Development Strategies,

Foreign Investments

andForeign Aid

Report by: Rovie Detruz

STRATEGYSTRATEGY

From Greek “strategia” meaning “command From Greek “strategia” meaning “command of a general”of a general”

Strategies give overall directionStrategies give overall direction

Economic Development StrategyEconomic Development StrategyCategoriesCategories

Monetary StrategyMonetary Strategy

Fiscal StrategyFiscal Strategy

Commercial StrategyCommercial Strategy

Monetary StrategyMonetary Strategy

Uses monetary policy to correct a Uses monetary policy to correct a malfunctioning system. malfunctioning system.

Techniques used within this strategy include Techniques used within this strategy include adjusting debt interest rates, currency exchange adjusting debt interest rates, currency exchange rates, and the price of gold.rates, and the price of gold.

Fiscal StrategyFiscal Strategy

Uses a reallocation of government resources to Uses a reallocation of government resources to positively affect a developing or ailing economy.positively affect a developing or ailing economy.

Changes in this type of strategy can influence Changes in this type of strategy can influence the tax levels paid by people and businesses and the tax levels paid by people and businesses and the funding and existence of government the funding and existence of government facilities and programs. facilities and programs.

Commercial StrategyCommercial Strategy

Make changes to the way a country deals with Make changes to the way a country deals with other countries, mainly in a financial sense.other countries, mainly in a financial sense.

Include increasing or reducing aid to countries Include increasing or reducing aid to countries in need of economic assistance or changing in need of economic assistance or changing policies, costs, and rules relating to international policies, costs, and rules relating to international trade. trade.

Foreign InvestmentsForeign Investments

When a company or individual from one When a company or individual from one nation invests in assets or ownership stakes nation invests in assets or ownership stakes of a company based in another nation.of a company based in another nation.

Foreign Direct Foreign Direct InvestmentsInvestments

Occur when a company invests in a business Occur when a company invests in a business that is located in another country.that is located in another country.

The company that is investing must have no The company that is investing must have no less than 10% of the shares belonging to the less than 10% of the shares belonging to the foreign company.foreign company.

Foreign Portfolio Foreign Portfolio InvetmentsInvetments

Occur when foreign investments are made by a Occur when foreign investments are made by a company.company.

More temporaryMore temporary

Stocks and bonds are normally tradedStocks and bonds are normally traded

Official FlowsOfficial Flows

Occurs between nations instead of between Occurs between nations instead of between companiescompanies

A more developed or economically prosperous A more developed or economically prosperous nation will invest money in a nation that is less nation will invest money in a nation that is less developed.developed.

Commercial LoansCommercial Loans

Normally occurs in the form of a bank loan.Normally occurs in the form of a bank loan.

Occur between nations or between businesses Occur between nations or between businesses that are in different countries.that are in different countries.

Foreign AidForeign Aid

There are numerous forms of aid, from There are numerous forms of aid, from humanitarian emergency assistance, to food aid, humanitarian emergency assistance, to food aid, military assistance, etc.military assistance, etc.

Development aid has long been recognized as Development aid has long been recognized as crucial to help poor developing nations grow out crucial to help poor developing nations grow out of poverty.of poverty.