advocates a constant interdependence at a global level, supporting trade liberalization.
International Monetary Fund (IMF) - an international financial organization that monitors the global financial flows and that offers financial assistance to Third World countries.
African Festival of Arts and Culture (FESTAC) - cultural festival that promotes and sustains the revival of the lack cultural values and civilization.
1945 - the end of the Second World War and the beginning of the contemporary period. It is also equivalent with the start of the decolonization period, with Indonesia one of the first countries to make this step.
Poverty - lack of the material capacity to finance the basic needs of an individual or a society.
A unfreedom" ref. Sen - according to Sen, these would include, besides lack of political freedom or freedom of the press, forms of unfreedom…… [Read More]
The main advantage of this association is that you will get to control the production process and both collaborators will have the right to question and manage everything. It will require high negotiation skills, primary high investments, but the market is full of potential. By joint venture we will have the possibility to interfere in the recruitment process, deciding who the best people for the jobs are. For India, there will also be an important gain. Not only do we stimulate intern, national production but we also give new job opportunities to citizens. Moreover, due to the fact that India has highly trained people in the technological domain, we might improve our product's characteristics or even come up with new ways of reducing the costs. Moreover, the assembling parts will be less expensive as their transportation costs will be lower.
When choosing a country for expansion, one has to…… [Read More]
Liquidity shocks on the international arena can have a strong negative impact on less developed countries whose access to funding sources is already reduced.
The clearing risk is a specific risk, which combines credit risk, in the sense that it results from a counterparty's inability to meet its liabilities, market risk in the sense that it is caused by market shifts (general and specific market risk) between the time a transaction is executed and the time it is cleared, as well as liquidity and systemic risk." (Casanova, 2000). The clearing risk is assumed by clearing houses, which guarantee the proper settlement of transactions done by the members. These institutions engage themselves to bear potential replacement costs if either one of the trade counterparties can't fulfill its obligations. In international markets this risk is increased as the international arena as mentioned before it more dynamic and volatile and the chance of…… [Read More]
For example, Shu-Acquaye (2007) cites the basic differences in the legal systems in various parts of the world as contributing to the different approaches to corporate governance. Likewise, Shu-Acquaye cites these differences and adds, "The American corporate governance system adheres to the idea of shareholder primacy. Because the United Kingdom, Austria, and Canada share a legal system based on English common law and equity principles, they are similar to the United States -- shareholder primacy is the predominant norm in each of these countries."
By sharp contrast, other countries such as Japan and Germany are characterized by stronger protection for their employees, creditors, and other nonshareholder stakeholders in general, representing examples of a stakeholder-orientated system. In their book, the Control of Corporate Europe, Barca and Becht point out that, "Germany has always had a prominent place in the international corporate governance debate. The country is among the largest and richest…… [Read More]
Given the high degree to which AIDS impedes global economic integration, in particular of sub-Saharan Africa, it would be reasonable to think that such a transnational issue would bring nations and institutions together to a much higher degree than we see.
Overall, the various aspects of the international system have enabled the expansion of global economic integration. Regimes, institutions, and regional interests bring nations together to meet common objectives. As rational actors, nations sometimes impede global integration, be it over a domestic issue or a transnational one. No aspect of the current international system, however, specifically impedes global economic integration. Only when a nation takes itself out of the international system, as has occurred in North Korea, Cuba, Zimbabwe and a handful of other countries, does economic integration become fully impeded. Therefore we can reasonably conclude that the international system, on balance and with a modicum of cooperation on the…… [Read More]
International Humanitarian Aid: Aims vs. Outcome
Humanitarian aid represents a commitment to support vulnerable host populations that have experienced a sudden emergency, requiring ongoing assistance to maintain or improve their quality of life. Over the past 15 years the number of humanitarian agencies, private organizations, governments (taxpayers), corporations, individuals and other stakeholders have grown enormously. This group of diverse donors have differing mandates, values, goals, strategies, actors and activities, but most function under one universal humanitarian principle: to protect the vulnerable by decreasing morbidity and mortality, alleviate suffering and enhance well-being, human dignity, and quality of life. However, many stakeholders believe that humanitarian aid has been unsuccessful in delivering on these promises through lack of coordination and duplication of services. This results in a failure to meet the needs of those meant to benefit. Indeed humanitarian aid with its diverse mandates, roles, people, time lines and funding, as well as…… [Read More]
For instance, McDonald's has a solid partnership with Starbucks that came as a natural solution to the increased consumption of coffee in its restaurants. Starbucks happens to be the world's leading specialty coffee retailer with a worldwide presence that matches that of the fast food producer.
Other factors affecting decision
Vietnam is an Asian country with strong oriental cooking habits, which might not be very compatible with McDonald's typical menu of cheeseburgers and fries with a Coke on the side. Furthermore, the local food seems to be relatively healthy, which again is not something that cam be said by McDonald's food.
In 1990s, the company tried to enter this market, but didn't due to the lack of suitable business partners. A few years later, KFC and Lotteria entered the market and consolidated their position. Therefore, at this point the restaurant chain would need a couple of strong breakthrough strategies…… [Read More]
International Business - China
hy is the value of the yuan relative to the dollar so important?
The Chinese government has the power to dictate the value of the yuan vs. The U.S. dollar. The fact is that a strong U.S. dollar makes it more difficult for American companies to export competitively and when the dollar is weak that can (and does often) reflect that imports are reduced and U.S. exports have more strength.
In other words, when China's yuan is very low against the dollar, Chinese exports are cheaper than American exports. Hence, it behooves China to keep its currency low, and on the other hand for American companies, they say that gives China an unfair advantage. According to the article "A eak Dollar vs. A Strong Yuan," China has deliberately kept its yuan low, and this irritates the U.S. because American leadership (and Congress) argue that China should…… [Read More]
regional international institutions, International Monetary Fund, World Bank, United Nations, World Trade Organization, a financial institution. Select countries apply traditional international trade theories, absolute advantage, comparative advantage, factor endowment, enhance participation international trade.
International Trade Participation
The interaction between countries is a complex process that is strongly influenced by economic, political, and cultural factors. The need for this interaction is based on the resources that can be provided with smaller efforts by some countries to countries that need them. The need for resources has determined countries to involve in military, economic, and biological wars, or to involve in influence relationships where several countries support a larger community that can polarize greater power in the attempt to counteract the influence of other powerful countries. This is the case of the European Union that was developed in order to join the efforts of European countries so that they could balance the power…… [Read More]
International Human esource management Articles
In this paper, we will critically evaluate two separate journal articles related to international human resource management (IHM) and draw out their contribution to IHM in an integrated literature review. The topics of these two articles are Development and Globalization. First, we will overview both of the articles separately in this introductory phase and then in the literature review we will support our outline of concepts and ideas in the two articles. A critical analysis will then be done relevant to the articles which will examine the strengths and weaknesses of the articles. After the critical analysis we will advise how both of the subject matter discussed can be applied to multinational companies either large or small.
Finally, we will give a conclusion and recommendation in which the former will include summary of what we have found looking back at the overall paper and the…… [Read More]
As a result, liberal international institutions broke down. Conversely, ineffective international institutions compounded national economic difficulties. (Holm & Sorensen, 1995, p. 148)
Following World War II, the United States assumed a leadership role in developing new types of international institutions. For example, the General Agreement on Tariffs and Trade (GATT) provided for a liberalization of international trade, the Bretton Woods framework created a fixed exchange-rate system (which lasted until 1971), and the International Monetary Fund controlled the flow of credits until the mid- 1970s and once again from the early 1980s thereafter; in addition, these authors note that the EEC institutionalized a free-trade area in the heart of Western Europe at this time (Holm & Sorensen, 1995). According to Mingst (2006) international institutions are defined as those they are comprised of membership from at least three states, having activities in several states, and whose members are held together by a…… [Read More]
Business: International Business
International Business: Business
The IMF often provides financial assistance to ailing economies after a crisis to enable them return to their pre-crisis levels of income. However, whether or not these bailout programs are able to achieve this objective is dependent on a number of factors. This text reviews the recovery processes of four European countries to obtain a view of what these factors are.
dollar = 102.28 Japanese Yen (¥); 0.75 Euros (€); and 0.6 British pounds (£)
Converting $1,500 into:
=$1,500 X 102.28
= $1,500 X
= € 1,125
= $1,500 X
What is the price in U.S. Dollars of purchasing:
A computer costing ¥167,000
= ¥ 167, 000/¥102.28
= $1, 632
Euro desks/chairs costing €1, 125
iii) Printer costing 575 Pounds
Part Two: Effects of the Global…… [Read More]
International Accounting and Auditing Standards
International public sector accounting standards (IPSAS) are developed and put forth by the International Public Sector Accounting Standards Board of the International Federation of Accountants (IFAC). International private sector accounting standards are known as International Financial Reporting Standards (IFRS). They are put together and put forth by the International Accounting Standards Board (IASB), a self-governing standard generating body of the International Accounting Standards Committee Foundation. The IFRS for SME's is a self enclosed standard, intended to meet the requirements and abilities of small and medium-sized entities (SME's), which are anticipated to comprise over ninety five per cent of all corporations worldwide. It is constructed on the basis of full IFRSs, yet, a lot of the principles for distinguishing and gauging assets, liabilities, earnings and expenses have been cut down, subjects not relevant to SME's have been left out, and the amount of necessary revelations…… [Read More]
Realism in International Relations
In the study of politics, the subject of international relations inevitably surfaces, mainly because politics do not only deal with national or domestic affairs, but also international concerns and issues. In the field of international relations, there are two prevailing paradigms: realism and liberalism. Although the focus of this discussion would be on realism, it can be best understood by also identifying and distinguishing it from liberalism.
Liberalism as a political paradigm in international relations posits that conflicts between and among states can be resolved through the help of international institutions like the United Nations and World Trade Organization. As a political ideology, liberalism is idealistic in the sense that its proponents believe that conflicts and even wars can be resolved diplomatically, and effectively through an efficient medium (i.e., international institutions). The Modernist Project of the United States during the Cold War period witnessed…… [Read More]
States like Bangladesh, Egypt, and Indonesia have severe challenges due to the risks of flooding, drought, and deforestation. Recently Bangladesh was hit by a powerful Typhoon (same as a hurricane), which caused thousands of deaths and was so severe it was beyond the capability of its weak government to deal with the disaster.
The U.S. Department of State (DOS) has been working for many years to try and help with a solution for the Israeli-Palestinian Conflict. The violence between these two states has been going on for many years, and numerous previous attempts to find a lasting peaceful solution have failed. In a document called "A Performance-Based roadmap to a Permanent Two-State Solution to the Israeli-Palestinian Conflict," the DOS plan includes three phases. The first is the most crucial and pivotal - an end to the "terror and violence" and an attempt to normalize Palestinian life - in conjunction with…… [Read More]
"Policy issues attract a substantial attention from both economists and policymakers in the recent years" (Obsteldt). ith such attention being focused on the policy issues, it makes more than a little sense, to focus the attention there as well in order to have a higher likelihood of success than without the same attention. In order to focus attention on those policy issues it must be understood what those policy issues entail.
Those issues can include such items as exchange rates, currency crises and other financial events taking place in either country. The MIT study stated other components should also be addressed. "These include theory and evidence of exchange rate-based stabilizations....sovereign debt management and reform of the international financial system" (Obsteldt). Since there is currently no major problems between the two countries, both countries participate in the orld Monetary Fund as active members, and neither country is mismanage their debt management,…… [Read More]
From its creation to 1988 it undertook banking functions and opined generally on the international banking system.
2. Starting in 1988 it began to assume the role of an unofficial international bank regulator. Although it had no official international status, its members -- central banks of the major banking countries -- were obligated by the nature of their membership to abide by its edicts and the rest of the world took them seriously.
3. Starting in the late 1990s, it began to consider itself the equivalent of an international bank regulator. Every subject of significance was within its jurisdiction and, although its legal powers were no greater, it assumed that it had a right to make rules for local banks to observe in the conduct of their businesses.
4. Sometime in the future there is a widespread anticipation that it will be given, through some treaty mechanism, the power to…… [Read More]
There have been important controversies also related to the austerity programs that the IMF supports as a condition of giving financial loans. Joseph Stiglitz was an important opponent of such programs, underlying that increasing taxes in a weak economy destabilizes the economy even further and that this was a Monetarist approach aimed at supporting Western interests rather than those of the developing countries. To some degree, this is true and some of the failures of the IMF, including the Argentinean crisis are good arguments in this sense.
Argentina has been cited as one of the failures of the IMF, mainly because the budgetary restrictions that were imposed under the IMF programs did not allow the government to develop its own projects and affected economic growth. Countries like the Philippines have argued that the IMF program has helped their economy significantly, while Turkey's rebound at the beginning of 2000s is also…… [Read More]
Foreign Monetary System
A monetary system is any structure initiated by the government and mandated to issue currency, acknowledged as the medium of exchange by its citizens and governments of other nations. The central bank manages the monetary system of a country; this same bank has the responsibility of printing money and controlling the economy. Since the colonial period, coins from the European colonies had circulated in all the colonies. The Spanish coins gained dominance due to the scarcity of coins, during this time; the main form of trade was barter trade. The trade-involved items such as rice, tobacco, or animal skins, which took the form of money paper and notes, had varying rates of discount in different colonies rendering them of very low value (onald & Wright, 2006).
The high population in the U.S. called for increased trade and commerce. This forced the United States government to look for…… [Read More]
Legitimacy of International Institutions
International institutions are based on the multilateral treaties or the agreements among multiple states. States generally enter in the treaties to promote their common aims, and law recognizes the existence of international institutions. Typically, international institutions are established based on the charters that bind the member states together. "International institutions are the set of rules means to govern international behaviours" (Simmons & Martin 2001 P. 194). This definition is very important because international institutions have established set of rules guiding the conduct of member states. Based on the definitions of international institutions, it is revealed that member states are subject to abide by the decision of international institutions. However, there are hot debates among scholars and political actors whether international institutions posses legitimacy on the member states. (D'Amato,2007, Zurn, & Stephen 2010).
The objective of this paper is to investigate the legitimacy of international institutions.
Legitimacy…… [Read More]
The focus of the U.N. later this year in their global summit in Copenhagen will focus on the role of women in emerging economies and the contribution their businesses make. To illustrate how strongly the UN sees their mission about helping underprivileged nations, UN undersecretary -general for humanitarian affairs, Jan Egeland called developed nations "stingy" when it came to their contributions to 3rd world nations' welfare (Sharma, 2005). The bottom line is that these organizations are all focused more on the humanitarian missions they cooperate on and less on selfish strategies for gain.
Graham Bird & Dane owlands. (2007). The IMF and the Mobilisation of Foreign Aid. The Journal of Development Studies, 43(5), 856-870.
Capling, a., & Higgott, . (2009). Introduction: The Future of the Multilateral Trade System-What ole for the World Trade Organization? Global Governance, 15(3), 313-325.
Shalendra Sharma. (2005). The…… [Read More]
The increase in profits (at certain points) highlights the overall risks vs. rewards, as they can see substantial growth of 5% each year. Moreover, the performance of various strategies used in management of hedge funds experienced a greater feat, despite having less asset classes to choose from.
Over the years, the hedge fund industry has shown consistent growth and increase in its regulatory issues. This is because managers are using strategies that: increase the overall amounts of risk, while offering the possibility of greater financial rewards. As a result, the odds improve that investors could experience significant losses in these areas (which increases the overall amounts of regulatory scrutiny).
Hedge funds will experience more changes that will lessen its variance in comparison with mutual funds. Where, it will determine its investors and techniques of management without being greatly influenced by: institutionalization or regulation of the finance industry. In 2005, Ibbotson…… [Read More]
Historical evolution of functional responsibilities of SAMA
History of SAMA (Saudi Arabian Monetary Agency)
The Saudi Arabian Monetary Agency (SAMA) was established on October 4th, 1952 and is headquartered at iyadh, Saudi Arabia. SAMA operates as the central bank of the Kingdom of Saudi Arabia (KSA). Before setting up the Saudi Arabian Monetary Agency, KSA utilized the service of Saudi Hollandi Bank as the central agency to keep the governments gold reserves. The idea of setting up SAMA as the central government operated agency was materialized by Abdallah Sulaiman, the then finance minister of KSA. The currency that SAMA regulates and prints is the Saudi iyal, the official currency of KSA. The establishment of SAMA was decreed by King Abdul Aziz on 25/7/1371H, 20th of March, 1952 (SAMA, 2013).
SAMA is currently the official agency charged with management of financial system. With the evolution and development of…… [Read More]
Demand for Money
The international community is currently facing the most severe crisis since the Great Depression of 1929 -- 1933. It started within the American real estate sector and soon expanded to the rest of the sectors, as well as to the rest of the global economies.
The causes and impacts of the crisis have often been discussed in the media and within the specialized literature, and the discussion is far from over. Still, this approach to the crisis is more descriptive and reflective. At this stage nonetheless, it is necessary to implement a proactive approach through which to promote solutions to overcoming the crisis.
Governments across the globe have each developed and implemented their own solutions to the crisis, ranging primarily from injecting capitals in the troubled industry sectors and companies, to efforts aimed at reducing federal costs. In the completion of these efforts, a crucial role is…… [Read More]
Country Study: China
International trade and finance
China Economic Issues with Trade
Suggestions for improving trading practices
COUNTY STUDY: CHINA
COUNTY STUDY: CHINA
COUNTY STUDY: CHINA
China, officially the People's epublic of China (PC), is considered to be a sovereign state located in East Asia. It is the world's most populous country, with a population that has over 1.35 billion. The People epublic of China is a single-party state which is supervised by the Communist Party, with its seat of government in the capital city of Beijing (Naughton, 2012). It handles a regions that is over some 22 provinces, five of them are autonomous districts, four are direct-regulated cities (Beijing, Tianjin, Shanghai, and Chongqing), and two typically self-governing special administrative districts (Macau and Hong Kong ). (Snyder, 2011)The PC People epublic of China likewise makes the claim that Taiwan -- which is mostly controlled by the epublic of…… [Read More]
political scenario illustrated that governments all over the globe are making their immigration rules more stringent because of the rise in terrorism; the implication of this phenomenon is a decrease in international traveling, which endangers continuance of a number of airlines, including Nigeria's Arik Air (Eze, 2010). Hofstede's power distance dimension denotes the degree to which unequal distribution of power is anticipated and accepted by the lower ranking members (in terms of authority), of organizations and institutions in the nation under consideration. UA's score on this dimension is relatively low (40). Power distance deals with members of a society not being on an equal footing with one another; the dimension conveys a particular culture's outlook towards power imbalances among countries, as well. Furthermore, the inequality that prevails in a given society is equally approved of by its leaders and followers. Nigeria demonstrates a high power distance score (80), signifying its…… [Read More]
Cross-Country Capital Flows and Currency
overseas investment .
GLOBAL INSTITUTES IN INTERNATIONAL FINANCE .
INTERNATIONAL FINANCE CORPORATION .
ORLD BANK .
ORLD TRADE ORGANIZATION
INTERNATIONAL MONTARY FUND .
INTERNATIONAL FINANCE IN CHINA .
THE EXCHANGE RATE FIASCO
FINANCIAL CRISIS IMPACTS ON SINO-AMERICAN RELATIONSHIP
RECESSION'S AFFECT ON CHINA .
ASIAN MONETARY FUND .
CHINA'S TRADE POLICIES AND THEIR CONTRIBUTION TO THE FINANCIAL CRISIS
Monetary policy is the study of circulation of money, the granting of credit, the making of investments and the provision of banking facilities and international finance is studying it on an international level.[footnoteRef:2] Usually the affect can be seen in exchange rate and foreign investment and international trade. This includes the analysis of global financial markets, cross-country capital flows and currency, international projects, and overseas investments. [2: Merriam-ebster Online Dictionary: http://www.merriam-webster.com/]
US Monetary Policies have a far reaching effect on the other…… [Read More]
ules and Institutions of the Bretton Woods System
The increasing popularity of the importance of monetary unions has gained much focus in the recent past. Most states consider forming monetary unions a solution to most of their financial problems. However, they fail to realize the challenges associated with its establishment and sustainability. Therefore, this research paper analyzes two different monetary unions, their policies, failures and successes and lessons learnt from their experiences for future success of the monetary unions.
The key design features of the System
The system was designed with the fundamental aim of establishing an international financial system to overcome the real and perceived financial problems. Among the problems included the competitive devaluation, subordination of the monetary policy in relation to the external bane and the need for the establishment of a system that facilitated exchange rates for different foreign transactions (Eichengreen, 2004). The design of the system…… [Read More]
Accordingly, it is important for international negotiators to possess characteristics of communicational dexterity, cultural acuity and a certain amount of charisma. It is necessary to command sufficient respect as a representative of one's firm and its cultural identity without trespassing the cultural proclivities of a potential host nation or trade partner. That said, it is also frequently the case that parties in negotiation will exist on different planes of authority. Negotiators must be characteristically attuned to power dynamics and the impact that these are likely to have on the avenue and outcome of trade engagements. So reports the text by Lall (1966), which notes that "a difference in the power levels of the countries concerned is one of the factors of prime importance which affect movement toward negotiation." (p. 132)
Tactics in such contexts and the resultant effectiveness will often be a direct function of the selectivity and judiciousness exhibited…… [Read More]
Balance of trade is being more impacted by currency re-valuations in China, the declining value of the British pound and the reconsideration of indexing the Euro (Altman, 2009). What emerges as a result of these conditions that the decision on the part of the G-20, or ministers and central bank governors of the world's largest economies is to continually increase the International Monetary Fund (IMF) over time (Altman, 2009). This is going to have an immediate effect of increasing inflation globally and also fuel more of an unstable region in Pakistan and Afghanistan (Altman, 2009). Never before has the balance of trade had direct implications on the relative political stability of nations as they do today (Altman, 2009). This tight link of international trade and political stability is projected to become more prevalent through African nations whose economies were just beginning to gains stability as well. In summary, the current…… [Read More]
As such, Chavez's initiative inspires international leaders to increase their independence from a single force. Managers are encouraged to become more independent, to focus their efforts towards developing a solution to their problems without the aid of foreigners. Furthermore, international rulers are advised to take action in regard to their issues instead of waiting for a tertiary intervention.
The actors on the international management scene are also encouraged to seek assistance and develop relationships with their neighbours and other parties that might find themselves in similar situations and who have similar desires and expectations. As such, the decision to open a new development bank in South America inspires international leaders who rule over smaller communities to join forces in order to reach their goals and also to decrease their dependence on one strong force.
On the other hand, what Chavez's implementation of a new bank does for the community of…… [Read More]
Ever since Adam Smith demonstrated in The Wealth of Nations (1776) that individuals would be better off if they specialize, instead of trying to be economically self-sufficient, countries across the world have tried to apply the same principle to international trade. It is argued that all countries would be better off if they exchange the products and services that they are relatively good at producing for those things that other countries are relatively better at producing. David icardo (1772-1823), British economist and businessman, through his theory of Comparative Advantage went on to "prove" that it can be beneficial for two countries to trade, even if one of them is able to produce each item more cheaply than the other.
The colonialist powers, particularly Britain, had realized the benefits of international trade after its industrial revolution although it is highly debatable whether such trade was beneficial for the colonies…… [Read More]
Additionally, its taxation advatantages may erode due to pressure from EU and implicitly its wages will increase as taxes increase. Competition from emerging countries, namely Eastern Europe will become stronger as Ireland allings its strong points to EU standards. Moreover, the country's inflationary problem persistance may strengthen EU pressure on the authorities to reduce it through its fiscal policy.
BBC news channel. 2004. Ireland is Named 'Best Country', published on Nov 17, http://news.bbc.co.uk/1/hi/world/europe/4020523.stm.
Barry, F. And Bradley, J. 1997. FDI and Trade: The Irish Host-Country Experience. The Economic Journal, vol. 107(445): pp. 1798-1811, http://www.res.org.uk/
Berry, . 2001. U.S. Foreign Direct Investment in Ireland: Making the Most of Other's People Money. Perspectives on Business and Economics, vol. 19.
Cassidy, Mark, 2002. The Irish Economy: ecent Experience and Prospects. in: Aronson, ., Munley, V., Thornton, . (Eds.). The Irish Economy in Transition: Successes, Problems and Prospects. Elsevier Science, Amsterdam: pp.…… [Read More]
27-29) This provoked financial demands and awareness of the people in different parts of the world. People and businesses are dissatisfied with the traditional financial systems due to lack of opportunities for investors. Businesses today require more diversified portfolios for investments because this will reduce their investment risks and increase the probability of future capital flows.
Increased capital mobility has increased the importance of exchange rates which is serving as a monetary policy channel in some industrialized economies. In mid 2000s, there was a sharp shift in the flow of international investments and savings (geographic pattern) resulting in the segmentation of current account imbalances. This was also a major contributing factor. Additionally, the domestic financial markets were also affected by the change in regulatory environment. The two important factors for this are as follows:
1. apid growth of OTC (over-the-counter) markets of derivatives in terms of complexity as well as…… [Read More]
Another reason why corporations choose to hold cash balances in a centralized repository is that the variety of accounts can be better managed as a mutual fund more complex investment structure than would be the case if the subsidiary alone managed the funds. A greater quality of information is available for example in the leading financial centers globally that would otherwise not be the case in more remote regions, making it possible to make more informed and correct decisions (Mitsos, 1997). The accuracy, efficiency and speed of decision-making based on more efficient use of information has led to more advanced forms of cash management than would have been the case on a per-subsidiary level (Fresard, Salva, 2010). Lastly, by having a centralized depository of cash for all subsidiaries, firms can hold less accumulated total cash, freeing up financial resources for other investments (Fresard, Salva, 2010). Companies become more efficient at…… [Read More]
hat information would you require to assess the options which are open to ABH Electronic (15 Marks)
In order to properly assess the options that are available to ABH electronics I would need additional information pertaining to the economic conditions of the three countries seeking to attract ABH. Specifically I would need to know the Gross Domestic Product, the overall market index, the consumer price index (inflation), the annual per capita income of residents and the overall economic viability of the various countries. I would need to assess this information because knowing the economic condition of a country will enable the chief financial officer to create a strategy that is beneficial to ABH electronics. It will also allow the CFO to examine the risks associated with doing business in that particular country. I would also need to know the size of the market, the demographics, social issues and…… [Read More]
Cultural. Ireland tends to be culturally close to the United Kingdom and Europe and this explains why the main trading partners are represented by the UK, the EU and the United States. First of all, Ireland, the UK and the U.S. share a common language, English, which makes trade and commercial cooperation easier than, say, between Ireland and Japan. The ease of communication also encourages companies from the mentioned countries to invest in Ireland and one can notice that the main foreign investors are also the U.S. And the UK. On the other hand, Ireland, similarly to the U.S. And the UK, is an Anglo-Saxon country, with Anglo-Saxon traditions and social norms. It shares similar customs with the UK. Further more, the significant wave of Irish emigres to the United States had an important impact on the evolution of the U.S. And the development of society took account…… [Read More]
International Lending and Financial Crisis
One of the major global financial crises is the financial crisis of 2007-2009. The financial recession that occurred between 2007 and 2009, encompasses the housing bubble that instigated the financial crisis, federal expenditure, and foreign exchange rates. Also, referred to as the 'Great recession', this global financial crisis had adverse impacts not only on the financial markets but also on the economies of nations across the globe, being the worst financial crisis in history. The financial crisis emanating from the U.S. affected other nations owing to financial globalization and led to discussions regarding restructuring of the international financial system (Ozkan, 2012). In particular, the global financial crisis originally started in and adversely impacted the financial sector of developed nations, especially in the United States, and subsequently had a detrimental impact of the real sector of affected nations as the financial institutions in the United States…… [Read More]
Nevertheless, the heavy reliance on such debt led in some cases to severe difficulties, as illustrated by the Mexican tequila crisis of late 1994 and the Brazilian crisis of 2001. In Mexico the problem happened when investors became increasingly reluctant to roll over their short-term peso-denominated cetes and instead shifted their funds to short-term dollar-indexed tesobonos. This shift to dollar-indexed liabilities supplied a temporary respite for the government but the short-term nature of outstanding securities also meant that the transformation in the structure of debt towards tesobonos was extremely quick. The rapid withdrawal of foreign investment from the domestic market at the end of 1994 and the resulting sharp drop in the Mexican peso resulted in an explosive growth in the peso value of dollar-indexed government liabilities, thereby adding a fiscal dimension to the external crisis (Jeanneau and Tovar, n.d.).
The local government bond market has expanded rapidly in Mexico…… [Read More]
It is necessary to underscore this importance given the current fragility of the international trading system amid a global resurgence of protectionist pressures due to the deepening economic crisis (Bown, 2009).
In 2006, and in response to increased political pressure by the U.S. Congress, Washington initiated the current U.S. strategy of using the judicial forum of the WTO to manage bilateral trade frictions with Beijing. In March 2006, Canada and the European Community (EC) joined the United States in the first dispute by challenging China's discriminatory treatment of imported automobile parts. In 2007, the United States and Mexico disputed China's system of subsidizing domestic industries. Also in 2007, the United States initiated two complementary disputes over China's treatment of imported movies, music, and books, both Beijing's failure to enforce American intellectual property rights protection and its creation of regulatory hurdles that impede Hollywood film studios and other media and publishing…… [Read More]
The same access to formerly secret information from the Cold War era also revealed the extent to which Soviet infiltration of the highest level of American military projects had served to further exhaust the American economy by necessitating continual development of strategic and tactical weapon systems to counter escalating technological improvements in Soviet military systems. The first successful test of a Soviet nuclear weapon in 1949 was directly attributable to Soviet infiltration of the top secret Manhattan Project; American pilots flew combat missions against Soviet Mig fighters developed with information stolen from American weapon designs through espionage; and that dynamic persisted virtually throughout the Cold War (Langewiesche 2007).
The financial strain of continuous nuclear deterrence and the perpetual modernization and updating of sophisticated strategic weapon systems was among the principle causes of the eventual collapse of the former Soviet Union. By 1989, the protracted war in Afghanistan had all but…… [Read More]
Combined with the increasing prevalence of regional trading blocs, higher transportation costs may result in a move towards regional production rather than global. In other respects, however, Lonely Planet's business will remain essentially unchanged over the coming years.
The globalization of international trade has had a profound impact on Lonely Planet's operations. It has allowed the company to use offshore production centers that are capable of serving the global market. The monetary flows even at a relatively simple, one-product firm like LPP illustrate the degree to which economies around the world are intertwined. The company receives monetary inflows from dozens of nations, and disperses monetary flows to dozens more. Including small flows, the operations of Lonely Planet contribute to the economy of nearly every nation on earth.
The recent changes with respect to the global economy will continue to impact operations into the coming years, affecting the firm's ability…… [Read More]
Political Leaders In Latin America: Hugo Chavez And Lula
Who is Hugo Chavez and Lula
Hugo Chavez was born on 28 July 1954 in Sabaneta, Venezuela. Chavez attended Venezuelan military academy and took up service as an army officer prior active participation in efforts of the overthrowing government in 1992. His actions led to a two-year sentence in prison after arrest. In 1999, Chavez was named president of Venezuela. Within the early days of his presidency, he developed new constitution in the nation that was inclusive of changes of the capital name to the Bolivarian epublic of Venezuela. Chavez engaged in a critical focus of efforts towards gaining ultimate control of state-run oil companies. However, this was stirred with controversy and translated into protests and strained relations between Venezuela and the U.S. As well as subsequent nations. Chavez has a brief comment on the removal from power (Clairmont,…… [Read More]
Since the 1990s, criticism has mounted regarding the IMF's narrow construction of a 'one size fits all' economic policy. "Policies of privatization and deregulation may work better in developed countries in the est, but, maybe more difficult to implement in the developing world" (Pettinger 2009). There is also alarm that the IMF is excessively directive when extending loans to nations -- for example, mandating user fees for health care, an important issue in the current struggle for Jamaica to borrow funds from the IMF. Jamaica charges no user fees in its system of nationalized care, although the IMF argues that charging money, according to classical economic theory, enables more effective use of scarce healthcare resources. Yet "there is compelling evidence of a link between user fees and poverty. In a study that shows the 'poverty impact' of out-of-pocket payments (OOP), 78 million people in 11 low/middle income countries in Asia…… [Read More]
International Monetary Fund (IMF) is an organization of 187 nations that was created after World War II for the purpose of attempting to stabilize the world economy. Its focus in this regard was on providing a monetary system that could effectively manage exchange rates between nations. At the time of its formation, exchange rates were a particular problem in the world's economy and the IMF was instrumental in establishing an effective system that allowed money to be exchanged between nations. This purpose was largely obviated in the 1970s as the system designed by the IMF following the Second World War was abandoned but at such time the IMF became involved in other financial areas. Today, the IMF is involved in three main areas of concern: surveillance, money lending, and technical assistance.
As part of its surveillance responsibilities, the IMF facilitates the cooperation of its member nations so that the financial…… [Read More]