Difference between revisions of "Country basket"

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Latest revision as of 07:49, 14 July 2019

Country basket
See also


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[edit]

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 a 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[edit]

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 eleminated. 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[edit]

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 ).

References[edit]

Author: Aneta Suder