RUSSIAN STATE PEDAGOGICAL UNIVERSITY BY HERZEN
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Economic faculty
Department of applied economy
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Course work on theme:
ATTACTION OF FOREIGN INFLOWS IN EAST ASIA
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Student of the third course
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Superviser of studies,
Candidate of economic science,
Senior lecturer
Linkov Alexei Yakovlevich
St. Petersburg
2000 y.
Plan
1. Integration, globalization and economic openness-basical principles in attraction of capital inflows
2. Macroeconomic considerations
3. Private investment:
a) Commercial banks
b) Foreign direct portfolio investment
4. Problems of official investment and managing foreign assets liabilities
5. Positive benefits from capital inflows
International economic organizations (IEOs), such as the World Bank, the World Trade Organization (WTO), and the International Monetary Fund (IMF), have bun promoting economic openness and integration, centered on free trade and capital flows. as not a complement but a substitute for national development strategy.
Investment efforts in South Korea and Taiwan were underwritten by active government strategy, including subsidies, promotion, tax incentives, socialization of risk, and establishment of public enterprises. Singapore's economic growth was also predicated on a high investment strategy implemented by the government, even though Singapore relied relatively more on foreign investors than the other East Asian countries did.
Regionalism is likely to remain an important factor in global economic relations in the foreseeable future, as countries continue to strive for greater access to foreign markets and for solutions to economic problems and disputes that in many cases might be resolved only through regional cooperation.
Managing large and perhaps variable capital inflows-or, more aptly, managing the economy in such a manner as to effectively and productively absorb these flows-is a major challenge for East Asian countries. Each country has embarked in its own financial markets, following initiatives in trade liberalization. Until recently, the bulk of capital inflows in East Asia has been FDI and project-related lending, both official and private. At the relativly lower levels of a decade ago, these flows could be readily accomodated. The overall impact of foreign investment on growth and exports has been very positive. As the capital flows have increased, they have created macroeconomic pressures on exchange rates, domestic absorption, investment policies, and the capacities of domestic capital markets. The more recent expansion of portfolio investment imp...
