This is a global business course. please pick a topic and try to turn in a two-p

Question

This is a global business course. please pick a topic and try to turn in a two-page description of the main issues involved in this current event.

1. Current Event Paper

Describe in 2 lines why this topic (less than one year old) is important for global business.

As per the course outline:

A topic of current interest in global business such as “Offshoring in the Global Economy”, “Impact of Oil Prices on World Business,” “The Yuan Devalued,” etc.

Current Event papers must deal with international business issues. Issues of political, military, cultural and other nature are only acceptable if there is a direct and evident international business implication clearly explained in the paper. Papers lacking such connection will receive a reduced score.

Explanation / Answer

Globalization opens the way for some of the developing countries, such as India, to grow at a rapid pace by adopting effective policies and reforming plans parallel to advance nations. However, some of the nations are still lagging behind. The reason behind the lackluster administration of these countries is an increase in population. This further leads to a drop in economic growth and low per capita income and GDP. Increase in per capita income and the living standards emanating from the accumulation of physical and social capital and advances in productivity and technology.

Studies reveal that approximately 60-70 percent of per capita growth in developing countries is an outcome of an increase in physical capital; 12-20 percent is due to rise inefficient and skilled human capital, and the rest 10-30 percent is given to improved productivity.

The first round is to identify the flaws in globalization, especially in connection with financial globalization. The unfavorable effects of financial globalization on macroeconomic volatility and variation should be countered. Among policymakers today, there is enhanced acceptance of capital restrictions to restrict foreign capital flows that are seen as likely to lead to—or aggregate—a financial crisis.

The policies and reforms adopted by countries to increase the pace of economic growth and enter in the mainframe of global economic development are as follows:

(a) Macroeconomic Stability:

It means that the economy of a nation must be stable and in control regarding the inflation rate, exchange rates, foreign exchange markets, and balance of payment, trade, and fiscal deficits. Macroeconomic stability in a country attracts foreign investors and traders and creates a favorable condition for investments and saving.

(b) Outward-oriented Policies:

In the context of policies encouraging free trade or open market economy. These policies boost unhindered inward and outward movement of goods and services across the border. As a result, industries in the local market get a chance to compete with foreign enterprises, which force them to innovate and improve efficiency and reap the benefits of economies of scale and improved constituents of production.

(c) Government Institutions:

Imply that some reliable and valid government institutions can be put to encourage good governance. The government systems must be such that they bring more and more foreign investors in the country. The decline in trade barriers and physical and monetary support to promote domestic organizations to go global improve the country’s economic condition.

(d) Highly skilled Human Resource:

States those nations with a large population have a vast pool of human resource, which needs to be changed into the skilled workforce. Therefore, governments, lagging back the global economic development, must promote education, training, and research and development departments. This helps in developing the existing human resources to extremely skilled and knowledgeable resources to enhance productivity.

(e) External Debt Management:

Emphasizes that judicious use of foreign funds and aids provided to developing nations can lead to the systematic growth of countries. Also, the allocation of satisfactory resources is necessary for the social, economic, and sustainable improvement of the nation.

Apart from measures mentioned above:

The developed nations should also make a necessary contribution to integrate countries, which are lagging back, with the global economy. Some of the actions to be taken by advanced countries are as follows:

(g) Trade Promotion:

States that the developed nations must reduce or eliminate the quota or other limitations on the import of items from countries lingering behind the economic development. The developed countries should assist underdeveloped nations to export processed goods instead of primary products.

The burgeoning demands of the processed foods, such as canned fruit pulps, vegetables, and non-vegetable items, in advanced countries, increase the extent of international trade. The Gulf nations and western nations are quickly becoming a vast market for these items.

(h) In-flow of Private Capital:

Implies that the advanced countries should encourage FDI in lower income countries. Technology shift and steady financial (lows should be given to help domestic industries of weak nations to meet the current development needs and demands.

(i) Debt Relief:

Infers that the debt relief and financial assistance help lower-income countries to develop their economic condition and influence more development programs. Therefore, more debt relief can be enhanced with the increased level of new financial support. To summarize, government policies and suggested actions can assist the emerging nations to catch up with the global economy more rapidly.

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