Country basket

Country basket
See also
Bank for International Settlements International Monetary Fund Death from overwork Total Quality Management Carbon budget Development bank Foreign exchange reserves Global bank Capital restructuring

Country basket is a selection of countries, similar in some conditions, that are analyzed together in order to make the analysis easier. The examples of such basket are:

• G7 group of most developed countries,
• Central and eastern Europe countries (Poland, Czech Republic, Slovakia, Hungary, etc.)
• Asian developing countries
• Central African countries

Country basket makes decisions easier and helps worldwide companies to make decisions on whole baskets, not each country. For example, in case of lower stability of one country in the basket, the financial corporation can withdraw funds not only from that country, but from all countries in the basket.

Such a simplification is cheaper and easier to manage, however it can backfire, as withdrawal or investment in whole basket can lead to losses (exit from profitable market).

G7 group of most developed countries

The G7 group was formed after 1971, when the economy had to deal with the oil crisis and the change in the gold exchange rate. The economic and financial cooperation between countries had to be improved(Smith.G. S., 2011,1). In March 1973, the finance ministers of Germany, France, Britain and the United States created the 'Library Group', six months later the Minister of Japan extended cooperation. In this way, the G5 Group was created. Two years later France and Italy explored the group. The G7 group was formed. During the G7 session, Russia was sometimes a guest. In1997, Russia became an official member of the group. The participants of the association knew each other well. In today's perspectives, joining Russia looks preposterous, but in the past they wanted to spur Russia on transform into a democratic country with an open marketplace. For the group's work, the most important are conversations. Individual countries choose their representatives. They deliberate on economic, financial, security and environment (Smith G. S., 2011,2).

Asian developing countries

Economic growth is closely related to exports between countries: India, Bangladesh, Sri Lanka and Indonesia (Nasreen S., 2011,9). One of the most important topics is progression of the rivarly and branching off export. Asian lands must pursue more broadminded policies to enter into cooperation in developed countries. Sectors that use unprofitable resources should be eliminated. Like that we have chance to play down the commercial risk (Nasreen S., 2011,10).

The ever-growing participation of the Asian economy in world economics suggests analyzing the operation of large corporations. Over the years, many modern models of managing Asian companies have been developed. Audits of the operation of these huge companies are becoming a frequent phenomenon. The European and North American countries are more and more closely meeting the operating conditions of Asian corporations. At the beginning, the experts were a fan of the performance of Japanese and Korean companies. Then the Japanese crisis started talks about changes in management. The Korean market was struggling in the process of reducing shareholders, which was blamed for bad results. In the 1990s, the Asian economic crisis broke out. Specialists looking for solutions wanted to use the "Anglo-American" management model. However, due to the changing market structure, it had to be adapted to the needs of the market and corporations. With time, this method departed and companies started to analyze the internal market more closely. Decade later, the globalization process has made international politics become more important. Maintaining good political relations is a condition for the growth of Asian countries (GlobermanS. , M. W. P. & Shapiro D. M. 2010,2).

Central African countries

Financial growth is a reflection of economic development among others in Central African Republic, Nigeria( A. E. Akinlo, T. Egbetunde 2010, 1). However, in some countries, appropriate policies must be put in place to develop the economy. During this period, the African countries are pursuing the principles of financial cooperation with world markets, but this is a long process. Reforms require many tools and have consequences ( Akinlo A. E. ,Egbetunde T. 2010, 1 ).

Examples of Country basket

1. BRICS: Brazil, Russia, India, China and South Africa*
2. G7: Canada, France, Germany, Italy, Japan, UK, US*
3. The Nordics: Sweden, Norway, Denmark and Finland*
4. The ABCs: Argentina, Brazil and Chile*
5. The Scandinavian Union: Denmark, Norway and Sweden*
6. The Gulf Cooperation Council: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates*
7. The ASEAN: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam*
8. The SAARC: Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka*

Advantages of Country basket

Country baskets offer a great way to analyze global markets and economies. They provide a broad overview of the market dynamics and can be used to compare different countries. Here are some advantages of using country baskets:

• Country baskets allow for easier and faster comparison of multiple countries. By comparing the conditions of countries within a single basket, you can quickly identify trends and patterns. This makes it easier to analyze and draw conclusions.
• Country baskets allow for more accurate analysis. By grouping countries that have similar economic conditions, you can get a more accurate picture of the overall market.
• Country baskets allow you to identify and analyze emerging markets. By analyzing the basket of countries, you can identify which countries have the potential to be the next big market. This allows you to get ahead of the competition.
• Country baskets allow you to compare different countries’ regulations and policies. This can help you understand the different economic environments in different countries and make better decisions.

Limitations of Country basket

A country basket is a selection of countries that have certain similarities and are analyzed together to make the analysis easier. However, this approach can have some limitations:

• It can be difficult to determine which countries should be included in the basket, as some countries may have similar characteristics, but still be quite different in other aspects.
• Country baskets may not accurately reflect the true diversity of the region, as they may exclude important countries or omit particular trends.
• The results of the analysis may be biased, as the sample size may be too small to accurately reflect the entire region.
• Country baskets can also be difficult to maintain, as changes in the region can quickly render the basket outdated.

Other approaches related to Country basket

A Country Basket is a selection of countries that are chosen to be analyzed together due to similarities in certain conditions. Other approaches related to this type of analysis include:

• Regional Analysis: This approach uses an area or region as the basis for analysis, rather than individual countries. This allows for consideration of common features, such as economic, political, cultural, or environmental similarities.
• Thematic Analysis: This approach applies a particular theme, such as health, education, or environment, in order to identify commonalities and differences between countries.
• Comparative Analysis: This approach compares countries in order to identify their differences and similarities. This can be used to explore how countries are responding to certain issues, or to compare a country's performance against another.
• Network Analysis: This approach looks at how countries, or other entities, are connected to each other. It can be used to understand how different countries are interacting, and to identify potential opportunities for collaboration.

In summary, a Country Basket is a selection of countries that are chosen to be analyzed together due to similarities in certain conditions. Other approaches related to this type of analysis include Regional Analysis, Thematic Analysis, Comparative Analysis, and Network Analysis.

References

• Akinlo A. E., Egbetunde T. (2010). Financial Development and Economic Growth: The Experience of 10 Sub-Saharan African Countries Revisited. "The Review of Finance and Banking" Volume 02, Issue 1, Year 2010, Pages 017—028 S print ISSN 2067-2713, online ISSN 2067-3825, p. 1-2.
• Globerman S. ,Peng M. W. & Shapiro D. M., (2010).Corporate governance and Asian companies. Asia Pac J Manag (2011) 28:1–14, p.1-3.
• Nasreen S. (2011)."Export-Growth Linkages In Selected Asian Developing Countries: Evidence From Panel Data Analysis". "Asian Journal of Empirical Research", p. 9-10.
• Smith G. S. (2011).G7 to G8 to G20: Evolution in Global Governance. CIGI G20 Papers | No. 6, May 2011, p. 1-2.
• Williamson, J. (1996, November). The case for a common basket peg for East Asian currencies. In a conference on Exchange Rate Policies in Emerging Asian Countries: Domestic and International Aspects. Association for the Monetary Union of Europe and the Korea Institute of Finance.

Author: Aneta Suder