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МИНИСТЕРСТВО ОБРАЗОВАНИЯ И НАУКИ РОССИЙСКОЙ ФЕДЕРАЦИИ
Федеральное государственное автономное образовательное учреждение
высшего профессионального образования
САНКТ-ПЕТЕРБУРГСКИЙ ГОСУДАРСТВЕННЫЙ УНИВЕРСИТЕТ
АЭРОКОСМИЧЕСКОГО ПРИБОРОСТРОЕНИЯ
О. В. Акимова
ВЗЛЕТЫ И ПАДЕНИЯ
МИРОВОЙ ЭКОНОМИКИ
Часть II
Международное разделение труда.
Переход к рыночной экономике
Учебное пособие
по английскому языку
Санкт-Петербург
2012
УДК 339.9
ББК 65.5
А39
Рецензенты:
кандидат филологических наук, доцент
кафедры языковой подготовки Е. В. Гладкова (ВШНИ);
кандидат филологических наук, доцент
кафедры международных отношений Е. А. Рудая (ГУАП)
Утверждено
редакционно-издательским советом университета
в качестве учебного пособия
Акимова, О. В.
А39 Взлеты и падения мировой экономики: учеб. пособие: в 2 ч. Ч.
II: Международное разделение труда. Переход к рыночной
экономике / О. В. Акимова. – СПб.: ГУАП, 2012. – 84 с.
ISBN 978-5-8088-0765-5
Учебное пособие предназначено для студентов III–IV
курсов специальности «Мировая экономика» направления
«Экономика» профиля «Мировая экономика».
Пособие представляет собой вторую часть учебного
пособия «Ups and Downs of the World Economy», является
профессионально ориентированным и охватывает широкий
круг вопросов не только мировой экономики, но и общие
проблемы интегрированной коммуникации.
УДК339.9
ББК 65.5
ISBN 978-5-8088-0765-5
© О. В. Акимова, 2012
© Санкт­Петербургский государственный
университет аэрокосмического
приборостроения (ГУАП), 2012
CONTENTS
ПРЕДИСЛОВИЕ ......................................................................................................4
I. INTERNATIONAL DIVISION OF LABOR ........................................................5
Insights into History ...............................................................................................5
The division-of-labor phenomenon ........................................................................8
The Industrial revolution ......................................................................................11
International specialization ...................................................................................15
TEXTS .....................................................................................................................23
The Economy and Business in Britain .................................................................23
Gas Ring ...............................................................................................................30
Australia in Business ............................................................................................35
II. TRANSITION TO THE MARKET ECONOMY ..............................................44
World Market .......................................................................................................44
Protectionism ........................................................................................................45
Trade liberalization ...............................................................................................49
Financial markets ..................................................................................................51
New Zealand Economy ........................................................................................54
Banking Interdependence .....................................................................................54
The transition economy countries ........................................................................61
Tough budgetary discipline – the core of the market economy ...........................65
TEXTS .....................................................................................................................67
How China runs the world economy ....................................................................67
Strengths & Weaknesses of ..................................................................................73
Canada’s economy ................................................................................................73
Glossary of business terms ...................................................................................80
Литература ..............................................................................................................83
3
ПРЕДИСЛОВИЕ
Сейчас ни одна страна на международной арене уже не может более
оставаться в языковой изоляции и вынуждена использовать иностранные
языки. По мнению ученых, минимальное количество языков, которыми
должен владеть человек в XXI веке, должно быть два-три. Ведущим в мире
языком международного общения, безусловно, остается английский.
Россия
всегда
была
многоэтнической,
многокультурной,
многорелигиозной и многоязычной страной. Поэтому правомерно будет
обозначить современное общество поликультурным по содержанию, формам
и способам функционирования культуры. В поликультурном обществе с
особой остротой возникают вопросы о национальных особенностях
образования.
Происходящие сегодня коренные изменения во всех областях жизни
общества меняют парадигму образования, которая формулируется так:
«Образование – это часть культуры».
Владение хотя бы одним иностранным языком жизненно важно для
современного специалиста, выступающего на международной арене: на
конференциях, встречах, выставках, ярмарках, семинарах, презентациях – и
демонстрирующего свои знания всему миру.
Целью данного пособия по английскому языку является
совершенствование
коммуникативных
навыков
студентов
в
профессиональной сфере, а также помощь в овладении знаниями, умениями
и навыками в контексте единой общечеловеческой культуры, поскольку
сегодня каждый человек органически вписан в сеть массовых коммуникаций,
становится носителем не только набора элементов национальных, но и
региональных субкультур.
Пособие состоит из двух разделов, каждый из которых содержит
теоретический
и
практический
материалы,
соответствующие
международным стандартам, а также глоссарий и цикл упражнений
коммуникативной направленности, и может быть использовано как
студентами экономических вузов и факультетов, так и специалистами в
области экономики и менеджмента, владеющих базовыми знаниями
английского языка.
4
I. INTERNATIONAL DIVISION OF LABOR
“Where the whole man is involved there is no work.
Work begins with the division of labor.”
(Marshall Mcluchan)
Insights into History
Social division of labor
In the course of the development of ancient society there appeared,
alongside with hunting, fishing, gathering and craft, the new branches of
social economy – agriculture and cattle-breeding. For several thousand
years agriculture was based on the primitive labor tools, such as sticks,
mattocks and flint blades. People spent a lot of energy during cultivation
of land and harvesting. All the land was in common (collective)
ownership of all tribe, and agriculture was based on the collective labor.
The work of the farmers was exhausting – it was not man’s need, but
only severe economic necessity.
The experience of ancient farmers proved that individual (family)
agriculture is more efficient than the collective (tribal) one. It can be
explained by the action of the economic law of correspondence of the
scale of production to the level of operational division of labor, i.e. the
size of the farm with primitive agricultural tools and operational division
of agricultural labor were interdependent. Therefore, the transition from
tribal farm to family farm was reasonable: the higher was the level of the
operational division of labor, the larger should be the amount of
production, a part of which could regularly be exchanged on the
commodity market. The expansion of agriculture caused the
intensification of natural-commodity exchange that led to agricultural
specialization: grain-farming, gardening, vine-growing, horticulture.
Agriculture became the important branch of the economy of those days.
Thus, the transition from collective to individual farm (and origin of
cattle-breeding) still more increased the social division of labor.
One and the same man could not fulfill different kinds of activity. If
one and the same man was occupied by many kinds of work, then he had
to spend much time for transition from one work to another. Moreover,
he couldn’t master many professions well enough, so he would do all
these works slowly, with low labor productivity and quality of products.
Therefore, the social (branch) division of labor became necessary. One
5
worker was involved into one kind of labor; the rest workers were
occupied by other activities. Then the development of naturalcommodity exchange gave way to the money-commodity exchange.
This process expanded not only “in depth”, within the frameworks of
local commodity market that had formed before and united all clan
communities of the tribe, but also “in breadth”, involving people of
different tribes into commodity exchange with each other. The social
division of labor caused the rocketing of labor productivity and trade. In
the course of time, the regular trade connection established gradually
between neighboring tribes. These regular economic ties enhanced
further specialization of social production, growth of the branch division
of labor and, consequently, strengthen and broaden labor productivity.
By means of trade exchange, people got many of such labor products
that they couldn’t produce in their tribe. At the same time hunting,
fishing and gathering continued to develop; transport, management and
commerce – came into being.
However, because of numerous conflicts that took place from time
to time between different tribes, these economic connections were often
broken, that led to the reduction of trade, difficulties in sale of
commodities by manufacturers, especially by craftsmen who produced
things mainly for the market, and, therefore, depended on tradeeconomic relations with neighboring tribes. All these factors forced the
members of the tribes to unite into larger units that gradually (with the
development and specialization of agriculture, craft, transport,
commerce) began to transform to nationalities. In the end, the tribe
became obsolete; the territorial division appeared, although tribes
continued to exist for a long time (in some countries) – up to the slaveholding social revolution. The slavery was economically feasible in
agricultural production at non-irrigated agriculture without irrigation
facilities, as it was the case in Ancient Greece and Rome, but it was thus
much ineffective at irrigated agricultures like in the countries of Ancient
East.
The civilized nations, according to the history, were those that dwelt
round the coast of the Mediterranean Sea – the greatest inlet that is
known in the world. The Mediterranean Sea had neither tides nor,
consequently, any waves except those that were caused by the wind
only. It was extremely favorable to the infant navigation of the world
due to the smoothness of its surface and the proximity of its neighboring
shores, when, from their ignorance of the compass, men were afraid to
6
quit the view of the coast and plunge into the boisterous waves of the
ocean. To sail out of the Straits of Gibraltar and pass beyond the pillar of
Hercules was considered as a wonderful and dangerous exploit of
navigation. For a long time the Phoenicians and Carthaginians, the most
skilful navigators and shipbuilders of those old times, were the only ones
who dared to cross the ocean. Goods or people from other lands were
rare and came from either travelers, or traders, or armies. A Ming
Dynasty Chinese emperor built a vast fleet that sailed as far as East
Africa, returning with zebras, giraffes, and other wild animals. Armies
returned home with plundered goods and slaves from the conquered
lands. However, danger and uncertainty of long trips limited exchanges,
and most people remained untouched by events in other lands.
Of all the countries on the coast of the Mediterranean Sea, Egypt
seems to have been the first in which both agriculture and manufactures
were cultivated and improved to any considerable degree. The Nile
carried commerce into different parts of the country – from the big
towns to the distant villages and farmlands. The extent of this inland
navigation was probably one of the main causes of the early prosperity
of Egypt. In Bengal the Ganges and several other great rivers form a
great number of navigable canals in the same manner as the Nile does in
Egypt.
The improvements in agriculture and manufactures seem likewise to
have been of very great antiquity in the provinces of Bengal and in the
East Indies. In the Eastern provinces of China too, several great rivers
form, by their different branches, a multitude of canals, and by
communicating with one another afford an inland navigation much more
extensive than that either of the Nile or the Ganges, or perhaps than both
of them taken together. It is remarkable that neither the ancient
Egyptians, nor the Indians, nor the Chinese, encouraged foreign
commerce but derived their great wealth from this inland navigation.
During the early fifteenth century, most economic activity in the
world was highly localized. People ate, drank, worked, and used
products that came from close to home. It was Columbus who in 1492
started the transformation of who does what in which part of the world
by beginning the large-scale extraction of gold and other riches of the
Indies when he sailed into the Western Hemisphere in a mistaken quest
for an eastern route.
During the following four – five centuries the rich states: England,
France, Spain, Portugal, Belgium, Germany, the Netherlands, Italy and
7
later the USA and Japan – rearranged economic activity in the world:
Persia, India, the Philippines, and other lands had quite advanced textile
centers that were undercut by colonial trade. Cheaper manufactured
products from Europe flooded into the colonies which, in turn, were
pressed to shift more and more land and people to the production of
minerals and agricultural products for export.
Soon after completion of the bourgeois social revolution in Western
Europe, the trade-capitalist states began to accomplish the tradeeconomic expansion to many countries. As industry flourished in
Europe, so too did the demand for copper, tin, and other minerals from
Latin America and Africa. To meet the requirements of England’s textile
mills for cotton and other natural fibers, and the European demand for
the luxuries of sugar, coffee, cocoa, tea, and bananas, plantations
growing these commodities were carved from forests around the world.
Sugar was the greatest early destroyer, beginning with the Portuguese
leveling of Brazilian forests in the 1530-s and followed by other
colonizers across the Caribbean. Hence began the destruction of the
world’s great tropical rainforests. This expansion was the consequence
of the action of economic law of correspondence of commodity market
size to the level of social division of labor. Colonial system was created,
as a result of which the territorial possessions of West European tradecapitalist states increased.
The division-of-labor phenomenon
Individual and national specialization
The phenomenon of the division of labor will be easily understood
by considering how it is revealed in some particular manufactures. To
take an example, therefore, from a very trifling manufacture, but one in
which the division of labor has been distinctly noticed – the trade of a
pin-maker. A worker, neither educated to the business nor acquainted
with the use of the machinery employed in it, “could make one pin a
day, and certainly could not make twenty.” But now the whole work is
divided into a number of operations. Adam Smith in “The Wealth of
Nations” estimates that ten people, working together in a factory, could
produce 48000 pins a day.
That would be a lot more than these same ten people could produce
while working alone. Smith describes how pin-making has become
specialized: “One man draws out the wire, another straightens it, a third
cuts it, a fourth points it, a fifth grinds it at the top for receiving the
8
head”; to make the head and put it on is a separate business; to whiten
the pin is another one. It is even a peculiar trade to pack the ready-made
pins. Thus the important business of making a pin is divided into many
distinct operations. There are three obvious advantages to producing
pins in this manner. First, the workmen get good at their jobs; second,
they don’t waste time shifting from one task to another; third, the
factories can buy specialized and expensive equipment since it will be
fully utilized.
The separation of different trades and employments from one
another is generally resulted in the highest degree of improvement. The
labor which is necessary to produce any finished good is (almost always)
distributed among a great number of “hands.” The specialization
encourages a proportional increase of the labor productivity. In every
other manufacture, the effects of the division of labor are similar to what
they are in this very trifling one; though, in many of them, the labor can
neither be so much subdivided, nor reduced to so great a simplicity of
operation. The nature of agriculture, for example, admits not so many
subdivisions of labor as manufactures do. It is impossible to separate so
entirely the business of the grazer from that of the corn-farmer as the
trade of the carpenter is commonly separated from that of a smith. A
country carpenter works in every sort of job that deals with wood. A
country smith is busy with iron. The first is not only a carpenter, but a
carver in wood, as well as a cabinet (a wheel, a plough, a cart, a wagon)
maker. The employments of the smith are still more various.
This impossibility of making so complete and entire a separation of
all the different stages of labor employed in agriculture is perhaps the
reason why the improvement of the productive powers of labor in this
branch does not always keep pace with the improvement in
manufactures.
In agriculture, the labor of the rich country is not always much more
productive as it commonly is in manufactures. The corn of Poland is as
cheap as that of France. Moreover, the corn of the rich country may
come even cheaper to market than that of the poor. The corn of France in
the corn provinces is as good in quality and is nearly of the same price as
the corn of England; however, in opulence France is perhaps inferior to
England. The corn-lands of England, however, are better cultivated than
those of France, and the corn-lands of France are said to be much better
cultivated than those of Poland. But if the poor country, despite the
inferiority of the cultivation, is able, to some extent, rival the rich in the
9
quality and value of its corn, it can pretend to no such competition in
manufactures; unless those manufactures are suited a climate, soil and
location of the rich country. The silks of France are better and cheaper
than those of England, because the silk manufacture is not appropriate
for the climate of England as that of France. But the coarse woolens of
England are beyond all comparison superior to those of France and
much cheaper too. In Poland there are said to be scarce any
manufactures of any kind, except a few of household manufactures,
without which no country can well subsist.
The division of labor is not originally the effect of any human
wisdom, which foresees and provides the public wealth. Specialization is
as necessary as a certain propensity of a human nature to exchange one
thing for another. You could spend all day trying to think of something
that you have that the storekeeper will accept as payment. Whoever
offers to another a bargain of any kind should observe the rule: “Give
me that which I want, and you will have this which you want.” It is in
this manner that we obtain from one another the far greater part of those
goods which we stand in need of. It is not from the benevolence of the
butcher, the brewer, or the baker that we obtain food, but from our
regard to their own interest. We appeal not to their humanity but to their
own interest, and never talk to them about our own necessities but of
their advantages. Although this principle ultimately provides us with all
the necessities of life, it neither does, nor can provide us with the bulk of
human wants which are supplied by treaty, by barter, and by purchase.
If there is a demand for what you make or do, you can trade with
someone who has what you want. Today, of course, we use money to
facilitate exchange. Instead of finding someone to trade with, you can
simply buy what you want and sell what you produce. When you use
money, you can pay for an item and be out of the store in a minute.
Only by treaty, by barter, and by purchase we obtain all the
necessary goods from one another; so it is this same trucking disposition
which originally creates the division of labor. In a tribe of hunters or
shepherds a particular person makes bows and arrows, for example, with
more dexterity than any other. He frequently exchanges them for cattle
or for venison with his companions. Above all, he finds it reasonable.
From a regard to his own interest, therefore, the making of bows and
arrows is becoming his chief business.
There are, however, some sorts of industry, even of the lowest kind,
which can be carried on nowhere but in a market town. A porter, for
10
example, can find employment and subsistence in no other place – a
village is too little space for him. When the market is very small, no
person can have any encouragement to dedicate himself entirely to one
employment. Only the awareness of being able to exchange all that
surplus part of the production of your own labor, which is over and
above your own consumption, encourages you to apply yourself to a
particular occupation, and to cultivate and bring to perfection whatever
talent or genius you may possess for that particular business.
Specialization sometimes results in alienation. Some factory
workers, for example, have become little better than cogs in a huge
industrial wheel. There are workers whose sole function for eight hours
a day is to tighten bolts or place front right fenders on auto bodies.
Understandably, these people grow bored. Some express their
unhappiness by frequent absences, while others actually sabotage some
of the products they are assembling. Specialization leads to higher
productivity, but only when not carried too far. Therefore, some degree
of specialization should be sacrificed in an effort to bolster employee
morale. Attempts have been made in Western Europe, particularly in
Sweden, and Japan, as well, to involve the worker in making a larger
segment of the product.
On top of everything, specialization is useful only if there is a
demand for your specialty. Moreover, just as it pays for individuals to
specialize and trade, it also pays for national basis we specialize and
trade unless there is a big enough market in which to buy and sell the
goods and services we produce. The basis for international trade is
national specialization.
The Industrial revolution
The development of the East and West
The industrial-technical revolution (18-19 c.) opened the widest
space to further division of labor. The industrial revolution means a
radical change in interrelation between man and machinery. It caused
changes in the character of labor (it turns from manual into mechanized
work), in social structure of society (a former peasant became a machine
worker), in correlation between the branches of economy (farming gave
up a leading hand to industry), and, finally, in political and economic
spheres of life.
11
Thus, the industrial revolution is the revolution, which is caused by
radical change in technological mode of production, i.e. in the mode of
joining man and machinery, and which thereby brings about the changes
in the whole production, in economic and social institutions of the
society.
Some scientists (A. Maddison) consider that the West had already
surpassed the East by level of development by the beginning of the
industrial revolution. The industrial revolution in the now developed
capitalist states marked a revolutionary shift in the world productive
forces resulted in five times acceleration in the rates of economic
growth, as compared to the corresponding indices of the epoch of the
Renaissance and the Enlightenment. However, during the first years of
the industrial revolution rapid growth of some manufacturing sectors
with advanced technologies had on the whole a rather limited impact on
the overall economic growth. The speed-up in economic growth was
caused not only by rapid industrial development, but was to some extent
predetermined by rather fast agricultural growth, which turned out to be
much more intensive than in industrial sector. Meanwhile, the enlarged
rates of export played an important role in the industrialization of the
Western countries and Japan. As for colonial markets, their impact on
the genesis and spread of modern economic growth in the West and
Japan was not so great, as it is sometimes supposed. In 1800-1940
exports to Asia, Africa and Latin America did not exceed 1.5-3.0% of
the GDP (gross domestic product) of the Western countries and Japan.
At the same time important structural and qualitative changes took place
in this group of countries: the share of labor force engaged in agriculture
decreased from 65% to 43%, which was the evidence that these
countries had ceased to be predominantly agrarian ones. It can be
pointed out that during the industrial revolution in the large now
developed countries the joint inputs of labor and capital had nearly
increased five times: the labor input – 3.5 times, and the input of capital
– 12 times. The total productivity of labor and capital doubled. But still
in spite of the noticeable rise in the contribution to economic growth of
the so-called intensive factors, the economic development of the now
advanced countries was mainly extensive: the contribution of total inputs
to GDP growth did not exceed 29% in Great Britain and the USA, 37%
in France and Germany, 51% in Italy and Japan.
The Swiss economist P. Bairoch, who made very interesting
comparative analysis of industrialization levels and of GDP per capita
12
for a number of countries over the last two and a half centuries, argues,
that the East, by the beginning of the industrial revolution, might hardly
have been essentially behind the West, and the level of China’s
development in the middle of the 18-th century was equal or even higher
than that in some countries of the Western Europe.
According to observations available in literature, the people of the
East successfully used the historic advantages of their natural
environment. They mastered the natural productive forces and reached
effective forms of production organization; moreover, they developed
those means of production that were necessary for them in those times,
i.e. irrigational systems and other technical innovations and
constructions. Therefore, the level of social division of labor was rather
high; the level of cultural development was also impressive; the spiritual
growth of productive forces was obvious too. In the beginning of the
first millennium China was surpassing the Roman Empire, whose
economy, as it is well known, was based on natural and social
productive forces not only of Southern and Western Europe, but of
North Africa (Egypt) and of Asia. By the end of the first and the
beginning of the second millennium the oriental cultures (China, Egypt,
India) achieved considerable economic progress. This period was
marked by many technical, technological and organizational innovations
in the major branches of the Chinese and other oriental economies:
improvements in labor tools, systems of soil preparation, seed selection,
crop rotation, canal construction, paper and ceramics invention, loom
perfection. Thus, there came about profound changes in social division
of labor. In the leading countries of the East human development index
(average life expectancy, literacy rate, income per capita, etc.) was two
and a half times higher than in Western Europe. Significant progress was
also achieved in regional trade, in cultural development and literacy. A
great many of those achievements had emerged in Europe only 5001000 years later.
Being less restricted by natural and social clashes and blunders, the
West-Europeans started the expansion in all possible directions:
mastering new territories, progressing in social and intellectual spheres.
This expansion, stretched over a number of epochs (the Crusades, the
Great Geographic Discoveries, the Renaissance, the Enlightenment,
bourgeois reforms and revolutions), signified not only and not so much
the adaptation of man to nature but rather man’s adaptation of nature to
himself by means of the formation, expansion and perfection of the
13
historically created productive forces, compensation the relatively
scarcity of natural productive forces and means of existence.
The European expansion and colonization had exerted a rather
profound and contradictory impact on the socio-economic structures of
Asia, Africa and Latin America. Unfortunately, this contact resulted in
heavy human losses. In 1520-1880 about 30 million of slaves were
exported from Black Africa. A great many of African, Asian and Latin
American countries paid large colonial tribute. However, the inflow of
capital and commodities into colonized countries helped to create there
elements of economic and social infrastructure. Under these conditions
the backward social systems in a number of those countries underwent
some reconstruction and modernization. These factors, being rather
contradictory, had caused some speed-up in economic growth of the
colonial and dependent countries. Nevertheless, a more thorough
analysis shows that the economic development in colonial and semicolonial countries was extremely unstable, and couldn’t result in the rise
of standards of living of the majority of the population – these countries
lagged behind the advanced capitalist states. On the whole, in 1870-1945
the per capita GDP in the six large peripheral countries had hardly
increased by 20-25%. The GDP in the six advanced countries had
doubled, compared with the corresponding indices of the epoch of the
industrial revolution, and reached on average 70%.
When World War II broke out, the world economy reflected a
rather uniform division of labor. In the richer countries of Europe and in
the USA, Canada, Japan, and Australia, global corporations sourced the
bulk of the world’s minerals and agricultural commodities from
countries and colonies of Latin America, Africa, and Asia.
Today, this basic division has changed radically. While the richer
countries of Europe and North America still export industrial products,
the poorer nations are suppliers of simple manufactured goods, raw
materials, services and tourism. A number of the former colonies are
developing on the whole according to the paradigm of modern economic
growth, although with some peculiarities. Despite many forecasts, there
came a certain decrease in the GDP (per capita) gap between six large
peripheral countries and six large advanced countries: in 1950 it was 1:8
and now it is 1:6. The gap in human development index between
developed and developing countries decreased as a result from 4.5 to
2.6. But it must be stressed that economic progress of developing
countries has been mainly connected with achievements of China, India,
14
Brazil, Mexico and the newly industrializing economies of East Asia.
However, despite a relatively high level of industrialization, most of the
nations are finding it difficult to compete for foreign investment with the
highly developed countries. On top of everything, about sixty countries,
mostly all in Africa, are so poor that their economic contacts with the
rest of the world are pretty much limited to minimal trade and
investment and dwindling foreign aid.
International specialization
Trade and labor markets
We are all traders. For example, as workers we trade our time and
skills for the goods and services our wages buy. If we go from individual
specialization and trade to national and international specialization and
trade, we’ll see that what makes sense on an individual basis also makes
sense internationally. Different nations specialize in the production and
services for which their resources are best suited. Such an allocation of
the world’s resources lends itself to the efficient production of goods and
services, – production towards the satisfaction of human wants. Thus
national specialization is the basis for the international trade.
In studying international trade, remember that what is true about
trade is true about international trade. These truths are:
-
Trade is mutually beneficial. Both sides expect profits, or they would
not trade.
Nations export goods in order to buy imports. Exports are what you sell
and imports are what you buy.
The cheaper imports are the better off a nation is.
Two nations should trade whenever the before-trade relative prices of
goods are different. Relative price of Good A is the amount of Good B
that has to be given up to get one more unit of Good A:
Relative price of A = P (a) / P (b)
Where P (a) is the price of Good A and P (b), the price of Good B
A nation should compare its relative prices before trade. The nation
should export those goods that it can produce at a lower relative price
than other nations and import those goods that it would have to produce
at a higher relative price. This is the law of comparative advantage.1
1
This term – comparative advantage – was developed by the English economist David Ricardo in
1817 as a forceful rebuttal against import tariffs known as the Corn Laws, which heavily taxed imports
of foreign-grown grain at the time. These Laws kept the price of grain high, so the nobility that owned the
15
International trade and the accompanying financial transactions are
generally for the purpose of proving a nation with commodities it lacks
in exchange for these that it produces in abundance; such transactions,
functioning with other economic policies, tend to improve a nation’s
standard of living. The majority of economists believe that all nations
will raise their living standards and real income if they specialize in the
production of those goods and services in which they have the highest
relative productivity. Nations may have an absolute or a comparative
advantage in producing goods or services because of factors of
production (raw materials), climate, division of labor, economies of
scale, etc. This theory explains why there is international trade between
North and South, for instance, semiconductors going from the USA to
Brazil, and coffee going in the opposite direction. But it doesn’t explain
the fact that over 75% of the exports of the advanced industrial countries
go to other similar advanced nations, with similar resources, wage rates,
and levels of technology, education, and capital. It is more a historical
accident than a result of natural resources that the US leads in building
aircraft, semiconductors, computers and software, while Germany makes
luxury automobiles, machine tools and cameras.
The major part of the world-wide demand for new machinery and
equipment that accelerate industrial-technological development is met
by industrially developed countries. They are the market leaders in the
world economy. Industrially developed countries occupy leading
positions in the world economy. They rule the roost. Although 16% of
the world population lives in these countries, they provide an
overwhelming part of the global economy and scientific potential. The
USA, for example, is the world leading producer of copper and oil and
the world second producer of iron and coal. Among the most important
manufacturing industries are: car, aircraft, textile, radio-and-TV and
some others. The UK is known as one of the world’s largest producers
and exporters of machinery electronics, textile and shipbuilding
vast majority of farmland favored keeping them. Naturally, the poor were opposed because the Laws
drove up the price of their basic food supply – bread. The key insight of comparative advantage is that the
proper measure of cost when considering whether you should produce one good or the other isn’t how
many hours of labor input it takes to produce it. Instead, the true cost-efficiency depends on how much
production of one good you have to forgo for the manufacturing a unit of the other good.
Having an absolute advantage means that you can make something at a lower cost as measured in
inputs.
However, what matters in life are not inputs but outputs – the things that people actually want to
consume.
16
equipment. The economic level in these countries is very high. Since the
economic level in developed countries is high, the living standards are
also high. People can afford to rent or buy a flat or a house. The medical
care and education are provided too.
Economically developed countries are the leaders in the field of
development and introduction of resource-saving technologies. This
concerns most West-European countries, Japan, South Korea, and the
USA. More than a half of minerals produced in the world are consumed
by only sixth of the world population. From 1990 to 2007 oil and oil
products consumption increased by 10% in the USA, 65% in Canada,
15% in Western Europe, 20% in Australia and Oceania. 2
The external policy of the developed countries includes:
-
keeping the leading positions in all the spheres of economic, political
and cultural life
protecting their own markets and assets
providing free trade
managing the import/export policy
importing goods to increase their poor developed branches
exporting goods of scientific and agricultural industries
carrying out the programs of foreign economic aid
developing the flexible investment system
providing the direct capital investments
observing the restriction rules connected with direct investments in
such spheres as nuclear engineering and space investigation
The USA, the UK, Germany, France, Canada, Italy and Japan are
called “The Group of Seven”. The UK and Italy are the members of the
European Union (EU), the USA and Canada form the North American
Free Trade Agreement (NAFTA).
There is one peculiar feature in the social structure of the
multinational developed countries (the USA, Canada) – the population
there is called “the melting pot” because of the mixture of different
nations and nationalities, who, nevertheless, try to keep their own
customs and traditions.
Developing countries are countries with a low income average, a
relatively underdeveloped infrastructure and a poor human development
index when compared to the global norm. The term ‘developing’ has
tended to edge out earlier ones, including the cold war-defined Third
2
Over the same period, it reduced by 55% in the CIS countries, 29% in Romania, 14% in Czechia and
Slovakia.
17
World. 3 Nowadays, the group of developing countries unites 141
countries of Asia, Africa, Latin America and Oceania with the
population of 3.2 bln people. The poor form a huge part of the
population in the developing countries. The great majority lives in
villages and countryside: for example, in Kenya, Thailand and India
over 80% of rural population are considered to be poor. Due to the
World Bank’s criteria the poor are those whose everyday income is less
than $1. Statistics reveal that in developing countries 31% of the
population belongs to the poor. In some countries this index is even
higher, for example, in India – 52.5%, in South Africa – 48%. During
the periods of economic growth the percentage of rich strata of society
increases. In Brazil, Colombia, India, Costa Rica and the Philippines the
incomes of the 20% of population, revealed to the rich, have raised
because of the concentration of all the assets in the hands of local elite
and by its close connection to authority. As a result 3-7% of income is
distributed among 40% of population. Compare the corresponding index
of the income in the developed countries:
Countries
Developed
Developing
1960
30
1
2005
75
1
In developing countries, approximately, 45% of capable population
are entirely unemployed or underemployed (low incomes, mass
unemployment, poverty, poor living conditions, etc.). According to
different theories, sources of underdevelopment include:
-
-
legal structures and institutions (break down in the rule of law, high
corruption)
intrinsic factors (real or used as justification): culture of the people,
behavior of the elite
extrinsic factors (real or used as justification): geopolitical or
commercial interest, place of the country in a historical and cultural
system, lack of interest in and comprehension for the specific dynamics
of a nation, by multinational companies, inadequate reforms to get out
of situations of deficit and indebtedness in which the country is placed
low savings which may lead to low investment (though large amount
of saving and investment still does not imply strong development).
3
The term ‘Third World’ was used for the first time by demographer Alfred Sauvy and refers to the Third
Estate. The ‘Third World’ doesn’t include the nations of the liberal West (‘First World’), nor of the Soviet
block (‘Second World’), and to some extent were ignored because they could not throw strong support
behind either.
18
The weight of the developing countries in the world trade is
fluctuating. In the 1970-s the newly independent states played an
important role in the world economy. Their share in world production
increased, and they were able to launch a campaign for a new
international order. Almost all over the developing world foreign mining
concessions were nationalized, raw material prices rose sharply, and the
industrialized states became more heavily dependent for raw material
supplies on the former colonies. But nowadays using their economic
might and technological superiority, industrially developed countries
have created and perfected new forms of enslavement: technological,
food and financial. Buying raw materials from the developing countries,
the industrially developed nations process them and then sell the goods
manufactured back to the original suppliers for prices ten times higher
than the materials costs. This diminished the West’s dependence on
suppliers (developing countries) of raw materials from Asia, Africa and
Latin America: the bulk of world reserves of oil are concentrated in the
Persian Gulf, bauxite in Central Africa, etc. However, excessively
growing export of raw materials is as a rule accompanied by a drop in
their domestic consumption. Export, on the one hand, enables to
maintain production capacities, relax social tension in many regions,
and, on the other hand, a permanent export orientation of key branches
and productions reduces prospects of economic restructuring and makes
the economy even more dependent on the world market.
There are forty-seven countries in Latin America, Africa and Asia
that still gain 30% or more of their export earnings from one or two
agricultural or non-oil mineral products4:
Latin America
&
Caribbean
Bahamas
Belize
Chile
Cuba
Dominica
Guadeloupe
Guyana
Honduras
Jamaica
Nicaragua
4
Africa
&
Asia
Benin
Botswana
Burkina Faso
Burundi
Ivory Coast
Ethiopia
Gambia
Ghana
Guinea
Kenya
Products
shellfish
sugar / fruit
copper / metal ores
sugar
fruit / stone
sugar / fruit
gold / sugar
fruit / coffee
metal ores
Coffee / shellfish
Products
cotton
pearls / stones
cotton
coffee
cocoa / coffee
coffee
seeds
cocoa / gold
metal ores
tea / coffee
Anderson S. Field Guide to the Global Economy. The New Press. 2005, – P.10-11
19
Panama
Paraguay
Saint Lucia
Saint Vincent
& the
Grenadines
Suriname
fish / fruit
seeds / cotton
fruit
fruit / nuts
Malawi
Mali
Mauritania
Mozambique
Namibia
Niger
Reunion
Rwanda
Senegal
Seychelles
Sierra Leone
Somalia
Sudan
Uganda
Zambia
Zimbabwe
Burma
Fiji
Maldives
Papua New
Guinea
Solomon Islands
Tonga
metal ores
tobacco
gold
iron ore
aluminum
pearl / stones
uranium
sugar
coffee
fish/vegetable oil
fish
precious stones
live animals
cotton /vegetables
coffee / fish
copper
tobacco / cotton
wood / natural gas
sugar / gold
fish
metal oils
wood
vegetables
There are in Africa none of those great inlets, such as the Baltic,
Adriatic or the Mediterranean seas in Europe, and the gulfs of Arabia,
Persia, India, Bengal, and Siam in Asia, to carry maritime commerce
into the interior parts of that great continent. Nevertheless, the European
demand for sugar, coffee, tea and other human wants provides great
opportunities for these countries to expand their trade markets all over
the world.
The more of a nation’s product is traded, the more national labor
market depends on consumption patterns elsewhere in the world
economy, i.e. the more of the world’s production is traded, the more
interdependent economies become.
Trade is the most obvious way in which labor markets are linked
across the borders, since the output of labor in one country enhances its
consumption in some other country. Hence, national labor markets
should more rapidly adjust to international competition through trade.
Such adjustment will reconstruct national patterns of industrial
specialization and, as a consequence, international division of labor
wrought through trade. The burden of such adjustment will be put on the
20
highly developed countries, and it will cause the effect of the
complementary division of labor in which, for example, the USA buys
more Mexican textile products and sells more of its computers to
Mexicans. Moreover, if earlier U.S. firms operating in Mexico had to
encounter lower costs alongside with a lower productivity, nowadays’
forward-looking investors have realized that the still low-cost Mexican
environment is not presented an insurmountable obstacle to achieving
world-class productivity and quality. Thus, the integration of production
allows firms to take advantage of the rising quality of labor in
developing countries. This rising quality of labor relates to integrated
international production in the way when the location decisions of the
integrated producer are driven by the specialization of individual added
value activities which are focused on the human capital. Thus, with
integrated production, the firm transfers only specific value-adding
activities, and the integrated producer’s competitive advantage relies
more on the transfer of best practice, managerial, organizational and
human-resource innovation.
The rapidly rising quality of the workforce in many developing
countries, 5 together with their relatively low wages has been an
important factor behind the relocation of many jobs from developed to
developing countries. General Electric has been one of the largest
exporters of U.S. jobs to low-wage countries. Between 1986 and 1998,
the company cut its U.S. workforce nearly in half, while nearly doubling
its foreign operations. In 1999, GE’s Mexican factories employed 30000
workers. That year, GE’s CEO at the time Jack Welch, earned $ 141
million – two and a half times the pay of his combined Mexican
workforce.6 To further cut costs, GE began pressuring its suppliers to
move to Mexico as well. In a series of conferences titled “Globalization
and Supplier Migration,” the company ordered its suppliers to move
south of the border. According to notes taken by one participant, “GE set
the tone early and succinctly: “Migrate or be out of business; not a
matter of if, just when.” Not surprisingly, there has been a steady
migration of GE suppliers to Mexico and other low-wage countries
during the years hence. Intra-firm trade of “intermediate goods” (parts
for further manufacture) has increased significantly. General Electric
5
For example, China and Brazil university graduates rank third and fifth in the world among the science
graduates; Brazil, China, Mexico, Republic of Korea and the Philippines all come ahead of France and the
United Kingdom in the number of engineering graduates.
6
A. Bernstein. Welch’s March to the South. – Business Week, December 6, 1999.
21
ships machinery parts to its own subsidiary in Nuevo Laredo, Mexico,
for assembly. Between 1982 and 2006, the percentage of exports by
U.S.-based global firms to their foreign affiliates that were “intermediate
goods” increased from 15% to 25%.
A growing percentage of world trade is becoming intra-industry
trade and intra-firm trade by transnational firms – this is the result of the
international spread of production, when a large share of world trade is
not between countries, but between one part of a global firm and an
affiliate of that same firm. Multinational corporations spread their
activities across the world. Most countries have lifted barriers to trade in
goods and services over the last several decades Export and import
shares of output have increased considerably in practically all industrial
sectors. Furthermore, new technologies have made trade increasingly
important to the world economy which is becoming a single economic
unit. The process of internalization of the economic, political and
cultural spheres of the society’s life is revealed in the process of
globalization of all these aspects. The world’s economic community is
gradually transforming into the integral economic system, with national
societies representing the interconnected interdependent countries.
The global economic relationships acquire the role of leading and
governing structures. Advanced industrial countries, underdeveloped
countries and countries in transition7 are forced to adapt to the realities
of the global economy. The gap between the advanced and poor
countries is great, however, under globalization, the developing
countries are able to use all the technological, management and market
achievements gained by the developed states. This opportunity allows
them to save time and capital, skipping few steps on the ladder of
scientific progress. Such ‘skipping’ often happens not due to the
initiatives of the developing countries, but rather because of the
objective trends in modern world economy and active role of the
advanced countries. The fact is that the most developed countries are not
able neither economically, nor politically be totally independent. The
transition of labor, resources, products, etc. from highly developed
countries into developing ones is historically established. Such transition
is only possible if the target country possesses workers with sufficient
qualifications, the sufficient financial, transport infrastructure as well as
7
The so-called countries in transition are commonly understood to refer to countries which have moved
or are moving from a primary state-planned to a market-based economic system, with private ownership
of assets and market-supporting institutions.
22
legal and political stability. Thus, due to globalization of the economy
the multi-level “ladder-like” structure is built, the structure where
developing countries are “climbing” to the top, simultaneously
increasing their economic and social-cultural potential and bridging the
gap between the advanced and the underdeveloped states. As any
historical process, globalization has its benefits and challenges for all
people.8 All the countries, poor and rich, small and large are forced to
adapt to both negative and positive aspects of globalization. In order
these adaptive changes be more dynamic and occur with less costs,
coordinated efforts and integral collaboration of the entire world’s
community are clearly required.
TEXTS
Read and translate the text:
“Business of business is business”
The Economy and Business in Britain
Britain’s economy is based primarily on private enterprise which
accounts for 75% of output and nearly 70% of employment. The UK
has around 3, 7 million businesses. They include many big companies.
According to a Financial Times survey of the top 500 European
companies, 146 are UK-based. A number of large companies and their
subsidiaries are responsible for a substantial proportion of total
production in some sectors. This is true for chemicals, pharmaceuticals,
motor vehicle assembly and aerospace.
Businesses employing more than 1000 people, 0, 4% of all businesses,
account for 55%. Just over 2% of the British workforce is engaged in
agriculture, services contribute 65% of production, while manufacturing
accounts for 21%. The average manufacturing company is fairly small.
Four-fifths employ few than 20 people.
These make up 10% of the manufacturing workforce.
International trade plays a vital role in Britain’s economy. Exports of
goods and services make up around 25% of national output. Britain is
the world’s ninth largest oil producer and the fifth largest gas producer.
Developing North Sea oil and gas has created a huge support industry
8
read about globalization in “A Guide to the World Economy.’ (Part I).
23
offering equipment and services to oil and gas companies at home and
abroad. The two leading British oil companies are BP and Shell (the
latter is part Dutch). British Petroleum (BP) is the eleventh largest
industrial grouping in the world and the second largest in Europe.
Producing about 80% of Britain’s crude steel, British Steel is the fourth
biggest company in the Western world. Just under half of total output is
exported. The major areas of steel production and processing are Wales,
Northern and Eastern England, and the English Midlands.
Around 250 British industrial companies each have an annual
turnover of more than 500 million pounds. The ten largest
manufacturing concerns are BAT Industries (tobacco products, food,
etc.), Grand Metropolitan (food, drinks), Hanson Trust (various), Ford,
British Aerospace, General Electric Company (GEC – electronics),
British Steel, and Smith Kline Beecham (pharmaceuticals), Imperial
Chemical Industries (ICI), Unilever (Chemicals). Britain’s chemical
industry is the third largest in Western Europe. The country’s fourth
biggest manufacturing industry, it exports nearly 50% of production, and
is one of the Britain’s biggest export earners. The most rapid growth in
recent years has been in pharmaceuticals, pesticides and cosmetics.
An extensive range of computer hardware systems and associated
equipment and software is produced in Britain. Amstrad is Britain’s
best-selling personal computer firm. Several leading overseas
manufacturers – such as ICL, IBM, Unisys and Compaq – have
manufacturing plants in Britain. British firms and research bodies have
been active in developing new semiconductor materials, which can
help computers work much faster.
Car output is dominated by Rover (which is British), Ford,
Vauxhall, Peugeot Talbot and Nissan. Two other Japanese
manufacturers have also established themselves in Britain – Honda and
Toyota. The motor components industry, consisting of over 2000
firms, is an important employer.
Britain has a large food processing and drinks manufacturing industry,
which supplies well over half of the nation’s needs. Convenience foods,
yogurts, other dairy desserts and instant snacks have formed the fastest
growing sector in recent years. The market for organic and other
“healthy” products (low fat, low salt, preservative-free and so on)
continuous to grow. Scotch whisky is one of Britain’s top five export
earners. There are over 110 distilleries in Scotland. Britain’s wool
textile industry is one of the largest in the world and is centered in
24
Northern England. The linen industry is based in Northern Ireland.
Britain is one of the world’s leading producers of woven carpets.
Private sector firms predominate in the economy. Small firms play
an important part in the UK economy: around 44% of the workforce
work for companies employing fewer than 50 people. Around 2, 3
million businesses are sole traders or partners without employees. The
public sector has become much less significant following the
privatization since 1979 of many public businesses, including gas,
electricity supply, coal and telecommunications. The remaining major
nationalized industries are the Post Office, British Nuclear Fuels and
the Civil Aviation Authority. These are expected to act as commercial
enterprises and achieve a required rate of return on new investment.
The Government looks forward to improving work incentives by
reducing corporate and personal income tax rates, and by increasing
share ownership among employees. Direct controls on pay, prices,
foreign exchange, dividend payments and commercial credit have been
abolished. The Department of Trade and Industry (DTI) promotes
enterprise and innovation through encouraging successful business
start-ups and offering businesses a number of support services. Most
support is designed to assist business, especially small and mediumsized enterprises, to expand and invest, and adopt best practice. Small
businesses employ more than a third of the private sector workforce and
are responsible for one-sixth of total turnover.
The Government provides financial assistance and guidance to help
with problems affecting small companies.
The Small Business Service (SBS) established in April 2000. Its main
tasks are to:
act as a strong voice for small businesses within government
simplify and improve government support for small firms
help small businesses deal with regulation, and ensure that their
interests are considered in future regulations
The SBS is responsible for the future development of the “Business
Link” network of local partnerships that are the main mechanism for
delivering business information, advice and support in England. The
network has nearly 1000 personal business advisers and specialist
counsellors for export development, design, innovation and technology.
Thus the Government’s economic strategy is centred not only on
promoting British exports and encouraging market regulation, but also
on:
25
consulting business and consumers when developing policy
(business-government interface)
stimulating innovation
encouraging competition
improving the flow of information to business
On top of everything, Britain is considered an attractive location for
inward investment, because of its membership of the EC and
proximity to the other European markets, and low corporate and
personal taxation. Foreign-owned firms are offered the same incentives
by the Government as British-owned ones.
-
Vocabulary
private enterprise – частное предприятие
to account for - насчитывать
subsidiaries - филиалы
substantial proportion – существенная часть
national output – национальный объем производства
support industry – вспомогательная отрасль
crude steel – необработанная сталь
annual turnover – годовой оборот
pharmaceuticals – фармацевтические товары
export earner – доходный экспорт
pesticides - удобрения
extensive range – широкий ассортимент
hardware – компьютерное оборудование
software – программное обеспечение
semiconductor materials - полупроводники
establish themselves – зарекомендовать себя
motor components industry – производство запасных частей
convenience foods – пища быстрого приготовления
instant snacks - полуфабрикаты
low fat – низкая калорийность
preservative-free – без консервантов
distilleries – заводы, производящие алкогольные напитки
linen industry – льняное производство
woven carpets – ткацкое производство
sole trader – частный предприниматель
nationalized industries – национализированные отрасли промышленности
Post Office – правительственная организация, занимающаяся не только
почтовыми перевозками, но и выплатой пенсий и пособий
incentives - стимулирование
income tax rates – доходы от налогов
26
share ownership – долевая собственность
to abolish – отменять
start-ups – начинания
total turnover – общий оборот
guidance – руководство
counselor – психолог, консультант
inward investment – внутренние капиталовложения
proximity – близость
Ex. 1. Translate into English
1. Широкий ассортимент компьютерного оборудования и
необходимого программного обеспечения производится в
Великобритании.
2. Шотландский виски входит в пятерку основных экспортных
товаров, приносящих стране доход.
3. В последнее время становится популярной пища быстрого
приготовления, йогурты, молочные продукты, полуфабрикаты.
4. Малый бизнес в Британии поддерживается правительством. Об
этом свидетельствует создание в апреле 2000 года «Службы
Поддержки Малого Бизнеса».
5. Торгово-промышленный департамент продвигает успешные
деловые начинания и оказывает предпринимателям помощь и
финансовую поддержку.
6. С 1979 года, после приватизации большинства государственных
предприятий в экономике Британии доминирует частный сектор.
Национализированными остались ядерная энергетика, гражданская
авиация т сфера социального обеспечения.
7. В связи с тем, что Британия является членом Экономического
Сообщества и находится в непосредственной близости от мирового
европейского рынка, она привлекает иностранные инвестиции, тем
более, что зарубежным компаниям предоставляются такие же
правительственные льготы, что и местным фирмам.
Ex. 2. Choose A, B or C?
1. The British workforce engaged in manufacturing accounts for__.
A. 2%
B. 21%
C. 65%
2. British Steel is the _____ biggest company in the Western World.
27
A. fourth
B. first
C. fifth
3.Britain’s chemical industry is the _____ largest in Western World.
A. first
B. second
C. third
4. ______ is Britain’s best-selling personal computer firm.
A. Amstrad
B. IBM
C. Unisys & Compaq
5. The _____ is responsible for the development of the “Business Link”
network of local partnerships.
A. Government
B. SBS
C. DTI
Ex. 3. Tick the correct box
England
Scotland
steel
oil
gas
wool
textile
linen
whisky
Wales
N. Ireland
Ex. 4. Match the firms to the products they manufacture
1. British Aerospace
2. Ford
3. BAT
4. Unilever
5. Smith Kline Beecham
6. Grand Metropolitan
7. Hanson Trust
8. GEC
9. British Steel
10. ICI
a) cars
b) planes
c) chemicals
d) tobacco, food
e) various
f) electronics
g) pharmaceuticals
h) food &drinks
i) steel
j) chemicals
28
Ex. 5. TEST: Can you run your own business?
For each of the following questions, tick the closest answer
1.
Do you enjoy taking risks?
a) Yes, I like taking risks.
b) No, I prefer safety.
c) I try to evaluate the exact danger of it.
2.
Can you make decisions?
a) Yes, I often make quick decisions.
b) No, I don’t like making decisions.
c) Before making a decision I need time to think it over.
3.
Can you take responsibility?
a) Yes, I can. I am not afraid of being responsible.
b) No, I don’t like taking charge.
c) I am not afraid of taking responsibility, but I prefer to share it with
someone else.
4.
Are you a good organizer?
a) I plan exactly what I am going to do.
b) I can’t cope with unexpected problems.
c) I am quite disorganized.
5.
How do you get on with other people?
a) Very well. I like contacts, meetings and etc.
b) I am reserved. People annoy me.
c) I am outgoing if I want.
6.
Can you lead?
a) Yes, I can persuade most people to follow me.
b) I am quite happy to execute other people’s decisions.
c) Leadership isn’t for me.
7.
Do you delegate?
a) I always delegate everything.
b) I prefer to do everything by myself.
c) I delegate only the least important tasks.
8. Are you motivated by…?
a) Money.
b) Job satisfaction.
c) Money and job satisfaction.
9. Can you cope with stress?
a) I can live with stress.
29
b) I try to avoid stressful situations.
c) Stress stimulates business.
10. What are your chances?
a) I am sure everything depends on me.
b) I believe everything depends on outside factors.
c) I can’t foresee my future success.
11. What would you do if your business failed?
a) Carry on.
b) Give up.
c) Start a new one.
Use the key to calculate your total score.
1. a) 1 b) 0
c) 2
6. a) 2
2. a) 1 b) 0
c) 2
7. a) 0
3. a) 2 b) 0
c) 1
8. a) 1
4. a) 2 b) 1
c) 0
9. a) 0
5. a) 2 b) 0
c) 1
10. a) 2
11. a) 1
b) 1
b) 1
b) 0
b) 2
b) 1
b) 0
c) 0
c) 2
c) 2
c) 1
c) 0
c) 2
20 or above: Go ahead! You can run your own business. You are a good leader
and organizer.
Between 20 and 10: You have some skills for running your own business, but
you are to think before.
Below 10: Running business is not your business.
Ex. 6. Write a discursive (opinion) essay on the topic:
“Small Business. To Do or Not to Do?”
Read and translate the text:
Gas Ring
Chile's search for reliable suppliers
Over the next couple of years Chile is likely to be Latin America's
fastest-growing economy, as it was for much of the 1990s. But there is
one big potential brake: energy. With little oil or coal of its own, Chile
imports two-thirds of its energy, relying especially on Argentina's natural gas. Some $4 billion has been invested in gas pipelines and gasfired power plants. Until recently, Chile was importing 20m cubic
30
meters of Argentine gas per day. This provided a quarter of central
Chile's electricity and almost 60% in the north.
But Argentina's government has frozen the price of gas at home:
consumption has soared and investment fallen. Since last year it has
imposed unilateral cuts in gas exports to Chile of 20% (and at times
50%). Chile has avoided power cuts, mainly because heavy winter rains
boosted hydroelectric output. But it urgently needs more reliable
suppliers.
One solution might be Bolivia, which has South America's largest
gas reserves after Venezuela. But Bolivia still smarts at Chile's
annexation of its mineral-rich coastal territory in a 19th-century war. It
refuses to sell gas to Chile.
So Chile is looking elsewhere. First, ENAP, the state oil company, plans
to award a contract in October for the supply of liquefied natural gas
(LNG) and a $400m re-gasification plant near Santiago. A second, more
ambitious, plan is for a single "energy ring" in South America's southern
cone which would incorporate gas from Peru's Camisea field. This
would use existing pipelines across the southern cone. It would add at
least one more, along the Pacific coast from Peru to Chile.
One obstacle is Chile's quarrel with Peru over their maritime border. But supply cuts for nationalist reasons would be less likely if they
also affected Argentina and Brazil, and the project would include some
form of supply insurance.
The bigger question is whether the "ring" is the best design for energy
integration. The 1,20okm (750-mile) pipeline from Peru to northern
Chile could cost up to $1 billion. A possible extension to Santiago
would increase demand, but over a distance at which it becomes cheaper
to import liquefied gas (indeed Peru might be a supplier for the ENAP
plant). Transport costs would make Peruvian gas uncompetitive in
Argentina. And Camisea may not have enough gas to supply the
southern cone as well as the home market and planned LNG exports to
North America.
The main purpose of the "ring" appears to be to coax Bolivia (an
observer at the talks) into bigger gas exports. "It's amazing how
transforming this into a multilateral issue has cut through bilateral
difficulties," says Rudolf Araneda, a manager of a Chilean pipeline.
Bolivia has resumed talks on a second pipeline to Argentina (potentially
freeing up more Argentine gas for Chile) which it broke off earlier
31
because of political turmoil. The "ring" means that Bolivia would no
longer hold all the cards in the southern cone's power game.
(from “The Economist”2006)
Vocabulary
brake – тормоз
pipeline – трубопровод
soar – взлетать, стремительно повышаться
impose – вводить (налог), налагать (штраф)
unilateral – односторонний
smart – страдать
annexation – аннексия, присоединение
to award a contract – заключить контракт (государственное ведомство с
частной фирмой)
liquefied – сжиженный
obstacle – препятствие, помеха
maritime морской, приморский
affect – воздействовать, влиять, наносить ущерб, вредить
extension – протяженность, удлинение, увеличение
coax – добиваться чего-либо с помощью уговоров
multilateral – многосторонний
bilateral – двусторонний
resume – подводить итог
turmoil – беспорядок, суматоха
Ex. 1. Here are some words and word combinations. Give a description
of each of them without translating.
Pipeline; a gas-fired power plant; supplier; South America's southern
cone; multilateral.
Ex. 2. Find word combinations in the text that can be translated in the
following way:
Freeze the price; consumption has soared and investment fallen; to boost
hydroelectric output; reliable suppliers; liquefied natural gas; maritime
border; supply insurance; to coax smb into bigger gas exports.
Ex. 3. Translate the following word combinations, taken from the text:
Транспортные расходы; внутренний рынок; подвести итог
переговоров; политические беспорядки; иметь все преимущества в
игре; повышать выпуск энергии гидроэлектростанциями;
заморозить цены; надежные поставщики.
32
Ex. 4. Translate the sentences from English into Russian, paying
special attention to the words from vocabulary notes.
1. In 1977 shipment of oil began through a 1,300-km pipeline designed
to carry 2 million barrels of crude oil per day. 2. Тhe unemployment rate
soared as unstable businesses declared bankruptcy. 3. Multilateral
economic sanctions, especially those imposed by an international
organization, such as the UN are generally more effective. 4. Hitler
launched his own expansionist drive with the annexation of Austria in
March 1938. 5. There are such practices as favoritism in the award of
contracts for public works or other public purposes and the expenditure
of public funds to the advantage of favored individuals. 6. The
development program faced major foreign and domestic obstacles. 7.
The automobile industry is one of the most important industries in the
world, affecting not only the economy but also the cultures of the world.
8. The Internet is an extension of a computer network. 9. The two
countries agreed to resume diplomatic relations immediatelу. 10. Issuing
new coins and banknotes led to economic turmoil in the country.
Ex. 5. Translate the sentences from Russian into English, paying special
attention to the words from vocabulary notes.
1. После окончания второй мировой войны в Европе было
построено много трубопроводов для транспортировки газа и
нефтепродуктов. 2. Количество коммерческих банков в России
возросло до 2600 к середине 1995 года. 3. Совет по безопасности
ООН может наложить экономические санкции на страну, которая
признана агрессором. 4. Двусторонние и многосторонние торговые
соглашения подписаны между Европейским Союзом и
большинством развитых стран. 5. В результате войны к стране
были присоединены несколько соседних провинций. 6. США
получили большие заказы на производство военной техники во
время второй мировой войны. 7. Существует несколько
препятствий для подписания этого контракта. 8. Рост
промышленности сильно влияет на развитие общества во всех его
аспектах. 9. Она уговорила директора дать ей возможность одной
заниматься этим проектом. 10. Через неделю обе стороны
официально подведут итоги переговоров. 11. Политические
беспорядки и неопределенность внутри страны привели ее к
кризису.
33
Ex. 6. Answer the following questions:
1.
What are the main sources of energy in the world?
2.
What is ‘crude oil’?
3.
How is oil/natural gas used?
4.
What are alternative sources of energy?
5.
What kinds of products are transported through energy pipelines?
6.
What is done to keep pipelines safe?
7.
How are routes of pipelines determined?
8.
Do pipelines affect the environment?
9.
What should be the top policy priority on energy?
10.Isn't it vitally important to reduce energy use?
11.Do free markets ensure adequate supplies of energy at reasonable
rates?
12.What are gas wars? What countries are involved into them? What is
behind them?
Ex. 7. Comment on the following quotations:
In politics, nothing happens by accident. If it happens, you can bet it
was planned that way.
(Franklin D. Roosevelt)
The problems that exist in the world today cannot be solved by the level
of thinking that created them.
(Albert Einstein)
Nuclear power, once regarded as petroleum's natural heir, has become
less and less attractive as its numerous drawbacks come to light. Coal,
the other fossil fuel, is ultimately as exhaustible as oil.
(Lester Brown)
Ours is the most wasteful nation on Earth. We waste more energy than
we import. With about the same standard of living, we use twice as
much energy per person as do other countries like Germany, Japan, and
Sweden. (Jimmy Carter, 39th President of the United States)
No matter how advanced our economy might be, no matter how
sophisticated our equipment becomes, for the foreseeable future we will
(George W. Bush)
still depend on fossil fuels.
The bottom of the oil barrel is now visible. (Christopher Flavin)
34
Mixing oil and testosterone can be dangerous. (Myriam Miedzian)
The use of solar energy has not been opened up because the oil industry
does not own the sun.
(Ralph Nader)
Ex. 8. Deliver your speech:
1.
Alternative power generations.
2.
Ways to avoid energy crises.
Reading
Business ethics is the study of business moral.
Australia in Business
I
Australia has an enviable Western-style capitalist economy, with a
per capita GDP on par with the four dominant West European
economies. Rising output in the domestic robust business and consumer
confidence, and rising exports of raw materials and agricultural products
are fueling the economy. Australia’s emphasis on reforms, low inflation,
and growing ties with China are other key factors behind the economy’s
strength. The impact of drought, weak foreign demand, and strong
import demand pushed the trade deficit up from $8 billion in 2002, to
$18 billion in 2003, and to $13 billion in 2004. One other concern is the
rapid increase in domestic housing prices, which have raised the
prospect that interest rates will need to be raised to prevent a speculative
bubble. One of the most significant financial events in the business life
of the country is the fact that Australia Bank West is being snapped up
by the Edinburgh bank HBOS. The Edinburgh bank is trying to take
control of the Perth-based lender on the cheap. HBOS is going to expand
the bank across Australia. Under the guidance of George Mitchell,
HBOS’s head of corporate banking, Bank West will be expanded into
the more populous eastern states. But in reality, it is already there,
selling financial products through finance brokers and affinity
partnerships. It is also has offices in Adelaide, Brisbane, Melbourne and
Sydney. According to the group’s website, the interstate markets account
for almost 45% of Bank West’s total lending. Sure, Australia does not
hold the same promise as the US to a Scottish banking group, but in
some small way Perth could be to HBOS what New England has proved
to be for Royal Bank of Scotland – a useful jumping-off point for its
international ambitions.
35
Vocabulary
enviable – очень желанный, завидный
per capita GDP – ВВП на душу населения
on par – на одном уровне
drought - засуха
speculative bubble – рискованное предприятие, «мыльный пузырь»
to snap up – перехватывать
populous - населенный
affinity - близкий
II
Business ethics and political diplomacy are two very interrelated
things. The first one should take into consideration the second one, and
vice versa. The following example, concerning the details of new chief
executive’s contract in the BHP Billiton – Australian mining group, will
prove such a statement. BHP Billiton, formed through the merger of
Australia’s Broken Hill Proprietary with Billiton of South Africa several
years ago, has a history of losing chief executives quickly. Mr. Paul
Anderson, Mr. Brian Gilberson and Mr. Chip Goodyear change each
other within the few years. Mr. Goodyear, who was formerly the group’s
chief development officer, has been put on a one-year contract of the
type preferred by major institutional investors rather than the two-year
deal enjoyed by his predecessor Mr. Gilbertson. The company took the
unusual step of disclosing the contract details of his replacement, Mr.
Goodyear, to the London Stock Exchange. Mr. Goodyear, a 44-year old
American who has been at the helm is on a pay deal under which he
could earn $3,7 m a year if he meets all of his performance criteria.
Investors said they were surprised by the level of detail in the contract
released to the stock exchange.
The Association of British Insurers (ABI), whose members control
about a quarter of the London stock market, congratulated the company
for the level of detail being revealed. “It’s great they have given this
disclosure at this stage and in such detail in advance of the annual
general meeting,” the ABI said. At the previous meeting, shareholders
were advised by the National Association of Pension Funds of concerns
about Mr. Gilbertson’s two-year contract which helped ratchet up the
size of his final pay cheque to an estimated more than $16 m. BHP
Billiton tried to demonstrate to investors that the contract terms for Mr.
Goodyear could not be described as rewarding failure should he
36
suddenly leave. BHP Billiton appears to be trying to avoid any criticism
from investors that they do not know what Mr. Goodyear would receive
if he were to leave. Mr. Goodyear could still walk away with $5, 2 m if
he were to leave on friendly terms after three years and met all of the
performance criteria set out for share awards granted in previous years.
The terms require him to have served as chief executive for three years
and seem to try to limit the amount of cash that he would immediately
walk away with.
The company insists that any shares and options subject to
performance criteria would not automatically vest. He would be allowed
to keep his entitlement to certain performance shares until their
performance criteria have been reached. Mr. Goodyear, who has
received two annual installments of $150,000 to relocate from Australia
to Britain, is now to receive $125,000 to move to Melbourne. He is on a
basic salary of $1,250,000 plus retirement benefits of $600,000 and, if
he meets his performance criteria, will receive an annual short-term
bonus in cash and shares of $227,500. The performance criteria relate to
the budget set for the company at the start of the year. Therefore, the
mining group BHP Billiton tries to head off further protests by putting
its new chief executive on a contract designed to help avoid rewards for
failure.
Vocabulary
vice versa (лат. наоборот)
merger – слияние компаний
chief executive – руководитель
to be at the helm – быть «у руля»
to meet all of his performance criteria – отвечать всем производственным
требованиям
disclosure – разоблачение
to ratchet up – направлять вверх, повышать
to vest – переходить
entitlement – разрешение
installment(s) – вклад, часть
retirement benefit – пенсия по старости
III
Australia is far from the rest of the world. It takes 24-hours to get
there by plane. Much attention is paid to the national airline business.
However, Australia’s national airline Qantas, has suffered its first sixmonth loss since its floating more than 10 years ago as it struggles to
37
plunge in the number of people visiting the antipodes. The carrier was
planning to deal with the squeeze by setting up a low-cost domestic
operation to challenge Sir Richard Branson’s Virgin Blue – despite
skepticism from analysts, who suggested that could cannibalize its
existing market. Qantas, which is part-owned by British Airways, made
on A$9 m loss for the second half of its financial year. But a stronger
first half kept it in the black for the full year. With profits down by a
fifth to A$502 m. The airline was badly hit by the Sars virus, which
caused a slump in traffic to its key East Asia destinations. Along with
other international carriers, it was also hurt by the war in Iraq and
constant terrorist alerts, which have weakened the market for global
travel. Geoff Dixon, Qantas’s chief executive, has slashed nearly 3,000
staff and frozen all non-essential spending. He insisted that the airline’s
finances remained relatively healthy, given the state of the industry.
“I’m not going to sit here and say we’re out of the woods, but in some
ways I’m quite bullish on what we’re seeing at the moment,” he said.
“Our domestic profitability has to improve, and we’re working on that.”
Mr. Dixon said Qantas was well advanced with plans to launch an
EasyJet-style budget carrier within Australia. The group has already set
up an international offshoot, Australian Airlines, which carries tourists
to Bali and Malaysia. Some industry commentators pointed out that
other national airlines had seen low-cost offshoots eat into their core
market, citing BA’s Go and KLM’s defunct Buzz. “They’ll definitely
cannibalize their own market share unless they’re planning to set that up
and phase out the existing Qantas operations,” said Bruce Low, an
analyst at ABN Amro in Sydney. “I’m very cynical about whether or not
they can actually set up a low-cost carrier in the first place” Qantas said
visitors to Australia had fallen by a fifth over the year; revenues from the
UK and mainland Europe fell 1% to A$904 m, while those from Japan
dropped 19% to A$574m.
Australia is one of the most cost competitive countries in the
developed world. The Australian economy has been ranked the most
resilient in the world for the third year in succession. This strong
performance is set to continue, with forecast growth higher than the
OECD average. The International Monetary Fund applauds Australia for
its strong performance, with six years of budget surpluses, falling
public debt, low inflation, high and rising productivity and a long
period of uninterrupted growth underpinned by a dynamic job market.
38
These features and more have already inspired many forward
thinking, well-known multinational companies to do business in
Australia.
(From the Guardian)
Vocabulary
to plunge – погружаться, внедряться
to squeeze – жать, сжимать, выжимать
to cannibalize – разбирать на части
Sars virus – Severe Acute Respiratory Syndrome (острое респираторное
заболевание)
slump (in) - снижение
terrorist alerts – террористические атаки
to slash - резать
bullish – радужный, оптимистичный
offshoot – ветвь, филиал
to cite – ссылаться, вызывать
to defunct – более не существующий
resilient - эластичный, имеющий запас жизненных сил.
Succession - последовательность, преемственность.
forecast growth - прогнозируемый рост.
budget surplus - нераспределенный бюджетный капитал
public debt - государственный долг.
underpin - поддерживать.
inspire - внушить, вдохновить.
After-reading tasks
1. Match each business term to its meaning
1.stock exchange
2.stock market
3.shareholder
4.contract terms
5.pay cheque
a/a person or organization that invests
money in order to make a profit
b/an extra amount of money added to an
employee’s wages, usually as a reward for
doing difficult or good work
c/continuing increase in the prices of goods
and services
d/money provided by the government to
people who leave a job because of the end
of their working life
e/your salary before extra money such as
bonuses and commission is added to it
39
6.interest rate
7.chief executive
8.performance criteria
9.annual installments
10.investor
11.basic salary
12.retirement benefits
13.bonus
14.inflation
15.merger
16.broker
17.revenue
f/one of a series of regular payments that are
made until all of the an agreed amount of
money has been paid
g/the degree to which a company is
profitable
h/the person who has the highest position in
a company or other organization and who
makes all the important decisions about how
it is run
i/the percentage rate used for calculating
interest over a particular period of time,
usually one year
j/the amount of money someone earns
k/an occasion when two or more companies
join together to form a large company
l/a person or organization that buys and sells
securities, currencies, property, insurance
m/money that a business or organization
receives over a period of time, especially
from selling goods or services
n/the state of producing a profit, or the
degree to which an activity, company, etc. is
profitable
o/a stock market a market where company
shares are traded
p/someone who owns shares in a company
q/an agreement in a contract between two or
more people or groups which says what
each must do for the other, or must not do
2. Fill in the gaps with the appropriate preposition
1/Another concern is the rapid increase … domestic housing prices.
2/The Edinburgh bank is trying to take control … the Perth-based lender
… the cheap.
3/According … the group’s website, Australia does not hold the same
promise as the US to a Scottish banking group.
4/Mr Gilbertson’s two-year contract helped ratchet … the size of his
final pay cheque.
40
5/Mr Goodyear could still walk … with $ 5, 2 m if he were to leave …
friendly terms after three years and met all of the performance criteria
set … for share awards granted in previous years.
6/The mining group BHP Billiton tries to head … further protests …
putting its new chief executive … a contract designed to help avoid
rewards … failure.
7/Australia Bank West is being snapped … by the Edinburgh bank
HBOS.
3. Match A to B
A
B
HBOS
a/Association of British Insurers
Quantas
b/Royal Bank of Scotland
BHP
c/Broken Hill Proprietary
Bank West
d/Australia’s National Airline
ABI
e/Bank of Australia
Billiton
f/South African mining group
4. Put the sentences in the correct order
1. Bank West was snapped up by HBOS, on the cheap.
2. The first chief executive of BHP Billiton was Mr Paul Anderson.
3. BHP Billiton is a merger of Australia’s Broken Hill Proprietary with
Billiton of South Africa.
4. After that Mr Chip Goodyear was appointed.
5. The association of British Insurers (ABI) congratulated BHP Billiton
for the details of the replacement.
6. Then Mr Brian Gilberson was put on a two-year contract.
5. Open the brackets
1). Australia has an (envy) Western-style capitalist economy.
2). The rapid increase in domestic housing prices provokes a
(speculation) bubble.
3). He would be allowed to keep his (entitle) to certain performance
shares.
41
4). Mr Goodyear has received two annual (install) of $ 150,000.
5). He is on a basic salary plus (retire) benefits.
6). The airline was (bad) hit by the Sars virus.
7). Geoff Dixon has slashed (near) 3,000 staff.
6. Match A to B
A
B
1/meet all of his performance criteria a/сдерживать обещание
2/take control on the cheap
b/быть во главе
3/hold the promise
c/отвечать профессиональным
требованиям
4/put (smb.) on a contract
5/keep it in the black
6/be out of the woods
7/be at the helm
d/быть вне опасности
e/по очень низкой цене
f/заключать контракт
g/иметь деньги на счете
7. Use the expressions from Ex. 6 to complete the sentences below
1. Mr Gilberson was … of the BHP Billiton before Mr Goodyear.
2. Mr Goodyear … can earn $ 3, 7 m a year if ….
3. BHP Billiton tries to … its new chief executive … designed to help
avoid rewards for failure.
4. Geoff Dixon said that Qantas was relatively healthy and ….
5. The first half of Qantas’s financial year was strong and … for the
full year.
6. HBOS is going to expand the bank across Australia and … under
the guidance of George Mitchell.
7. Australia didn’t …as the US to a Scottish banking group.
8. Translate into English
Австралийский реестр бизнесов
Несколько лет назад в Австралии прошла крупная налоговая
реформа, которая заставила многие компании с большим
вниманием отнестись к своей деятельности и движению денежных
средств.
Первым шагом к предоставлению частному сектору
интегрированных и ориентированных на клиента услуг стало
введение Австралийского номера бизнеса (Australian Business
42
number, ABN) – уникального идентификатора для всех
коммерческих структур. Теперь у каждой из 4 млн. австралийских
компаний имеется свой номер, который принимается любыми
государственными службами для выполнения тех или иных
операций.
В сотрудничестве с компаниями Accenture и Microsoft
Австралийское налоговое управление разработало австралийский
реестр бизнесов (Australian Business Register, ABR). Австралийский
реестр бизнесов имеет общенациональное значение; он существует
не только для нужд Австралийского налогового управления, но и в
интересах многих других государственных органов.
Австралийский реестр бизнесов предназначен для безопасного
хранения всех АВN – номеров и является интерактивным
средством взаимодействия со всеми федеральными, региональными
и местными органами связи, которые обслуживают бизнессообщество и управляют им.
Австралийский реестр бизнесов осуществляет обмен
информацией с государственными учреждениями с помощью вебслужб XML (XML Web Services). Реестр бизнесов сам является вебслужбой.
После того как та или иная организация регистрируется в
реестре, данные о ней посылаются по сети государственным
учреждениям, которые уже записаны в этом реестре. Информация
также пересылается обратно в реестр, когда в ведомствах
происходят какие-либо изменения.
9. Expand on the following
1. Australia is far from the rest of the world.
2. Australia has a Western-style capitalist economy.
3. Business ethics and political diplomacy are two interrelated things.
43
II. TRANSITION TO THE MARKET ECONOMY
“No gain without pain”.
(A proverb)
World Market
Free Trade
In the modern economy, most economic activity takes place in
markets, places where buyers and sellers come together to trade money
for goods and services. A market doesn’t have to be an actual place, and
many markets nowadays are fully computerized and exist only in
cyberspace. But no matter what sort of institutional agreement markets
have, they all tend to behave in the same way, which means we can
study markets in general instead of having to study each one separately.
It turns out that a very simple model called supply and demand does an
excellent job of describing how markets work, and it does so regardless
of what good or service is being bought and sold.
World Market – is a continuous trade turnover among the states
based on the international division of labor and mutual benefits
performed in the form of world market competition. Since all the nations
are involved in the world trade, some of them have reached a favorable
balance of trade, in which exports exceed imports while others have got
unfavorable results of international trade in which imports prevail. The
flow of merchandise constitutes a major category of international
transactions. The process involves the purchase and sale of goods and
services. A nation that sells goods and services abroad must also buy
from foreign nations in order to give them its currency to use in
purchasing its goods. Thus the balance of payments in international
economies is of top priority. The balance of payments consists of a
current account and capital account. The current account includes:
investment income, interest rates, dividends, profits, foreign aid. The
capital account depicts the flow of capital investments between nations:
the purchase and sale of physical assets and financial assets, capital flow
in the form of foreign aid (private foreign investment, private bank
lending). Capital investments are the principal ways by which resources
can come from rich countries to poor ones that help them achieve the
capacity for self-sustained growth.
By letting comparative advantage guide who makes what, free trade
increases total world output and thereby raises living standards. Under
free trade, each country specializes in its area(s) of comparative
44
advantage and then trades with other countries to obtain the goods and
services it desires to consume. Behind the free market ideology there is a
model, often attributed to Adam Smith, which argues that market forces
– the profit motive – drive the economy to efficient outcomes as if by
“invisible hand”. In Adam Smith’s model of the market economy, based
on competitive equilibrium, there is no need for government; therefore,
free markets work perfectly. In the recognition of the failings of the
market system, from massive inequality to unlivable cities marred by
pollution and decay, these free market policies have been widely
rejected in the more advanced industrial countries, though within these
countries there remains an active debate about the appropriate balance
between government and markets. Significantly, there are desirable
government interventions which, in principle, can improve upon the
efficiency of the market, because an efficient market economy requires
that all of the assumptions be satisfied. In some cases, reforms in one
area, without accompanying reforms in others, may actually make
matters worse. But this is impossible especially in developing countries.
Market system requires clearly established property rights and the courts
to enforce them, but often these are absent in developing countries.
Moreover, the market system requires competition and perfect
information; but competition is limited and information is far from
perfect. On top of everything, well-functioning competitive markets
can’t be established overnight.
Protectionism
Government interventions
Furthermore, much of trade is not free. While governments across the
globe have lifted numerous barriers to international trade, significant
protections remain. In some cases, these mechanisms promote
environmental protection, public health or stable jobs. (However, in
many cases they are designed not to promote broad social goals but
rather to further the narrow interests of the politically powerful).
Government interventions in trade can take form of:
1. Import barriers.
Making imports more expensive than home-produced substitutes,
and, therefore, reduce a balance of payments deficit.
Countries use a range of mechanisms to control the flow of imports,
including tariffs and so-called non-tariff barriers, such as outright bans
45
on certain products or quotas to limit the amount of products imported.
Often the deep-pocketed corporations are the primary beneficiaries.
2. Export promotion.
In the USA, for example, the Export-Import Bank provides loans
and loan guarantees to exporting firms, while the Overseas PrivateInvestment Corporation provides insurance to U.S. companies investing
abroad.
3. Protecting strategic industries.
Governments often impose tariffs and quotas in order to protect their
strategic industries – notably agriculture – without which the country
would be in danger if there was a war, as well as other jobs. Abandoning
all sectors in which a country does not have a comparative advantage is
likely to lead to structural unemployment in the short/long term.
4. Protecting infant industries until they are large enough to achieve
economies of scale and strong enough to compete internationally.
5. Imposing dumping duties – selling products cheaply in an export
market in order to increase the market share.
To most economists, the dumping duties are simply naked
protectionism.
6. Imposing antidumping measures – usually to stop imported
goods being sold at prices which are lower than in the country
where they were made; to protect its economy from unfair
competition.
In October 2006, the European Commission imposed a definitive
anti-dumping duty on imports on footwear with uppers of leather or
composition leather originating in China. In September 2007, the
Commission decided to investigate, on its own initiative, the possible
circumvention of the anti-dumping measures imposed on the mentioned
products.
With tariffs, it is impossible to know the quantity that will be imported,
because prices might be elastic. With quotas, governments can set a limit
to imports. Yet unlike tariffs, quotas provide no revenue for government.
Other non-tariff barriers that some countries use include so-called safety
norms, and the deliberate creation of customs difficulties and delays.
Trade barriers are, moreover, higher for the products typically
exported by developing countries than for those from industrial9
countries. The average tariff in developing countries is 14%, and in the
9
developed
46
least developed 10 countries, 18%, compared with 5% in the industrial
countries. Developing countries themselves have high tariffs that limit
trade among them. Furthermore, trade barriers tend to be higher for
agricultural than for manufactured goods. Many of the trade barriers
keep poor countries’ agricultural products out of rich country markets.
Agriculture is the dominant economic activity in rural areas, where
three-fourths of the world’s poor live. It accounts for about 27% of GDP
in developing countries, a similar share of exports, and 50% of
employment. Historically, textiles and clothing have played a unique
role in economic development and poverty reduction. Their role in the
industrial revolution in Western Europe and North America is well
known; today, they are enhancing industrialization in the developing
countries. From the mid-1960s to 2000, the developing states’ share of
world textile exports grew from 15% to 50%, and of world clothing
exports, from 25% to 70%.
Nevertheless, the largest developing country exporters tend to have
the highest tariffs. ASEAN (the Association of Southeast Asian
Nations), China and South Asia, have tariffs ranging from 20% to 33%
on textiles, and from 30% to 35% on clothing. These barriers among
developing countries are increasingly providing the growing share of
their trade in textiles and clothing with each other. At the same time,
quotas for textile and clothing imports in the developed countries further
distort trade in this sector. For nearly half a century, world trade in
textiles and clothing has been subject to quantitative restrictions,
beginning with Japan’s 1955 “voluntary restraints” on its exports of
cotton fabrics and clothing to the United States. The most competitive
exporting countries, like China and India, have faced the most stringent
quantitative restrictions, while other suppliers have been able to take
advantage of this situation by charging higher prices. Thus the combined
effect for developing countries of quotas and tariffs on developed
country imports amounts to welfare losses of $24 billion a year and lost
export revenues of $40 billion.
Furthermore, standards and regulations play an important role in
trade by ensuring the quality, safety, and technical compatibility of
products and manufacturing, but they may at times be more stringent
than is appropriate and abused by those seeking to raise the costs of
potential competitors. Low- and middle-income countries are unable to
meet sanitary requirements on more than 50% of their potential exports
10
underdeveloped
47
of fresh and processed fish, meet, fruit, and vegetables into EU. In fact,
these measures are viewed as more important barriers than tariffs and
quotas. Tariff escalation, which is seen in both developed and
developing countries, is designed to protect a processing or
manufacturing industry in the importing country, which sets low tariffs
on imported materials used by its industry and higher tariffs on imported
finished goods that would compete with the domestic industry’s own
products. This creates hurdles for countries trying to move up the
technology ladder, discouraging them from expanding their processing
industries and diversifying exports, and, therefore, leaving them
dependent on commodities, which prices are often volatile.
On top of everything, most economies agree that widely used antidumping measures, have been abused for protectionist purposes. While
industrial countries have traditionally been the main users of such
measures, developing countries have been more active in recent years:
between 1995 and 2005 they initiated almost two-thirds of all antidumping investigations. On the other hand, developing countries have
also been the target of nearly 60% of investigations, most of which have
been initiated by other developing countries. Most anti-dumping actions
have been concentrated in a small number of sectors, especially steel,
chemicals, textiles, and consumer electronics, often at a low-technology
end of the product range.
The EU has imposed an anti-dumping tariff of up to 66% on energysaving light bulbs from China since 2001, which was due to expire in
July 2006. However, this case has once again shown the complexities of
managing anti-dumping rules in a global economy and against the broad
ranged EU interests; it is no good for the European industry as some
major producers do not want the duties to be extended. And also, it is
not good for consumers since the prices are already high because of the
duties. The anti-dumping measures were also criticized by
environmentalists as unjustified in the EU’s fight against global
warming. Moreover, the Switzerland-based World Wildlife Fund
(WWF) urged the EU to end the duties, arguing that Europe has to rely
on imports to meet its demand for low-energy light bulbs, which is
essential to realize the goal of reducing greenhouse gas emissions by
20% by 2020.
Anti-dumping investigations create a great deal of uncertainty for
potential investors in export sectors and discourage exporters from
48
passing on their efficiency gains, thus, focusing consumers and
downstream industries in importing countries to pay higher prices.
Trade liberalization
WTO, NAFTA
The General Agreement of Tariffs and Trade (GATT), an
international organization set up in 1947, had the objectives of
encouraging international trade, of making tariffs the only form of
protectionism, and of reducing these as much as possible. The most
convincing nation clause of the GATT agreement specified that
countries could not have favored trading partners, but had to grant
equally favorable conditions to all trading partners. The final GATT
agreement – including services, copyright, and investment, as well as
trade in goods, was signed in Marrakech in 1994, and the organization
was superseded by the World Trade Organization (WTO).
It took nearly 50 years to arrive at the final GATT agreement
because until the 1980-s most developing countries opposed free trade.
They wanted to industrialize in order to counteract what they rightly saw
as an inevitable fall in commodity prices. They practiced import
substitutions, and imposed high tariff barriers to protect their infant
industries. They were afraid of being excluded from the world trading
system by the development of trading blocks such as the European
Union (EU) and the North American Free Trade Agreement (NAFTA),
both signed in the early 1990-s. So they tended to liberalize their
economies, lowering trade barriers and opening up to international trade.
Further liberalization of merchandise trade, especially of agricultural
products, textiles and clothing, could generate large benefits for them in
terms of incomes, exports, and employment. These benefits would
derive not only from the elimination of access barriers to industrial
country markets but also from reform of the trade regimes of developing
countries themselves.
The opening of markets is win-win proposition – both developed
and developing countries gain. Many developing countries have been
able to develop vigorous and diversified export sectors despite existing
hurdles to market access, but better access would no doubt ease the task.
A number of benefits for moving toward a multilateral trading system
that takes special account of the interests of developing countries,
including eliminating tariff peaks,11 and escalation, providing more
11
tariffs at over 15%
49
capacity-building assistance to developing countries, pursuing a
comprehensive (reasonable) approach to liberalization in agriculture and
accelerating the quotas in trade combined with tariff reductions. The
liberalization of trade in services offers opportunities for developing
countries that are even greater than in merchandise trade: for example, in
labor-intensive services that require the temporary movement of
workers.
With the benefits of liberalization there come a lot of risks and
adjustment needs. It is important to identify these early and take
appropriate action. Liberalization in agricultural trade can have complex
distributional effects. Supportive policies might be revealed in broader
poverty reduction or development strategies. Another risk is that
liberalizing quotas in textiles and clothing trade will expose the lack of
competitiveness of some developing country exporters.
Most developing countries have been unable to overcome the
obstacles to expanding and diversifying their exports. The primary
commodities on which many rely for export earnings have faced
stagnant demand and been battered by volatile prices, and the two
sectors in which developing countries have a strong comparative
advantage – agriculture and labor-intensive manufactures, like textiles
and clothing – are heavily protected not only in the developed countries
but in developing countries as well.
Americans contend that free trade benefits other nations as well.
Economists have long argued that trade allows nations to concentrate on
producing the goods and services they can make most efficiently –
thereby increasing the overall productive capacity of the entire
community of nations. What’s more, Americans are convinced that trade
promotes economic growth, social stability, and democracy in individual
countries and that it advances world prosperity, the rule of law, and
peace in international relations.
An open trading system requires that countries allow fair and
nondiscriminatory access to each other’s markets. On top of everything,
the United States is willing to grant countries favorable access to its
markets if they reciprocate by reducing their own trade barriers, either as
part of multilateral or bilateral agreements. While the efforts to liberalize
trade traditionally focused on reducing tariffs and certain non-tariff
barriers to trade, in recent years they have come to include other matters
as well. Americans argue, for instance, that every nation’s trade laws
and practices should be transparent – that is, everybody should know the
50
rules and have an equal chance to compete. The United States and
members of the Organization for Economic Cooperation and
Development (OECD) took a step toward greater transparency in the
1990-s by agreeing to outlaw the practice of bribing foreign government
officials to gain a trade advantage.
The United States also frequently urges foreign countries to
deregulate their industries and take steps to ensure that remaining
regulations are transparent, do not discriminate against foreign
companies, and are consistent with international practices. American
interest in deregulation arises in part out of concern that some countries
may use regulation as an indirect tool to keep exports from entering their
markets.
Financial markets
IMF, WB
Increasing market access for developing countries is indeed a
necessary first step in helping them grow their economies. But it is not
sufficient. It must be part of a broader strategy in the developing
countries themselves to promote a vigorous supply response.
Inefficiencies in key infrastructure sectors like telecommunications,
transport, and financial services often add more to these countries’
export costs than foreign trade barriers. And further reform of trade
policies and the investment environment in developing countries will be
necessary complements to better market access.
Therefore, opening up to foreign capital may not help much unless
the domestic financial sector and the tradable sector also develop. As a
rule, in countries with weaker financial systems, additional foreign
resources do not translate into stronger growth of financially-dependent
industries. Countries with relatively weaker financial systems increase
savings and become more conservative on investment. So the reformers
in developing countries might want to wait to achieve a certain level of
financial development before pushing for financial integration; the
prospect of financial integration and enhancing competition may be
needed to spur domestic financial development. One approach worth
considering might be a firm commitment to integrate financial markets
at a definite deadline (as China has done in the banking sector in the
context of the WTO), thus giving time for the domestic financial system
to develop without possible adverse effects from capital inflows.
Countries with strong financial systems, on the other hand, have taken
51
advantage by investing and consuming more. For example, Switzerland
has become one of the largest investors and financial centers of the
world. Stable political system and currency attract financiers to the
country. Beyond question is the fact that finance services system,
including banks, insurance and tourism is the main source of the country
revenue. Its capita income is 20% higher than in European countries.
Switzerland is the 5th biggest foreign investor in Russia (after Germany,
Great Britain, the Netherlands and Italy). The whole amount of Swiss
investments to the Russian economy is $770 mln, that is 2.2% of the
whole amount of foreign investments. Russian businessmen actively
work with Swiss banks and trade companies. Nowadays, business
contacts between Russia and Switzerland are turning to brand new level
of their development.
However, many developing countries have huge debts with Western
commercial banks on which they are unable to pay the interest, or repay
the debt. Thus they need to renew the loans, to reschedule repayments,
or to borrow further money (from the IMF), often just to pay the interest
on existing loans. To help countries with unmanageable balance-ofpayments problems, the Bretton Woods conference created the
International Monetary Fund (IMF). Under these circumstances, the IMF
imposes severe liabilities, usually including the obligation to export as
much as possible. The IMF extends short-term credit to nations unable
to meet their debts through conventional means (by increasing exports,
taking out long-term loans, using reserves). The IMF, to which the USA
contributed 25 % of an initial $ 8,800 million in capital, often requires
chronic debtor nations to undertake economic reforms as a condition for
receiving its short-term assistance.
Countries generally need IMF assistance because of imbalances in
their economies. Traditionally, countries that turned to the IMF had run
into trouble because of large government budget deficits and excessive
monetary growth, that is, they were trying to consume more than they
could afford based on their income from exports. The standard IMF
remedy was to require strong macroeconomic medicine, including
tighter fiscal and monetary policies, in exchange for short-term credits.
But in the 1990-s, a new problem emerged. As international financial
markets grew more robust and interconnected, some countries ran into
severe problems paying their foreign debts, not because of general
economic mismanagement but because of abrupt changes in flows of
private investment dollars. Often, such problems arose not because of
52
their overall economic management but because of narrower “structural”
deficiencies in their economies. This became especially apparent with
the financial crisis that gripped Asia in 1997.
In the early 1990-s, countries like Thailand, Indonesia, and South
Korea astounded the world by growing at rates as high as 9% after
inflation – far faster than the United States and other advanced
economies. Capital flows into the Asia-Pacific region surged from just $
25,000 million in 1990 to $ 110,000 million by 1996. In the wake of the
Asian crisis, leaders from the United States and other nations increased
capital available to the IMF to handle such international financial
problems. Recognizing that uncertainty and lack of information were
contributing to volatility in international financial markets, the IMF also
began publicizing its actions previously, the fund’s operations were
largely cloaked in secrecy. In addition, the United States pressed the
IMF to require countries to adopt structural reforms. In response, the
IMF began requiring governments to stop directing lending to politically
favored projects that were unlikely to survive on their own. It required
countries to reform bankruptcy laws so that they can quickly close failed
enterprises rather than allowing them to be a continuing drain on their
economies. It encouraged privatization of state-owned enterprises. And
in many instances, it pressed countries to liberalize their trade policies –
in particular, to allow greater access by foreign banks and other financial
institutions.
The IMF also acknowledged in the late 1990-s that its traditional
prescription for countries with acute balance-of-payments problems –
namely, austere fiscal and monetary policies – may not always be
appropriate for countries facing financial crises. In some cases, the fund
eased its demands for deficit reduction so that countries could increase
spending on programs designed to alleviate poverty and protect the
unemployment.
The Bretton Woods conference that created the IMF also led to
establishment of the International Bank for Reconstruction and
Development, better known as the World Bank (WB), a multilateral
institution designed to promote world trade and economic development
by making loans to nations that otherwise might be unable to raise the
funds necessary for participation to their economic importance. The
World Bank receives its capital from member countries, which subscribe
in proportion to their economic importance. The United States
contributed about 35% of the WB’s original $ 9,100 million
53
capitalization. The members of the WB hope nations that receive loans
will pay them back in full and that they eventually will become full
trading partners.
In its early days, the WB often was associated with large projects,
such as bam-building efforts. In the 1980-s and 1990-s, however, it took
a broader approach to encouraging economic development, devoting a
growing portion of its funds to education and training projects designed
to build “human capital” and to efforts by countries to develop
institutions that would support market economies.
Reading
Fortune favors the brave!
New Zealand Economy
Banking Interdependence
I
Over the past 20 years the government has transformed New
Zealand from an agrarian economy dependent on concessionary British
market access to a mass industrialized, free market economy that can
compete globally. This dynamic growth has boosted real incomes (but
left behind many at the bottom of the ladder), broadened and deepened
the technological capabilities of the industrial sector, and contained
inflationary pressures. Per capita income has risen for six consecutive
years and is now more than $23,000 in purchasing power parity terms.
New Zealand is heavily dependent on trade – particularly in agricultural
products (diary products, meet), wood and wood products, fish,
machinery – to drive growth. Its imports involve machinery and
equipment, vehicles and aircraft, petroleum, electronics, textiles,
plastics. Exports are equal to about 20% of GDP. Thus far the economy
has been resilient, and the Labor Government promises that
expenditures on health, education, and pensions will increase
proportionately to output.
New Zealand exports goods to: Australia – 21%, the USA – 14,4%,
Japan – 11,3%, China – 5,4% , the UK – 4,7%.
New Zealand imports from: Australia – 22, 4%, the USA – 11,3%,
Japan – 11,2%, China – 9,7%, the UK – 5,2%.
Therefore, the main trade partner (export-import) of New Zealand is
Australia.
54
Moreover, business contacts between New Zealand and Australia
are too close. Westpac, one of Australia’s big four clearing banks, joined
the race to buy the National Bank of New Zealand from Lloyds TSB for
an estimated $ 3.9 billion. The sale, although hardly significant in terms
of earnings, had to bring in plenty of capital. Interest in a bid for Lloyds
TSB’s National Bank of New Zealand grew as Westpac Banking
Corporation, reported that it has put a request to New Zealand’s
competition authorities to acquire the country’s largest bank. Lloyds
NSB has been off form for some time. Shares lagged behind the other
runners in the banking sector, weighed down by fears over the dividend
and the demands of its life assurance subsidiary (Scottish Widows) in
Scotland. Mr. Daniels, the new boss, decided that drastic action was
needed. So the widespread interest in the operation New Zealand –
Westpac – was welcome.
Vocabulary
сoncessionary – концессионный, льготный
to boost – повышать, поднимать
inflationary pressures – инфляционный прессинг
six consecutive years – шесть последних лет
vehicle – транспортное средство
petroleum - бензин
resilient – способность восстанавливаться, возрождаться
expenditures - затраты
bid – предложение цены (сделка)
to be off – менять положение, местонахождение
to lag behind – отставать
assurance subsidiary – надежный филиал
drastic action – сильное воздействие, крутая мера
II
A disposal at $ 3.9 billion had to go some way to restoring Lloyds’s
depleted balance sheet. Lloyds needed a more robust balance sheet for
several reasons:
- Rules, due for implementation in 2005, required banks to set
aside more capital to support life assurance operations. Mr.
Daniel made it clear that he wanted to retain Scottish Widows.
- Better finances had to ease the need for a dividend cut Lloyds
TSB, whose shares yield nearly 8%, distributed more than 90% of
available profits. Many shareholders, particularly the army of
private investors, liked it to continue doing so.
55
- The bank also had a large pension fund deficit to finance. Lloyds
had to upper its contributions to help to close the $3,5 billion
gap. If equity markets failed to rally sufficiently, the deficit
would to be recorded as a capital liability under new accounting
standards.
- More importantly, Lloyds TSB had to improve its capital base if
Mr. Daniels’s ambitions were to be fulfilled. He wanted to return
to the bread and butter of banking using capital to lend to
individuals. In the mortgage market, Lloyds began to act more
aggressively.
At first its share of the market doubled to 9,5%. However, it will
take a while to see whether this strategy is working. In the meantime,
Lloyds is unlikely to pull ahead of the pack. The Lloyds is to catch up
with HOBS (the Edinburgh bank), it must compete for business in
mortgages and credit cards. HOBS, meanwhile, is going after a greater
share of the life and pensions market.
James Crosby, the CEO (chief executive) of newly merged HOBS
(in 2001) made clear that the group’s focus was on the UK. His now
well-worn argument was that argument was that HOBS created a “fifth
force” in high street banking to take on the might of Royal Bank of
Scotland and Lloyds TSB. To a large extent, it has succeeded.
Under Mr. Daniels, Lloyds is gradually pulling back from its
international operations to form on its core national market following
the increased competition. HOBS has offices in Adelaide, Brisbane,
Melbourne and Sydney. According to the group’s website, the interstate
markets account for almost 45% of BankWest’s total lending. Under the
guidance of George Mitchell, HOBS’s head of corporate banking,
BankWest will be expanded into the more populous eastern states. But
in reality, it is already there, selling financial products through finance
brokers and affinity partnerships.
Vocabulary
depleted balance sheet – истощенный баланс
robust – мощный, полный
gap – пропасть, разрыв
equity market – рынок ценных бумаг
to rally – повышаться в спросе
capital liability – финансовое обязательство
mortgage market – рынок недвижимости
to merge – поглощать, соединять(ся), сливать(ся)
56
core – ключевой
populous - населенный
broker – брокер
affinity – близкий
III
New Zealand is a part of the global world. It is worth mentioning
that serious talks about cross-border bank mergers are getting under
way. Italy’s largest bank, UniCredit, and Germany’s second largest,
HVB Group, confirmed that they were in talks about a “potential
business combination”. Two smaller takeover attempts in Italy seem to
be slipping away from the foreign bidders, Spain’s Banco Bilbao
Vizcaya Argentaria and the Netherland’s ABN Amro. But a study by A.
T. Kearney, a consulting firm, suggests that domestic mergers are the
only ones worth doing. Its analysis of 2002 year’s takeover of Abbey, a
British bank, by Spain’s Santander Central Hispano (SCH) concludes
that it “does not create value”. The least bad cross-border deals, the
firm’s analysis suggests, would involve the French, putting BNP Paribas
with Deutsche Bank, Germany’s largest Bank, with Switzerland’s UBS.
But these would still destroy value. An all-British affair involving
Barcbys and Lloyds TSB, would be a winner. Such skepticism, both
sides could gain from a deal, revealing in cutting costs and raising
profitability. Moreover, their interests in corporate banking, general
insurance and wealth management could be pulled together, the crossborder mergers (wholly-owned bank) would be a useful jumping-off
point for its international ambitions. New leadership could bring new
vitality. Such mergers can work sufficiently if the buyer (WestpacAustralia) brings more sophisticated information (technology and risk
management) to the target. That has happened to some extent at Lloyd
N.Z. since it was bought by Westpac. Then, the clear plus-point of the
New Zealand – Australia deal, however, is that Lloyds & Westpac’s
assets would make a good fit. Nevertheless, it will take a while to see
whether this strategy is working.
Vocabulary
takeover – поглощение
bidder – участник торгов (сделки)
sophisticated information – необходимая (достоверная, свежая) информация
57
After-reading tasks
1. Choose the correct definition for each word
1/consecutive (years)
a/recent years
b/a century ago
2/expenditures
a/goods
b/costs
3/vehicles
a/cars
b/wheels
4/bid
a/deal
b/price
a/severe
b/urgent
a/to race
b/to demonstrate
5/drastic (action)
6/to rally
2. Match the term with its definition
Bid
Equity market
Subsidiary
Mortgage market
Liability
Expenditures
Inflation pressure
Domestic mergers
Finance brokers
a/the buying and selling of shares
b/causing price increases
c/the total amount of money which is
spent during a particular period of time
d/a price offered to buy smth.
e/a company that is at least half-owned
by another company
f/one of the parts into which ownership
of a company is divided
g/when two or more companies join
together to form a larger company
h/an amount of money owed by a
business to a supplier, lender
i/a market for loans to people and
organizations buying property
j/a person (organization) that buys and
sells securities, property, shares
58
Share
3. Use the following idioms to complete the sentences below
lag behind; the bread and butter;
make a good fit; pull ahead; catch
up with;
1). Shares … the other runners in the banking sector.
2). The Lloyds is to … HOBS.
3). He wanted to return to the … of banking using capital to lend to
individuals.
4). It will take a while to see whether the strategy is working, therefore,
Lloyds is unlikely to ….
5). Lloyds & Westpac’s assets would ….
4. Match A to B
A
Well-worn
Clear-plus-point
Jumping-off
Been off
High street
B
deal
banking
argument
point
form
5. Complete the chart “New Zealand partners” according to the text
Australia Japan
China
UK
USA
export
21%
5, 4%
14, 4%
import
11, 2%
5, 2%
6. Translate into English.
Иммиграция специалистов и предпринимателей
в Новую Зеландию.
Новая Зеландия стремится создать преимущества для выезда
предпринимателей из других стран. Различия в процессе
иммиграции
специалистов
и
предпринимателей
весьма
59
существенны и требуют особого подхода. Прежде всего, это разные
типы людей. Специалист привык на кого-то работать, поэтому он
верит в фатальную неизбежность бюрократических процедур и
готов им подчиняться.
Предприниматель, напротив, привык быть хозяином своей
судьбы и склонен искать собственные решения. Ему кажется, что
сложности
иммиграционной
процедуры
можно
обойти.
Информационные
потребности
специалиста
достаточно
универсальны – экономико-географические особенности страны,
работа и социальное обеспечение – поэтому их легко
удовлетворить.
Предпринимателя
интересуют
деловая
инфраструктура: налоги, таможня, банки и т.д., а также детали
конкретного бизнеса.
Для предпринимателя, подающего заявление на долгосрочную
бизнес-визу, главным документом является реалистичный и
хорошо обоснованный бизнес-план будущего делового проекта в
Новой Зеландии. Это отнюдь не формальный документ, и его
разработка требует проведения маркетинговых исследований
именно в Новой Зеландии, а не теоретических измышлений на
родине. Сопроводительные документы, демонстрирующие опыт в
бизнесе и легитимное происхождение денег клиента, также
непросто подготовить, учитывая известные особенности специфики
страны.
Таким образом, иммиграционная фирма в вашей стране должна
привлечь новозеландского специалиста по бизнес планированию,
чтобы сделать анализ рынка для будущего проекта и разработать
бизнес-план, а лишь затем подготовить необходимый пакет
документов.
Для решения финансовых вопросов нужна третья инстанция –
специалист по инвестиционному и финансовому планированию, а
позже понадобится и четвертая – консультант по организации и
старту бизнеса в Новой Зеландии.
7. Expand on the following
1. Business contacts between New Zealand and Australia are too close.
2. New Zealand is a part of a global world.
60
The transition economy countries
China. The Ukraine
Modern system of international relations is now experiencing one of
the most complicated periods. The present transitional period is
characterized by both competition and cooperation of countries. All
transition economy countries faced the challenge of developing new
policies for international environmental cooperation. The wave of
transition to market economy involved the countries of former socialist
camp at the end of the 1980-s – and the beginning of the 1990-s (except
for China, which reforms have been held since 1978, and Hungary
which has begun slow progress to the market from the end of the 1960s). The ruin of command (state-planned) economy was not casual for
countries of East Europe. This process carried objective character and
was connected to a number of problems, which were designated already
from the very beginning. The availability of deficiency was always
characteristic for command economy. The costs of growth always were
very high in comparison with results: the efficiency without delay fell
than grew.
The high costs of growth have resulted in a low scale of living in
comparison with countries of advanced market economy. Moreover, the
socialist economic system has appeared unreceptive to technical
progress and innovations. The weak stimulus not only failed to
supply/ensure a satisfactory level of efficiency, but even have resulted in
low and more worsening quality.
The extensive growth provoked the unreasonable load on the
environment as well. In the course of time these results became more
sorrowful. The falling of growth rates was gradual, but stable. Many
countries of East Europe have gone through heavy recession.
Thus there are several main objectives of the external policy of the
transition economy countries:
-
their membership and active cooperation in the international
community
participation in economic integration
The strategy of foreign policy of the transition economy countries has to
be based on the deep realization of their responsibility for the current
political and economic situation and for further world community
development, on the multilateral recognition of the interests and rights of
other states to peaceful and sustainable development.
61
China
Studying China’s experience should augment our knowledge about
transition to markets in particular. There are three main lessons from
China’s transition path:
1. Reforming a socialist economy can be successful, the planned system can be
evolved smoothly to a market system, and there are various paths for
making a good transition.
2. Considerable growth is possible with sensible but not perfect institutions.
3. Our knowledge about how a capitalist market economy works is still
limited, our knowledge about the transition process is even more limited.
Between organic development and accelerated privatization China chose
the first strategy; the emphasis has been put on a healthy growth of the
private sector other than a rapid privatization. This has been the key to
success. With such an arrangement, China gradually established a
pattern of a multi-ownership economy starting with which it moves
towards a full-fledged market economy. Report of International
Development Research Center (Canada) and the State S&T Commission
(China), “A Decade of Reform: S&T Policy in China” (1997)
recommended: “As China’s socialist market economy evolves, the
government of China should give thought to how it can tap into the
growing experience of enterprises, universities, and R&D institutes as it
continues to evolve policies for the promotion of innovation and
technological change in the light of the ever-changing global economic
system… China is still highly focused on R&D policy… an important
subset of innovation policy, but not as comprehensive a concept. China
should now turn some of its attention to the National Innovation System
mode of analysis as a means of identifying the future needs for reform in
the S&T system and in the S&T system’s relationship to overall
economic and social activity in the country.” 12
Under the terms of China’s 2001 accession to the World Trade
Organization, members of the trade body can treat China as a “nonmarket economy” until 2016. So far, 43 nations have recognized China
as a full market economy but the country’s major trade partners
including the United States, the European Union and Japan have yet to
do so. The non-market economy status has left China a victim of
rampant anti-dumping measures imposed by other WTO members,
which often use production costs in other countries to evaluate whether
Chinese exports are dumped or unfairly priced. However, China’s
12
IDRC and SSTC, 1997.
62
Ministry of Commerce announced that totally 51 countries have declared
recognition of China’s full market economy status since New Zealand
did so in April 2004 (Beijing-based Jinghua Time).
In November 2005, the Republic of Korea became the first country
that recognized China’s full market economy that year. The move would
strongly push forward economic and trade cooperation between the two
countries. Hu, Chinese president, put forward a four-point proposal on
further developing all-round cooperation between the two countries:
-
-
-
to enhance political mutual trust by establishing a hot-line at the
foreign ministerial level for timely exchange of views on major issues
of common concern
to double the current annual trade volume of 100 billion US dollars by
the end of 2012
to expand exchanges in the fields of culture, education, science and
technology, health and environmental protection, to increase contacts
between young people of the two countries
to strengthen consultation on international affairs and work jointly for a
new world political and economic order that is far and just
Moreover, the Republic of Korea accorded China full market-economy
status to protect Chinese exports from anti-dumping duties. Since the
establishment of diplomatic ties between the two countries 13 years ago,
partnership in all fields has grown rapidly. This has brought tangible
benefits to the peoples of both countries. Bilateral cooperation has not
only fueled the development of both countries, but also made important
contribution to safeguarding peace and stability on the Korean
Peninsular and the entire Northeast Asia as well.
The Ukraine
Traditionally, recognizing countries as market economies by the EU
and the USA leads to other WTO member-nations’ automatic
recognition. Before September 2004 negotiations on legal aspects of the
Ukraine being recognized as a market economy by the USA was
entrusted to the Ukraine Ministry of Economics. The European Union
granted the market economy nation status to the Ukraine on December
1, 2005. The USA has officially recognized the Ukraine as a market
economy on February 1, 2006.
The Ukraine has been expecting the US to recognize the Ukraine as
a market economy since 2001. It is only after longtime concerted efforts
of the government and private business, conclusions of the Ukraine and
American lawyers, and the EU decisions that the US agreed to meet the
63
Ukraine halfway and grant it market economy status. To assess
“marketness,” the US adhered to the following criteria in accordance
with its trade law: convertibility of the national currency, setting wages
on the basis of collective bargaining between employees and employers,
restrictions to foreign investments, governmental ownership of and
control over the means of production, governmental control of resources
distribution, price formation and the choice of businesses to produce
items at their own discretion. The US confirmed that the Ukraine meets
these criteria and can be considered a market economy.
In what way can the Ukraine benefit from this status? The notion
“market economy country” is usually used during anti-dumping
investigations and is thus of great importance for international trade
relations and particularly for the countries to which the Ukraine is or
will be exporting its goods.
The market economy nation status will allow the Ukrainian residentbusinesses to challenge anti-dumping steps, which were earlier made, in
US courts, appeal, during anti-dumping investigations, to average prices
for their commodities on the Ukraine’s and international markets.
Recognizing the Ukraine a market economy also has many other
economically positive effects. First, the recognition of the Ukraine as a
market economy by the USA (as well as the recognition by the EU) will
be a signal for many states, important trade partners of the Ukraine, to
make a similar decision. As of today, Brazil, Mexico, India and some
other countries still consider the Ukraine a non-market economy. After
making this kind of decision, these countries will reduce the number of
anti-dumping investigations, revise their existing attitudes, and, in
general, make their markets more accessible. Secondly, this access to the
markets of developed states will bring about reorientation of export from
the countries of Asia and Africa to more economically developed
countries. This will turn boost the development and technological
progress of export-oriented industries and increase employment and cost
effectiveness, which will eventually improve this country’s overall wellbeing. Thirdly, this will considerably improve the Ukraine’s image on
the arena of international trade and investments.
Victor Yushchenko, president of the Ukraine, welcomed a US
resolution to recognize the Ukraine as market economy and believed it
would confirm strategic relations between the two countries. Moreover,
it will help the Ukraine forge closer economic ties with other countries
and promote its commodities on the US market, one of the world’s
64
biggest markets. The recognition of the Ukraine as a market economy
nation shows that “the world and our partners notice the changes in the
Ukraine and the irreversibility of all launched reforms.”
Market economy status is undoubtedly a positive thing. Yet this
status also has a drawback: application to the Ukraine of the
compensation measures that are not applicable to non-market economies
(actions against the goods which production is heavily subsidized by the
state). The Ukrainian exporters that enjoy governmental support may
become the object of such investigations in the USA. However, it should
still be noted that in practice compensation investigations and duties in
general are resorted much more seldom than anti-dumping measures.
Tough budgetary discipline – the core of the market economy
Macroeconomic stabilization
What we are interested in is how the Ukraine, Russia and other FSU
(Former Soviet Union) countries are different, how transition economies
adopt to the institutions of the market economies and how do people
learn and accept different types of behavior. All countries are different,
some more different than others. How do we really take into account
national differences? We use them in analyzing real patterns and models
of current day economics. The way we look at these differences, has
become the subject of a serious study. For example, under the command
system, the authority of the enterprise manager had nothing to do with
whether or not the enterprise was profitable. Since each enterprise was
part of a comprehensive hierarchy, the state exercised rigid control over
the appointment of managers and made sure that they fulfilled the tasks
assigned to them, including the achievement of wide-ranging social
aims. Under market conditions, because profits are the very essence of a
manager’s authority, the soft budget constraint (a lack of financial
accountability by enterprise managers) is rare and always temporary.
The market economy is founded on very tough budgetary discipline.
In Central European countries (former socialist states), such as
Hungary and Poland, (that found themselves in a similar situation) the
aspirations of the part of the political elite to conform to Western norms
of macroeconomic stabilization require a slowdown in the rate of money
creation, a reduction in the budget deficit and the elimination of soft
budget constraints. In these countries these aspirations were reinforced
by the elite’s commitment to join the European Union. The governments
of these countries acted resolutely and quickly to impose serious harsh
65
discipline on enterprises during the early stages of the transition. The
Czech Republic provides an interesting example because of all the
socialist countries, it found itself in the best financial condition at the
moment of the crash of the state-planned economy, and its financial
condition remained strong during the first years of transition. Lulled into
complacency as a result of its financial advantages, the government
failed to harden budget constraints on enterprises. Despite the Czech
Republic’s vaunted macroeconomic efficiency, the government delayed
restructuring. The result of the delay was the loss of the precious years
of development.
In the majority of cases, macroeconomic stabilization in the postsocialist countries is inseparable from the microeconomy. Stabilization
cannot go forward without budgetary restraint at the enterprise level and
wholesale restructuring of inefficient operations. In Russia
macroeconomic policy during the first years of transition was extremely
weak, mainly because of a lack of political consensus and a division of
political power. Inadequate budgetary and monetary constraints at the
macroeconomic level combined with inadequate budgetary constraints at
the enterprise level. Between 1995 and the first half of 1998, the
government struggled against easy budgetary restraints at the enterprise
level, huge budgetary imbalances at the macroeconomic level, and weak
monetary policy. It succeeded in tightening monetary policy, but it
continued to struggle with its microeconomic and macroeconomic
budgetary problems. It should be understood that hardening the budget
constraints is important not only for raising budget revenues but also for
allowing market mechanisms to work and thus for increasing the
efficiency of the economy.
Macrostability (alongside with privatization and liberalization) is
supposed to create a climate to attract investment, including from
abroad. This investment creates growth. Foreign business brings with it
technical expertise and access to foreign markets, creating new
employment possibilities. Foreign companies also have access to sources
of finance, especially important in those developing countries where
local financial institutions are weak. Such approach would also bring
part of the world out of poverty and improve the quality if life in
developing and underdeveloped countries.
It is in the world’s best interest to have a better developed planet,
and a great way to accomplish that is to have industrialized nations
helping, and not hindering, developing or underdeveloped nations. Such
66
policy would provide cures for diseases, increase food availability,
improve the economy, and provide higher standards of living and
education.
TEXTS
Reading
How China runs the world economy
“If you want one year of prosperity, grow grain. If you want ten years of
prosperity, grow trees. If you want 100 years of prosperity, grow people”.
(Chinese proverb)
I
The entry of China’s massive labor force into global economy may
prove to be the most profound change for 50, and perhaps even for 100,
years. China, along with the other emerging giants, India, Brazil and the
former Soviet Union, has effectively doubled the global labour force,
hugely boosting the world’s potential output and hence its further
prosperity. China’s growth rate is not exceptional compared with
previous or current emerging economies in Asia, but China is having a
more dramatic effect on the world economy because of two factors: not
only does it have a huge, cheap workforce, but its economy is also
unusually open to trade. As a result China’s development is not just a
powerful driver of global growth; its impact on other economies is also
far more pervasive.
Beijing’s new influence was clear from the shock waves in global
currency, bond and commodity markets after it announced that the yuan
will no longer be pegged to the dollar. Until a couple of years ago
nobody cared much that the Chinese yuan was pegged to the dollar.
Recently, though, this link has become one of the hottest issues in
international politics widely blamed in America for its huge trade
deficit. More important is the breaking of the yuan’s formal link to the
dollar and the shift to a so-called “managed float” against a basket of
currencies. In theory, this allows considerable scope for a further rise
in the yuan against the dollar, though it is unclear by how much the
Chinese authorities will allow the yuan to climb. It is certainly a step in
the right direction for China itself, as greater currency flexibility will
give it more room to use monetary policy to steer the economy. More
interesting are the implications for the world economy. This might be
the beginning of the end of what has been dubbed a revived Bretton
67
Woods system of fixed exchange rates between China (and other Asian
economies) and America.
Under this arrangement, China has provided cheap finance to
America’s consumers and its government by buying Treasury bonds. If
the switch to a currency basket causes China to reduce its new
purchases of dollar assets, then American bond yields could rise. If
China has contributed to America’s deficit it is not through its
undervalued exchange rate, but by holding down bond yields and so
fuelling excessive household borrowing and spending. From this point
of view, global monetary policy is now made in Beijing, not
Washington.
The popular focus on the yuan, America’s trade deficit and jobs as
China’s main impact on the rest of the world stretches much deeper than
its exports of cheap goods: it is revolutionizing the relative prices of
labour, capital, goods and assets in a way that has never happened so
quickly before.
Vocabulary
labour force – производительные силы
emerging - появившийся
boosting - повышающий
growth rate – уровень роста
dramatic effect – существенное (решающее) влияние
pervasive – проникающий (распространяющийся повсюду)
yuan – юань (денежная единица Китая)
to be pegged to the dollar – быть привязанным к доллару
trade deficit – торговый дефицит
“managed float” – управляемые потоки
a basket of currencies – валютная корзина
considerable scope – внушительный масштаб
currency flexibility – гибкость (подвижность) валют
implication(s) - применение
to dub – обрубать (дублировать)
revived - оживленный
exchange rates – обменный курс
purchase(s) - покупка
bond yields – количество акций
undervalued - недооцененный
excessive - чрезмерный
II
A recognition of China’s profound and widespread impact on the
world economy explains various current economic puzzles.
68
Take, for instance, the oil price. Since the beginning of last year, oil
prices have doubled, yet in contrast to previous oil shocks, inflation rates
remain low and global growth robust. The answer to the riddle is
China. To the extent that oil prices are driven up by strong Chinese
demand rather than, as in the past, an interruption of supply, the are less
likely to hurt global growth. And the impact of higher oil prices on
inflation has been offset by falling prices of all sorts of goods from
cameras and computers to microwaves and bicycles – thanks to China.
In addition, competition from China and the threat that firms in
development countries might shift offshore also helps to keep a lid on
wages and hence inflation.
Another oddity is that, while the prices of most goods are falling,
house prices are soaring in many countries. Again, the answer is China.
Cheaper goods from China have made it easier for central banks to
achieve their inflation goals without needing to push real interest sharply
higher. This has encouraged a borrowing binge. The resulting excess
liquidity has flowed into the prices of assets, such as homes, rather than
into traditional inflation. And, last but least, there is the conundrum
which has puzzled Alan Greenspan, head of America’s central bank:
why are American bond yields so low despite robust growth and hefty
government borrowing? Part of the answer lies, once again, with China,
which has bought large quantities of Treasury bonds to hold down its
currency.
Over the coming years, developed countries’ inflation and interest
rates, wages, profits, oil and even house prices could increasingly be
“made in China”. How should the world’s policymaker respond to
China’s growing economic clout? Trying to halt China’s growth through
protectionist measures, as many American congressmen would like to
do, would be a disaster, for it would close off a powerful source of
future global prosperity.
A better way to deal with China’s growing power would be to give
the country a bigger stake in global economic stability. China should be
a full member of international economic policy forums, such as the G 7
and the OECD. Western policymakers would be wise to remember
another Chinese proverb: “What you cannot avoid, welcome”.
(From The Economist)
69
Vocabulary
robust – мощный, дюжий
riddle - загадка
offshore – зд. заграница
soaring - растущий
borrowing binge – заемные средства
excess liquidity – большое количество ликвидных средств
conundrum - загадка
hefty – огромный, дюжий
hold down – сдерживать, снижать
clout – зд. прорыв (сила)
stake – ставка
After-reading tasks
1. Choose a) b) c)
1. The Chinese yuan was pegged to the ....
a) dollar
b) euro
c) pound
2. “What you cannot …, welcome,” says the Chinese proverb.
a) buy
b) avoid
c) change
3. China is having a more … effect on the world economy.
a) negative
b) dramatic
c) unusual
4. Until a … of years ago nobody cared much that the Chinese yuan was
pegged to the dollar.
a) couple
b) pair
c) bundle
5. If the switch to a currency … causes China to reduce its new
purchases of dollar assets, then American bond yields could rise.
a) bag
b) purse
c) basket
6. From this point of view, global policy is now made in ….
a) Beijing
b) London
c) Washington
7. The resulting excess liquidity has flowed into prices of …, such as
homes.
a) assets
b) goods
c) estates
2. Match the words
1/monetary
2/trade
3/exchange
4/dollar
5/currency
a/yields
b/assets
c/deficit
d/policy
e/rate
70
6/bond
7/protectionist
f/measures
g/basket
3. Match the synonyms
1. hefty
a/widespread
2. conundrum
b/robust
3. workforce
c/influence
4. impact
d/puzzle
5. pervasive
e/employees
4. Match the parts of the compound words
1/work
a/shore
2/policy
b/force
3/shock
c/maker
4/congress
d/hold
5/under
e/valued
6/off
f/spread
7/house
g/men
8/wide
h/waves
5. Think of as many words as you can to make collocations to
complete the spidergram
…
….
….
economy
global
…
…
…
development
6. Translate into English
1.Секрет невероятного успеха, которого добились местные власти
Китая с помощью реформ и стимулирования предпринимательства
важно перенять другим странам с переходной экономикой, прежде
всего в Центральной Европе и СНГ.
2. Черты переходного периода следующие:
-снижение роли государства как экономического руководителя
-стагнация хозяйственной деятельности
-уход от ответственности за большую часть местного производства
и распределения.
71
3. В дополнение к потенциальной роли стимулятора экономического
развития местные власти в странах переходного периода уже
являются экономическими агентами, в целом гораздо более
значимыми, чем в длительно существующих рыночных экономиках.
4. Для стран Центральной Европы и СНГ опыт Китая важно
распространить на низовом уровне, где он может оказаться
наиболее востребованным и даст заметный результат.
5. В общей реформаторской тенденции стали лучше сочетаться
стремление расширить пространство для действия рыночных сил и
потребность
сократить
объем
планирования,
принятие
стратегических решений на национальном уровне и отказ от
детализации микроэкономических действий.
Основные черты китайской реформаторской модели 1978-2000г.г.
можно свести к следующим элементам:
- постепенный отказ государства от руководства непосредственным
административным планированием путем приказов и финансового
давления;
- создание возможностей для действия рыночных сил в сфере
производства и торговли, включая существенную либерализацию
цен на товары и услуги (одновременно с этим продолжают
действовать различные типы административно устанавливаемых и
контролируемых цен);
- Менеджерам (управляющим) на предприятиях предоставляются
более широкие права контроля над текущей работой предприятий,
от них требуется все большая ответственность за принятие
решений;
- заработная плата и выплаты увязываются с индивидуальными
результатами труда для стимулирования более высокой
производительности и эффективности;
использование
иностранных
технологий,
извлечение
максимального эффекта от иностранного участия в экономике.
7. Expand on the following
1. China’s dramatic effect on the world economy.
2. Cheaper goods from China have made it easier for central banks to
achieve their inflation goals.
Reading
“The reason a country chooses to sign a treaty is that the expected
benefits outweigh the loss of sovereignty. If the expectation is not realized, a
country can terminate its membership.” (Reply Quote)
72
Strengths & Weaknesses of
Canada’s economy
I
As an affluent, high-tech industrial society, Canada today closely
resembles the US in its market-oriented economic system, pattern of
production, and high living standards. Since World War II, the
impressive growth of the manufacturing, mining, and service sectors has
transformed the nation from a largely rural economy into one primarily
industrial and urban. Canada started the 1990s in recession, and real
rates of growth have averaged only 1.1% so far. Because of slower
growth, Canada still faces high unemployment – especially in Quebec
and the Maritime Provinces – and a large public sector debt. With its
great natural resources, skilled labor force, and modern capital plant,
however, Canada will enjoy better economic prospects in the future.
Moreover, the continuing constitutional impasse between English-and
French-speaking areas is raising the possibility of a split in the
federation, making investors somewhat edgy.
Canada’s industry is characterized by significant foreign ownership,
with many companies being subsidiaries of large US aerospace and
defense corporations. Canadian-owned companies such as CAE
Electronics and COM DEV are small in comparison with the US
aerospace and defense giants and do not enjoy a commensurate level of
support from large domestic defense and space budgets. As a result, the
range of design and manufacturing expertise as well as system
integration capability in the Canadian industry is more limited. Given
the small Canadian market, Canadian companies’ successes have
emanated from the international marketplace as manufacturers of small
systems and subsystems for specialized niche markets. However,
Canada’s niche industry and subsidiary connections to the US defense
industry partly explains why Canada’s share of world investment in
Information and Communications Technologies (ICT) R&D is as high as
2.7%. Some of Canada’s industry is strongly independent and is situated
to do very well in the long term. For example, the wholly owned GM
division in London, Ontario, is set to sign a multibillion dollar contract
to sell 2000 of its Light Armored Vehicles to the US Army.
73
Vocabulary
affluent – богатый, состоятельный
rural - сельский
recession - упадок
to average – насчитывать в среднем
impasse - тормоз
to make edgy - заставлять нервничать, злить
subsidiary – дочернее предприятие, филиал
commensurate - соответствующий
to emanate – исходить, происходить, образовываться
niche market – небольшой сегмент рынка для сбыта определенного товара
II
Canada has an enormous resource base, and it has one of the highest
standards of living in the world. Since the mid-1980s, however,
manufactured exports have faced increasing competition, while prices for
its primary exports fluctuate. It is the world’s largest exporter of fish, furs,
and wheat. Minerals have played a key role in Canada’s transformation
into an urban-industrial economy. Alberta, British Columbia, Quebec, and
Saskatchewan are the principal mining regions. Ontario and the Northwest
and Yukon Territories are also significant producers. Canada is the largest
producer of uranium and potash, the third-largest of asbestos, gypsum, and
nickel, and the fourth-largest of zinc. Oil and gas are exploited in Alberta,
off the Atlantic coast, and in the northwest – huge additional reserves are
thought to exist in the high Arctic. Canada is also one of the world’s top
hydroelectricity producers. Canada’s most important relationship is with
the USA. Though relations are on the whole good, there are tensions.
Notably, Canada has protested over US duties on its softwood timber
more basic level. Canadians are wary of the encroachment of US culture
and of its social ills. Canada opposes the US sanctions imposed on Cuba
and protests over its environmental lapses: there are concerns over the
transportation of Alaska oil and US resistance to international treaties (the
USA refuses to sign the Kyoto Protocol, signed by Canada in 2002).
Canada has backed the US-led “war on terrorism”, but refused to support
the 2003 attack on Iraq.
A broad and rich resource base provides exports, raw materials for
manufacturing sector and massive cheap also large oil and gas reserves.
Agriculture and forestry contribute 2% of GDP, mining 4%. Successful
manufacturing sector, contributes of GDP, especially forestry products,
transportation equipment, and chemicals provides access to huge US and
74
Mexican markets through the North American Free Trade Agreement
(NAFTA).
NAFTA, a hotly debated issue in Canada when it was being
negotiated in the early 1990s, produced a trade boom, especially for
Ontario. However, Canadians have problems competing for foreign
investment with Mexico, where labor costs, social welfare, and
environmental standards are lower. Most Canadians oppose such ideas
as a currency union and ever closer integration with the USA. Canada
abrogated many prerogatives of its sovereignty and a large swath of
national interest to get the softwood lumber deal with America. The
bait opened the access to American markets – not only for trade but also
for investment, since “concentration of assets has brought about a few
groups that now find the Canadian ‘pond’ a bit small for them and,
therefore, tend to go to the United States.” NAFTA is a treaty between
Canada, the United States, and Mexico. According to the US
Constitution, treaties have the force of domestic law, meaning America’s
tax on Canadian softwood is illegal even according to America’s rules.
Vocabulary
to fluctuate – колебаться
fur(s) – мех(а)
potash – поташ (углекислый калий)
tension - напряжение
softwood timber – мягкая древесина (вечнозеленых растений)
to be wary – быть осторожным
encroachment – вторжение, посягательство, поползновение
social ills – социальное зло (несправедливость)
to impose - налагать
lap – промах, просчет
to back – поддерживать
softwood lumber deal – лесопромышленная сделка
to abrogate – отменять, аннулировать
swath – ряд
bait - наживка, приманка. искушение
III
The Harper-Bush agreement on softwood lumber appears to be rapidly
unraveling. Although the Conservative government is trying to salvage it,
the deal is threatened not only by its own shortcomings but also the
changing economic fortunes of forest companies. In part, the pact signed
75
on July, 1, 2006 in Geneva is collapsing under its own weight. Hastily
agreed on and rushed through, it has failed to withstand the scrutiny of
Canadian industry stakeholders, especially the companies that must agree
to give up a portion of the $5.2 billion (U.S.) they paid in duties and tariffs,
and to withdraw outstanding legal challenges.
International Trade Minister David Emerson and industry
representatives tried to tweak the deal enough to make it acceptable to
enough firms that something can be salvaged in time for its legislation
supporting. But the agreement that Prime Minister Stephen Harper and
Mr. Emerson signed is also victim of bad timing. Almost before the ink
was dry, the U.S. Court of International Trade ruled that the American
protectionist measures that sparked the lumber dispute are illegal. The
court ordered the U.S. government to pay back the money it has received
since November of 2004, and promises to rule soon on the fate of the
remainder of Canadian firm’s remissions since May of 2002. Canadian
industry leaders expect the court to rule that it must all be returned.
Prime Minister Stephen Harper’s softwood deal directly abrogates
NAFTA. The US government simply refused to accept the NAFTA rulings
that it is not allowed to tax Canadian lumber. Harper’s “deal” essentially
legitimates America’s refusal to follow the rules it helped draft, under the
excuse that by accepting this, “we’re just being realistic.” The U. S. Court
of International Trade ruling that the U.S. duties are illegal and that money
must be refunded should drive a wooden stake through the heart of Mr.
Emerson’s and Mr. Harper’s bad deal.
Harper’s “deal” is an admission that NAFTA is a failure. The
‘sleeping elephant’ can still twitch whenever it pleases. As Gordon
Ritchie, Canada’s principal negotiator for the original NAFTA, later
wrote, “The American position was simple: if you want to sell in our
markets, you have to play by our rules. If our rules give our own
producers an enormous home advantage, that is just too bad. It would be
unthinkable, politically, for us to propose that we change any of these
laws in any respect just to accommodate Canada.”
Canada gave up very much to get its FTA/NAFTA: control over the
energy and water, control over the form that foreign investment takes in
Canada (since NAFTA, nearly all foreign investment has been either
short-term speculation or wholesale purchase of Canadian firms, not
FDI as promised), control over taxation and spending, control over
whether and how public services are provided (NAFTA includes a
clause stating that if a public service – say, health care – is delivered
76
privately for profit, it reverts automatically to the private sector and
comes under NAFTA rules), and control over investment flows.
Vocabulary
to unravel – прояснять
to salvage - спасать
scrutiny – рассмотрение, изучение
to spark – зажигать
to refund – компенсировать, возмещать
to twitch - двигаться
wholesale purchase – оптовая покупка
After-reading tasks
1. Circle the right word in italics
1. Canada today closely resembles the US in its transitional/market
economic system and low/high living standards.
2. The nation has transformed from a largely urban/rural economy into
agricultural/industrial one.
3. With its poor/rich natural resources, Canada will enjoy better/worse
economic prospects in the future.
4. Canada’s industry is characterized by significant domestic/foreign
ownership.
5. Canadian-owned companies such as CAE Electronics are large/small
in comparison with the US giants.
6. Canada is the world’s largest importer/exporter of fish, furs, and
wheat.
7. Oil and gas are exploited in Alberta, off the Atlantic/Pacific coast.
8. Canada’s most important relationship is with Japan/the USA.
9. Canada supported/backed the US attack on Iraq in 2003.
10. Harper’s “deal” is an admission that NAFTA is a failure/victory.
11. Canadians have problems competing for foreign investment with
Mexico, where environmental standards are lower/higher.
12. Most Canadians oppose/support such ideas as a currency union and
ever closer integration with the USA.
13. According to the US Constitution America’s tax on Canadian
softwood is legal/illegal.
14. The court ordered the US/Canadian government to pay back the
money it has received since 2004.
15. Canada gave up/took up very much to get its NAFTA.
77
2. Match A to B
A
Foreign
Labor
Environmental
Social
Softwood
Protectionist
Investment
Market
Natural
B
measures
lumber
costs
resources
flows
investment
standards
welfare
oriented
3. Match the two halves of the compound word
1. Short
a. wood
2. Stake
b. stand
3. With
c. coming
4. Market
d. sale
5. Hydro
e. place
6. Soft
f. electricity
7. Whole
g. holder
4.Translate the following expressions and use them in the sentences
of your own.
a/ play by our rules
b/ collapsing under its own weight
c/ victim of bad timing
d/spark the dispute
e/ rule on the fate
f/ before the ink is dry
g/ pay back the money
5. Translate into English
Влияние НАФТА на темпы роста международной торговли
Значительные шаги были предприняты странами-членами
НАФТА в сфере либерализации торговли с помощью снижения
тарифов. Кроме того, НАФТА дает возможность ускоренного
снятия тарифов по соглашению заинтересованных стран. Этот
78
процесс зависит от промышленного развития и включает в себя
открытые обсуждения с участием потребителей и других
заинтересованных сторон.
Рассмотрение вопроса о снижении тарифов основывается на
поддержке
заинтересованного
сектора
промышленности.
Предварительно полученные цифры и исследования показывают
размер влияния, оказанного снижением тарифов, согласно НАФТА,
на темпы роста торговли.
Канадский экспорт в США рос быстрее, как в денежном
выражении, так и в объектах, в секторах, либерализованных
согласно НАФТА (машиностроение, текстиль и т.д.), чем в
секторах, где тарифы уже были низкими либо равнялись нулю.
Импорт из США отражает схожие тенденции (производство
одежды, пищевых продуктов и напитков, мебели, транспортного
оборудования и товаров домашнего обихода).
В ценовом отношении канадский экспорт в США товаров,
подвергшихся
либерализации
согласно
НАФТА,
вырос
приблизительно на 140% . импорт товаров такого рода из США
вырос почти на 100%.
Привлекательность Канады для инвесторов обеспечивает
канадцам больше возможностей осуществления вложения в
экономики партнеров по соглашению. Положение соглашения
обеспечивает
инвесторам
значительную
уверенность
и
стабильность в принятии решения, что гарантирует справедливое,
прозрачное и объективное отношение к инвесторам.
Подписание НАФТА привело к более значительным
изменениям движения капитала между Канадой и Мексикой.
Канадские инвестиции в Мексике значительно увеличились,
концентрируясь в таких областях, как горнодобывающая
промышленность, банковское дело и телекоммуникации.
6. Expand on the following
1. Canada’s industry is mostly foreign-owned.
2. A broad and rich resource base of Canada.
3. The Harper-Bush agreement consequences.
79
Glossary of business terms
I
1.international division of labor–международное разделение труда
2. scale of production – объем производства
3. natural commodity exchange – натуральный обмен
4. specialization – специализация
5. labor productivity – производительность труда
6. colonial trade – колониальная торговля
7. household manufactures – домашнее производство
8. human wants – человеческие потребности
9. treaty – договор
10. barter – бартер (обмен)
11.purchase – покупка
12. employee – работник
13. gross domestic product (GDP) – внутренний валовый продукт
(ВВП)
14. profit – прибыль
15. export – экспорт
16. import – импорт
17. relative price – относительная цена
18.financial transaction – финансовая сделка
19. standard of living – уровень благосостояния
20. factors of production – факторы производства
21. industrially developed country – промышленно развитые страны
22. resource-saving technologies – экономичные технологии
23. developing countries – развивающиеся страны
24. intrinsic factors – внутренняя ценность
25. extrinsic factors – внешняя ценность
26. domestic consumption – внутреннее потребление
27. trade market – рынок товаров
28. labor market – рынок труда
29.complementary division of labor – взаимовыгодное разделение
труда
30. integration – интеграция (взаимодействие)
31. added value – добавленная стоимость
32. intra-firm trade – внутрифирменная торговля
33. transnational firms – транснациональная компания
34.countries in transition – страны переходного периода (в
экономике)
80
II
1. supply and demand – спрос и предложение
2. world market – мировой рынок (взаимовыгодная конкурентная
международная торговля на базе международного разделения
труда)
3. balance of payments – платежный баланс(разница между
доходами, например от продажи товаров на экспорт и расходами
от покупки импортных товаров)
4. current account – движение капитала между отдельными
фирмами
5. capital account – движение капитала между отдельными
странами
6. free trade – свободная торговля
7. government interventions – вмешательство правительства
8. property right – право собственности
9. import substitute – товар- заменитель импортной продукции
10. tariff – тариф – налог на импортный товар
11. ban – запрет на ввоз товара
12. quota – квота (разрешение допустимого количества чего-либо)
13. loan – заем, кредит
14. loan guarantee – гарантии по кредиту
15. insurance – страховка
16. infant industry – молодая (новая) отрасль промышленности
17. economies of scale – широкомасштабная экономика
18. dumping – демпинг – экспорт товара ниже его стоимости
19. anti-dumping measures – борьба с демпингом (запрет на ввоз
дешевого товара)
20. revenue – годовой доход
21. safety norm – охранительная норма
22. least developed countries – слаборазвитые страны
23. restriction – ограничение
24. standard – стандарт, норма
25. regulation – правило, норма
26. tariff escalation – неумеренный рост тарифов
27. volatile price – гибкая (подвижная) цена
28. liberalization – либерализация
29. tariff peaks – высокие тарифы
30. tariff reduction – ограничение тарифов
31. stagnant demand – неизменный спрос
81
32. financial integration – финансовая интеграция (взаимодействие)
33. adverse effect (balance) – негативный эффект (отрицательный
баланс, долг)
34. capita income
35. liabilities – пассивы ( долг)
36. budget deficit – дефицит бюджета (государственные расходы
превышают доходы от налогов и т.д.)
37. fiscal and monetary policy – налоговая и денежная политика
38. bankruptcy laws – законы о банкротстве
39. bam-building efforts - лазейки
40. production costs – производственные затраты
41. convertibility of the national currency – конвертируемость (право
обмена)национальной валюты
42. average price – средняя цена
43. cost effectiveness – себестоимость
44. soft budgetary constraints – слабые (мягкие) ограничения
бюджета
45. tough budgetary discipline – строгая (жесткая)бюджетная
политика
46. macroeconomic
stabilization
–
макроэкономическая
стабилизация (в стране, между странами)
47. microeconomy – микроэкономика (на уровне фирмы или
нескольких фирм)
48. political consensus – политический консенсус (соглашение,
договоренность)
49. budget revenues – годовой доход бюджета
50. macrostability – макростабильность(см. пункт 47)
82
Литература
1. Шкваря Л. В. Мировая экономика в схемах и таблицах. М.:
Эксмо. Мирбис, 2005.
2. Hans Peter Lankes. Market Access for Developing Countries.
Finance and Development // A quarterly magazine of the IMF. Sept.,
2002.Vol. 39. № 3.
3. Joseph E. Stiglitz. Globalization and its Discontents. New York:
W.W. Norton and Company, 2003.
4. Melyantsev V. A. East and West in the Second Millennium: Levels,
Rates and Factors of Long-term Comparative Economic
Development. Moscow: Moscow state University Press, 1996.
5. Parshakov Y. A. Economic Development of the Primitivecommuned Societies. Ch. 6: On-line publication: official site
parshakov, com.,.2005.
6. Parshakov Y. A. Economic Laws and Economic Contradictions.
Ch. 14: On-line publication: official site parshakov,com., 2005.
7. Sarah Anderson and John Cavanagh with Thea Lee // Field Guide
to the Global Economy. The New Press. 2005.
8. Sean Masaki Flynn. Ph.D. Economics for Dummies. Wiley
Publishing, Inc. 2005.
9. Shiskov Yu. V. Globalization and Anti-globalization in the Modern
World. On-line publication, 2005–2006.
10. Steve Slavin, Ph.D. Economics. A Self-Teaching Guide. Sec. Ed.,
USA: John Wiley & Sons, Inc. 2005.
11. Robert S. Rycroft. Ph.D. Research & Education Association.
USA, 2005.
12. Walter J. Wessels. Economics. USA: Barron’s, 2000.
13. Longman Business English Dictionary. England: Longman, 2006.
83
Учебное издание
Акимова Ольга Владимировна
ВЗЛЕТЫ И ПАДЕНИЯ
МИРОВОЙ ЭКОНОМИКИ
Часть II
Международное разделение труда.
Переход к рыночной экономике
Учебное пособие
по английскому языку
В авторской редакции
Подготовка к печати А. Н. Колешко
Подписано к печати 19.10.12. Формат 60 × 84 1/16.
Бумага офсетная. Усл. печ. л. 4,88. Тираж 100 экз. Заказ № 549.
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