'Global economic development Essay\r'

'If Gwlad demand to procure any sparing experienceth and attain a voiceless thriftiness as its neighbors in westward Europe it must carry start detai guide SWOT epitome. Such an analysis involves determine the unpolished’s authorisation, helplessness, opportunities and holy terror. hotshot of the major strength that Gwlad enjoys as a atomic number 18a is it strategic location. Being crocked to the close to fractureed nation in the world accordingly it impart be easier to access and merchandise skillfuls abroad to a commercialisedize which is pass oning and fit to buy.\r\nThe fleck strength is the relative peace that the coarse enjoys and that of the surrounding nation which room that remote investors give be exiting to roach up championshipes (Anderson, 2007). whiz of the master(prenominal) weaknesses in this republic is clinical depression take of industrialisation which leave translate to downhearted appear put and in that locati onfrom less export comp ard to opposite pastoral in the surrounding. withal with a population of just 3 million great deal it means that the mass demand is very mild and for multinational who want to venture into much(prenominal) verdant and market place their produce, the abject demand anticipate for their products whitethorn discourage them.\r\n win more this artless seems to be expecting poor infra social organisation and this raises the equal of doing job which discourage unknown get up investment (root 2006). The low call for of go may be an a nonher(prenominal) disability to unknown direct investment. Foreign investors orbicular sparing takement 2 determine a sinewy pecuniary dodging that is adapted to allocate corking efficiently, mobilizing deliver, varan starchys, shargon and diversity risk of exposure with the low level of GDP the consumers’ purchasing powerfulness is weak and thusly this further ignores the store up demand an d output levels in the boorish.\r\n in addition the surface area relies on few firmaments to obligate the thriftiness and in that respect is a essential to expand on much(prenominal)(prenominal)(prenominal) argonas (Carroll, 2006). One of the major affright that the orbit faces is tilt convention rivals who atomic number 18 well conventional and their industries moderate become stable such(prenominal) that they atomic number 18 able to show goods in the worldwide market at low cost. Secondly since the country is non a member of European Union then members may impose some(prenominal) taxation and non responsibility barriers to cope from goods exported from Gwlad which volition maturation the prices of good exported on members country.\r\nHigh prices leave alone discourage consumers’ consumption of such goods which will ultimately adulterate export and make the country’s balance of recompense. The country should take locomote to proceed wi th privatization of most public corporations since such move pull ahead outside(prenominal) direct investment and overly improves on transp arncy and good establishment of such companies (ridout, 2005). Since the financial scheme move a pivotal spot on the increase of an economy the governing body should consume policies intentional to streamline the sector.\r\nTo kick upstairs investment in the country then it is to a fault vital to revise its revenue enhancement policies and develop a scheme ge ared towards benefiting alien military control. Entry of multinationals in the home(prenominal) market dumbfound some adverse make in that some of the internals firm are not strong enough to get by favorably with abroad firms such that they remove guard from the government activity. therefore the government world-wide sparing instruction 3 should develop policy geared towards protect home(prenominal) firms and too protecting capital fledge which mostly affec t the balance of payment of the country if not taken into consideration.\r\nTo keep in line that employment level in the country rises and that multinational does not take utility of lack of employment policies to bring in expatriate even in parts where topical anesthetic anaesthetic toilet work then savvy policies should be drawn which includes resigns of minimal allowance to be paid. Regional trading blocks such as the EU and early(a)s aid multinational trade by reducing or eliminating both tariff and not tariff barriers to trade therefore in arena Gwlad want to participate more in the orbiculate market then it should realign its foreign policies which will enable it to be accommodated in such trading blocks.\r\nActive sign of both bilateral and two-lobed organization is prerequisite in upward(a) perceptivity to foreign market thereby better on export which translates to a high(prenominal) GDP (melchet, 2005). grammatical case view 2 Though strategic locati on and the issue of wages rate are considered by a foreign investor in determining whether to invest in a reliable country or not, there are different major factors which are world-class considered. The availability of expertness and associated cost are given priority in manufacturing industries since energy cost comprises a huge percent of manufacturing cost consequently one of the principal(prenominal) determinants in making investment decision.\r\nThe level of infrastructure is in any case considered by business. The contingency of growth and political stability should also be an integral part of such a trade strategy since these twain factors will determine whether a business will grow in foreign market. Through most of the study conducted it has also been proved that vibrant financial schema world(prenominal) sparingal victimization 4 also plays a major portion in encouraging FDI (zedillo, 2005). On trade Gwlad I would include such issues as tax system which benefit inventors e. g. tax allowance on investment.\r\nTo summation foreign income from tourism then issues such as beautiful scenery and variety of wildlife sire to be included. Further more engine room play a major role in ball-shaped market and therefore a mention of the technological exploit and possible furtherance in engineering should be included in the countries marketing strategy as firms currently hope on technology in acting it core business. Case instruction 3 Technology advancement have led countries manage china and Japan to be the most industrialized and leading exporters in the global Market.\r\nConsequently their economy have grown and a country like china with a population higher than the whole of Africa have been able to process its citizen and even offer loans and grant to other nations. Though technological advancement is cite to economic education it has to be matched with good governance and visionary leaders who are able to inspire their peop le to execute new height (Polanski, 2004). In maturation the economic policy there are others sectors which should be considered.\r\nThis includes, health, financial sector which includes among other banks, insurance market, and the capital market and aerospace and self-propelled sectors in the transport industry. Case Study 4 One of the major strength of developing domestic companies is that it protects capital Global economic evolution 5 burden which adversely affects the balance of payment and the interchange rate. Domestic companies mostly employ people from within the country which reduces the level of unemployment. The income stupefyd by domestic firms is usually re invested rachis thereby improving in economic growth.\r\nSome of the other income which is distri entirelyed as dividend to the proprietor join ons the level of aggregate demand and saving levels due to increase in useable income. Where aggregate demand increases business will be forced to produce more go ods which lead to their growth and expansion (McDonnell, 2003). As saving levels increase businesses will have visible(prenominal) capital for investment and with with(predicate) the multiplier effect where investment increase the GDP will also increase therefore accelerating the economic growth of the country.\r\nIf steps are taken to develop domestic companies then they may grow to a level of being multinationals which will generate foreign income to the country. One of the major threats in developing domestic companies is that in case of harsh economic condition they may not withstand and therefore collapse. There are also possibility of political interference in the management and functioning of such firms. Due to the limited origin available it may not be possible to avail all the exigency capital for expansion which means that such business will be run below capacity and there will be under utilization of resources.\r\nFurther more the economy send word grow at a very low rate if only the domestic business are relied upon to accelerate growth. Lack of contender will be another weakness in that business will not improve on core area of performance such as technology therefore products will be of low quality and higher Global economic development 6 price with softness o fence in global market. Where competition lack then there is low level of creativity and creative activity in products and service development therefore the economy will lag seat (Coparosa, 2004).\r\nWhere the country is able to attract foreign direct investment then it is able to improve on technological advancement since such investors transfer technology to the soldiery country. Further more since the country is experiencing a capital rationing this foreign firms do not require any form of financing from government and the funds available could be used to develop other sectors where foreign companies are unwilling to invest. what is more this foreign firm introduces compet ition which forces business to produce goods effectively and efficiently.\r\nThe major threat of encouraging multinationals to invest in the country is that they can kill local industries close in where such firms are not able to argue favorably. Some of the multinational which occupies a greater stake in the economy sometimes dictate or warp the policy made by government to their advantage since where e government croak to comply they threaten to withdraw. One of the main weaknesses of using FDI is the issue of capital flight. to the highest degree usually send the profit generated from its mental process back to it parent keep company which adversely affect the economy.\r\nyet such businesses are able to sustain harsh economic condition and also improve the level of infrastructure in the host country. In using combination strategy the government ensures that domestic firms grow composition at the same time attracting foreign direct investment which steers the economic gr owth. There should be a balance between protecting domestic firms and maintaining Global economic development 7 environment which enables foreign firms to compete fairly with domestic firms (Roca, 1983)\r\nDue to deficit of funds that the country experience and other benefits that accrue from having FDI it is advisable that the country employs a combination of strategy if it aim to achieve faster economic development. Case study 5 In persuading multinationals to develop local contribute chain then the country have to change policies on taxation of this foreign firms. numerals such as tax allowance on investment can encourage such multinational to launch up business to take such advantages of allowance.\r\nAlso policies that streamline the financing system are also important since the financial system is a factor considered by multinational before venturing into any market. To encourage multinational to undertake query and development in the country then the country should have a well designed policy concerning copyright, trade marks or use of intellectual property. Also where commercial services such as advertising, local research firms and professional service are effected and well regulated then multinational can be make to use such services.\r\nFurthermore policies concerning regional integration are important since it assist business to supply it commodity to other international market without barriers to trade both tariff and non tariff therefore improving on it competiveness in the global market. In addition the transport system is necessary for efficient operation of any supply chain therefore policies should be designed to improve such systems. Global economic development 8 CASE contain 6\r\nWhere a country is a member of the EU then there is no obstacle on promiscuous movement of goods, people and capital therefore the country can easily market and export its goods to members countries thereby improving on its balance of payment. Through the European hearty fund then the country will be able to improve on its level of employment thereby rise the standard of living of its citizen. The creation of European investment bank will aid the economic expansion of the country through creation of new resources.\r\nThe EU has also developed a well established system of ensuring that competition is fair in the normal markets which will therefore means that weak members states such as Gwlad are not exploited or taken advantage of by other strong and developed nations. However being such a member of EU then you have to adopt a common custom tariff and common commercial policy towards non members which may therefore reduce the country aggressiveness to participate in the global market.\r\nCountries such as China, brazil-nut tree and Australia are the new fastest suppuration economy in the world hence they provide a ground on which new market can be found. Further more bilateral and multilateral agreement with such country can be more beneficial than join a trading block for a country with a weak economy (godison, 1988). For a country like Gwlad which need to achieve faster economic development it need to develop free trade agreement with this growing economies as they set a better opportunity for growth than a trading block. CASE STUDY 7 Global economic development 9\r\nOne of the merit of having a cluster development policy is having a balanced economy in that you do not allow foreign firm to dominate the local market but also give chance for domestic business to grow and reach a level at which they can compete in the global market . having both local and foreign firm cave in multinational from influencing government policy with threat to with draw since their position will be taken up by local firms. One of the problems inherent in such a cluster development policy is development of policy which attracts foreign entity while at the same time ensuring protection to domestic firms.\r\nThe best option of organizing sector development is having proper(postnominal) policies that take special(prenominal) need of each sector alternatively than general policies which just give a general outlay instead of specific guideline for sector development (madon, 1997). CASE STUDY 8 As the company is ready to employ 30,000 people this will be a great bring up to the economy as it will reduce the level of unemployment and ultimately increase the GDP. However where foreign suppliers are contracted to supply good rather than local suppliers this will lead to loss of business and capital flight from the country.\r\nFurthermore the demand by this firm that the country liars with the host country of these suppliers to request for a tax shimmy may be an added cost to the country as they may in croak ask for other favors which may pine the economy. The government should agree to give research and development grant but not succumb to demand of allowing foreign supplies to be contracted as this will rub most of the benefit generated. Global economic development 10 References Anderson, AT 2007, ‘ create m-services: lessons learned from the developers\r\nperspective,’ Communication of AIS, VOL. 2007, issue 20. Carroll, M 2006, ‘An interview with Prime Minister Lee,’ institutional Investors, vol. 40, issue 9. Caporaso, J 2004,’Dependence, dependency, and power in the global system: a structure and behavioral analysis,’ International Organization, Vol. 32 import 1. Emerging Markets Debt Report 2000, ‘Political risk: Thumbs up for Brazil, Stormy Clime in Vennie,’ Vol. 13 import 4. Godison, N 1988,’capital of the United Kingdom’s place in the global securities market,’ International Affairs, Vol. 64 Issue 4.\r\nMadon, S 1997,’Information-Based Global Economy and Socioeconomic instruction: The Case of Bangalore,’ Information Society, Vol. 13 Issue 3. Melchet, L 2005,’The Age of Environme ntal tie-up? Globalization and Environmental Transformation of metropolitan Cities,’ Development & Change, Vol. 36 Issue 5. Global economic development 11 McDonnell, I & Lecomte 2003,’ Public flavor and the Fight against Poverty,’ DAC Journal, Vol. 4 Issue 2. polenske, K 2004,’ Competition, Collaboration and Cooperation: An Uneasy Triangle in Networks of Firms and Regions,’ Regional Studies, Vol. 38 Issue 9.\r\n'