Chapter 7 Flashcards
What are the 3 different type of economies?
(A.D.E.).
- Advanced economies (rich countries like USA, Canada, Western Europe, Japan, Australia)
- Developing economies (low-income countries with limited industrialization like Bangladesh, Bolivia,).
- Emerging market economies (former developing economies that achieved modernization and economic growth like Mexico, Poland, Turkey, Indonesia).
What are emerging economies?
(Li,Rg countries using El as their primary EoG).
Low-income, rapid growth countries using economic liberalization as their primary engine of growth.
What are the 2 groups of emerging economies?
(DC.TE.).
- Developing countries (Asia, Latin America, Africa, Middle East).
- Transition economies (Central Eastern Europe, Russia, East Asia).
What does the New Global Challengers faces?
A new style of competition not only against rivals in their own league (3 types of economies) but also against a continual stream of newcomers.
What are the benefits of the New Global Challengers? (4).
(RGM.LCL.TG.COE.).
- Rapidly growing markets, some of which are large (China, Brazil, Mexico, India).
- Low-cost labor.
- Training grounds for competing with global incumbents.
- Complex operating environments, which produce capable firms.
Who are in the BRICS?
Brazil, Russia, China, South Africa.
What is the problem with BRICS?
Not one of the countries have the same “economies” regarding the scale of their international impact and RGDP growth.
- Russia and South Africa are the most similar countries (it gives an idea).
What are the 2 development approaches?
(EOS.IOS.).
- Export Oriented Strategy (Open)…they grow and develop by export (Canada)…sell more then buy.
- Import Oriented Strategy (Close)…when the government wants to make everything themselves for their own consumption (Russia).
Who are the members of the Asian Tigers (ASEAN-4)?
(HK.T.S.SK.).
Hong Kong
Taiwan
Singapore
South Korea
Which development approach did the Asian Tigers (ASEAN-4) use?
Export Oriented Strategy.
How do we explain the economics success of the Asian Tigers?
(2 main school of thought)
- Neo-Liberal Approach (Washington Consensus = Free Market Approach = The hard loan policy by the IMF).
(Market Freedom) - The Govern Market Approach.
(Political Freedom).
What is the Neo-Liberal Approach (Washington Consensus)? (5).
(AFDI.BMS.RoSL.EoE.OCE.).
- They (IMF, WB, USTD) try to redirect the developing countries when in crises, who borrowed money from one of these institutions, to accept FDIs from develop countries.
- It brings macroeconomic stability by lowering inflation, by cutting government spending (welfare), and redesign fiscal policies (devalue their currency).
- The role of the state is limited to let the market operate freely (deregulation and privatization).
- It emphasis on export.
- It opens the country’s economy to international competition (normally destroys local industries).
What is the Govern Market Approach? (4).
(G.EOS.SA.CL.).
- Governments set their own agendas.
- It designs their activities on export-oriented strategy and protects domestic market from foreigners.
(However, it opens to FDIs, but only if these FDIs are to export goods and services. Moreover, it doesn’t allow FDIs to sell what they are making within their economy.) - State autonomy with regard to public pressure or interest group.
- Close links between government, banks, and industry (corporatism).
What was the 3 forces that played a role in the move towards a reform for India?
- The fall of the USSR in 1991.
- Other South East Asian countries were having success with reforms.
- A financial crisis had developed as a result of heavy borrowing by the government.
How can countries like India move towards economic reforms? (4).
(DoI.EoRP.MELGP.DoRoT&FI.).
- De-nationalization of industries.
- Elimination of regulatory process that interfered with competition.
- Move towards export led growth policies.
- Dismantling of restrictions on trade and foreign investment.
