Professional Documents
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Movements
International capital movements
Private capital
funds of private firms, banks and other non-state organizations.
In the form of:
Investment
commercial loans
interbank crediting
International capital movements
Business capital
funds that are directly or indirectly invested in the production for profit earning.
Loan capital
funds that are provided to a borrower to obtain a given percentage.
International capital movements
By terms of investment:
Short-term capital
capital investment for less than one year
Direct investment
capital investment in order to acquire control over the object of allocation of capital.
Portfolio investment
capital investment in foreign securities without the right of control over the investment
object.
Foreign Direct Investment
Foreign direct investment (FDI) has a special place among the forms of
international capital movements.
The factors that affect the growth of foreign direct investment and make
proactive growth of FDI compared to the growth of the world trade:
a growing role of TNCs
integration of production, evolution towards the international production
economic policies of the industrialized countries to support economic growth and
employment
the trend of the developing countries and countries with economies in transition to
overcome the crisis of the economy
environmental factors that encourage the developed countries to transfer harmful
production into the developing countries.
may be the achievement of certain political objectives
Foreign Direct Investment
Marketing factors
market size and growth
a tend to hold a market segment
a tend to succeed in export of parent company
the need to maintain close contact with customers
dissatisfaction with the existing state of market
export base
following the competition
Foreign Direct Investment
Trade restrictions
trade barriers
preference of domestic goods by the local consumers
Investment climate
the overall attitude to foreign investment
political stability
restrictions in the ownership
exchange rates adjustment
stability of foreign currency
the structure of taxes
good knowledge of the country
Foreign Direct Investment
Cost factors
a desire to be closer to the sources of supply
availability of labor resources
availability of raw materials
availability of capital and technology
low-cost labor
low transport costs
financial and other incentives offered by the government
more favorable price levels
General factors
expectation of high profits
Foreign Direct Investment
The data analysis form 10 fundamental factors to assess the potential of the country to act as
host FDI or so-called competitive potential of the country:
dynamics of the economy (economic potential);
production capacity of industry;
dynamics of the market;
financial support of the government;
human capital;
prestige of the state;
availability of raw materials;
the orientation to external markets (export potential);
innovation potential;
social stability.
Foreign Direct Investment
Losses of FDI is
to workers of an investing country, as FDI means exports of workplaces
to competing firms in the receiving country
to taxpayers of an investing country
The consequences of foreign direct
investments
a receiving country also generally wins, because the benefits for workers and
other categories of persons are more than the losses to investors of the receiving
country who are forced to compete with firms that have technological,
managerial and other advantages
The Nature of Portfolio Investment
International portfolio investment is a capital investment in foreign securities, giving an investor no right to
control the object of investment, but giving only a priority right to receive income according to the purchased
share of the portfolio of the investment object
Includes the following:
shares;
debt securities:
bonds, promissory notes, loan notes,
money market instruments:
treasury bills;
deposit certificates of a bank- is a savings certificate entitling the bearer to receive
interest
banker acceptances - A short-term debt instrument issued by a firm that is guaranteed
by a commercial bank
financial derivatives.
International Loan Capital Flows
It should be noted that the International Monetary Fund and the World Bank are not only the
largest creditors, but also coordinators of international crediting.
International Loan Capital Flows
For the purpose intended, international loans are divided into the
following:
Production credits for the development of national economy
non-production credits to provide the government
International labor migration covers the whole world: both the development
part and the underdeveloped periphery.
More than half of migrants come from developing countries and countries with
economies in transition.
The Causes of International Labor
Migration
Caused by:
a scientific and technological revolution
monopolization of the international markets of labor and capital
internationalization and integration processes
For modern European migrations such directions are characteristic: from less
developed countries of Southern and Eastern Europe (Greece, Spain, Turkey,
Poland, Hungary, etc.) to the advanced countries of Western and Northern
Europe (France, England, Germany, Sweden, etc.); from the countries of North
Africa, India, Pakistan to the West European labor market; labor movements
from one advanced country to another.
The important centre of gravity of labor is Australia.
The area of Persian Gulf became new point of concentration of international
groups of labor, where in 1975 the aggregate number of nonlocal population
in 6 countries (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United
Arab Emirates)
On the African continent the centers of gravity are the countries of Southern
and Central Africa. The aggregate number of migrants in all countries of Africa
reaches 6 million people
The Modern Centers of International
Labor Migration
Along with Western Europe, for last two decades the new centers
of gravity of foreign workers reflecting labor migration from one
developing country to another, moving of foreign labor from more
developed to less developed countries, which in general was not
characteristic for interstate migration in the past. These include, in
the first place, the new industrial countries of Asian-Pacific region.
And in Latin America they are Argentina, Venezuela, Brazil.
The largest direction of migration in the world is the Mexico - United
States one: in 2011 the number of migrants amounted to 11.6
million people. The next ones by the volume are: Russia - Ukraine,
Ukraine - Russia, Bangladesh - India; in these directions, many
indigenous people were migrants without moving to other
countries, as a result of the establishment of new state borders
The Modern Centers of International
Labor Migration
Structure of labor, which migrates to industrially developed countries and between the
developed countries, is characterized by two moments.
The first one - the necessity of a high share of the highly skilled and scientific personnel for
development of new directions of scientific and technical progress. Industrially
developed countries stimulate such moving of labor with the right of reception of the
status of the constant resident. So, the share of foreigners among engineers in the USA is
over 10 %, doctors over 20 %. The brain drain in the USA occurs from both the
developing countries and the countries with economies in transition. Within the EU the
highly-skilled personnel concentrates in the most developed countries.
The second one: there is a considerable share of labor for branches with physically heavy,
low qualification and unattractive kinds of work. For example, in France emigrants make
25 % of all occupied in building, 1/3 in motor industry. In Belgium they make half of all
miners, in Switzerland 40 % of building workers.
The consequences of International
Labor Migration