case studies on globalization & local development stefania scuderi - italy roney parente -...
TRANSCRIPT
Case studies on globalization Case studies on globalization & local development& local development
Stefania Scuderi - Italy
Roney Parente - Brazil
Ke Yu - China
IndexIndex
Overview of national responses to make globalization work for human development
Case studies– Brazil-Norway– Foreign and local investment in Mauritius
National responses to make globalization National responses to make globalization work for human developmentwork for human development
Globalization has opened wide the door to opportunities in the world’s markets. But markets can go too fast and squeeze the non-market activities in basically three different ways:– Fiscal squeeze– Time squeeze– Incentive squeeze
What can countries do to make What can countries do to make globalization work human development?globalization work human development?
– Capture global opportunities in trade, capital flows and migration
– Protect people against globalization vulnerabilities– Overcome the resources squeeze– Generate pro-poor growth– Create alliance of all actors– Formulate new strategies for managing new
issues
Capturing new global opportunitiesCapturing new global opportunities
– Enhancing trade– Attracting capital– Getting the most from migration
Enhancing tradeEnhancing trade
Countries can accelerate growth through trade liberalization if they have sound macro economic management, good infrastructure and social service and strong governance. They need to:
– Translate trade and growth into human development
– Maintaining labour and environmental standards
Attracting capitalAttracting capital
Attracting long-term capital flows Managing the volatility of short term capital
Getting the most from migrationGetting the most from migration
Egypt managed to get $4.7 billion in remittances in 1995 – close to the $6 billion it earned from Suez canal receipts, oil exports and tourism combined
The Philippines received $7 billlion in remittances in 1996
Mexico $4 billion
Protecting people against Protecting people against vulnerabilitiesvulnerabilities
Coping with changing labour marketHow to overcome vulnerabilities in the labour
markets?– Providing education and training– Supporting the unemployed in finding jobs– Maintaining workers benefits and rights– Managing transitional labour markets
Managing the social costs of financial crises
Overcoming the resources squeezeOvercoming the resources squeeze
The fiscal resource base of developing countries is been squeezed in four ways:– Trade liberalization– Globalization of the tax base– Tax competition– Growth of the underground economy
To cope with:– Generate more revenue from direct taxes– Introduce a value added tax– Make tax laws simple– Restructure expanditures
Generating pro-poor growthGenerating pro-poor growth
Creating effective alliances of Creating effective alliances of national actorsnational actors
Formulating strategies for emerging Formulating strategies for emerging new issuesnew issues
Brazil-NorwayBrazil-Norway
Economic main characteristics Market characteristics Special growth sectors Prospects for Norwegian export industry in
Brazil Norway-Brazil Trade
MMain ain eeconomic characteristicsconomic characteristics
Negative facts:– World economy lower growth in 2001– Argentina’s economic crisis– Brazilian’s energy crisis
Positive facts:– GNP: 2000 increased by 4,5%– GNP: 2001 increased by 2,7%– Brazilian industry index increased by 2,5%
MMain ain eeconomic characteristicsconomic characteristics
Real-plan was introduced 1994 Hyperinflation and minimal economic
predictability – 1000% to 10% Inflation 6% in 2000 and 8% 2001 Possibility to plan the economy
MMain ain eeconomic characteristicsconomic characteristics
Foreign investment in Brazil (American dollars):– In 1993, only 1 billion– In 1999, 30 billion– In 2000, 32 billion– In 2001, 23 billion
In 1999, China was the only country to receive more foreign investments than Brazil
In 1994, introduced Real-plan - $1,00 = R$1,00 In 1999, devaluation of the real $1,00 = R$2,35 – Jan/2002
MarketMarket characteristics characteristics
World’s fifth largest population – 167,5 million Large market opportunities 40 million have a buying power equal to or higher
than the Norwegian average National production directed to domestic market Emphasize the importance of increasing the export Mercosul – FTAA (ALCA) Complicated rules for import and duties, taxes and
customs restrictions
Special growth Special growth ssectorsectors
The oil and gas related industry– Growing quickly on the Brazilian market– Petrobras does no longer have the monopoly– Norwegian Statoil received concession in 2001
Telecommunication market– Large boom in the IKT sector is now over– Internet and mobile users have exploded the last 2
years– Demand in computer based solutions
Special growth Special growth ssectorsectors
Electricity sector– Will grow fast in the near future– New power station, improvement and expansions– Increase in the demand of energy saving solutions
and efficient equipment Other sectors
– Shipbuilding industry– Agriculture– Extraction and refinement of minerals– Textile industry
Prospects for Norwegian export Prospects for Norwegian export industry in Brazilindustry in Brazil
Norwegian export to Brazil representes 1% of Norway’s total export
Fish export will continue dominating Norwegian export to Brazil Suppliers of equipment and services within the oil and gas
industry Brazil chose the European GSM-model rather than the
American one, Norwegian exporters have an advantage Environmentally friendly solutions market Equipment and parts for use in hydro-electric power stations
and transmission lines
Trade Norway-Trade Norway-BrazilBrazil
Brasil is Norway’s most important partner in South-America
Brazilian market represents only 0,7% of Norway’s total export in 2001
in 2000 the export of dried codfish represented 61% of Norway’s total export to Brazil
Machines and telecommunications equipment came in on 2nd and 3rd place, each with less than 10% of the total export
Trade Norway-Trade Norway-BrazilBrazil
2000 2001 %
Import from Brazil
2332,7 million crowns
2291,6 million crowns
-1,8
Export to Brazil
1488,3 million crowns
1564,6 million crowns
5,1
Trade Norway-Trade Norway-BrazilBrazil
Brazil entered the 21st century with the world’s 9th largest economy
Facts that suggest that more Norwegian companies should be able to participate actively and in the long-term in the Brazilian market The size of the market Stable democratic governing Wish for more foreign “actors” in the market
MauritiusMauritius
Background of Society Background of Economy History of Economic development Factors of foreign investor’s concern Factors of local investor’s concern Linkage between foreign and local investors Challenges
Background of SocietyBackground of Society
impact of ethnic,religious, linguistic fragmentation– Majority - Indian: Hindu, Muslim,Christians– Franco-Martitians – Chinese: Christians and Buddhists– Africans
Background of EconomyBackground of Economy
dependent on sugar– 99% of export – 70% employment– 1/3 of GDP– cane field - 90% arable land
History of History of eeconomic developmentconomic development
Independence 1968, introduced initial import subsitution industrialization policy
1970 export promotion zone legislation passed, but few investor in 1970s
1979-1981 crisis, down of sugar prices, escalation of oil price, political tensions, cyclone destroyed sugar crop and other infrastructure - fall off in new investment;
1982 with change in government, adopted outward-oriented strategy to export-led growth – “export or die”
Early 80’s, foreign investment took off as a consequence
FFactors of foreign investor’s concernactors of foreign investor’s concern
Negative:– Inconveniences by location– Lack of natural resources – Small domestic market – Uncertain sociopolitical future
FFactors of foreign investor’s concernactors of foreign investor’s concern
Positive (pull):– Political stability and policy consistency– Sound institutions– Cheap, trainable labor force– Good economic management– Infrastructure– Preferential market access to other market– Multi-ethnic/lingual provide friendly environment
FFactors of foreign investor’s concernactors of foreign investor’s concern
Positive (push) - quick response to external global events– Sino-British agreement over Hong Kong– Multifiber agreement– High labor cost in Hong Kong
FFactors of local investor’s concernactors of local investor’s concern
How to deal with lack of land? Take advantage of tax-free assets offered
by EPZ and government Take advantage of local bank’s attractive
loan rates Take advantage of local population linkage
with Europe, India, and China Potential in tourism
Linkage between foreign and local Linkage between foreign and local investorsinvestors
Foreign cater for haven for capital, quota-free access to markets, but they also bring technical manufacturing knowledge, factory management know-how, international standards, knowledge of customers tastes and orders, training
Local bring land, management capability and capital Global sourcing Synergies between industries, local commerce,
services and tourism - rapid GDP growth; spread from sugar industry to other economic activity
ChallengesChallenges
Problem facing today - more expensive labor New approaches:
– Increase productivity with new tech, management– Branch out to neighboring as for basic production
while keeping marketing, design and financial management;
– New niches-high tech, off-shore business and Freeport services
ReferenceReference
http://www.nhh.no/geo/302/reading/Chapter4.pdf http://www.exportnet.ntc.no/ http://www.eagerproject.com/FLIresearch.pdf
Thank you!Thank you!