International organizations that regulate world trade in terms of the scale and profile of the tasks being solved can be divided into two groups: 1) international organizations dealing with global trade issues in general (GATT/WTO, UNCTAD, UNCITRAL, ICC, WTO); 2) international organizations involved in the regulation of trade in one or more related goods (APEF, ECSC, ICCO, MOOC, OPEC).
Shishkin, A. F. World economy: studies. for universities / A. F. Shishkin, N. V. Shishkina, E. B. Falkovich. - M. : Academic Project, 2008. - S. 406, 416.
2. The executive body of the WTO is ...
1. Trade Policy Control Commission
2. Ministerial Conference
3. Secretariat
4. Finance and Administration Committee
The executive body of the organization is the WTO Secretariat in Geneva (Switzerland), in structural divisions which employs 500 people. The secretariat is headed by the director general and four deputies. It is responsible for the operation of WTO bodies in relation to the negotiation, implementation of agreements and the provision of technical assistance to developing countries by providing information, seminars, organizing missions and training courses in the field of trade policy for government officials from the developing countries of Eastern and Central Europe.
Shishkin, A.F. World economy: textbook. for universities / A. F. Shishkin, N. V. Shishkina, E. B. Falkovich. - M. : Academic Project, 2008. - S. 410-411.
3. Does not apply to the functions of the WTO ...
1. monitoring the implementation of trade agreements
2. monitoring the trade policy of WTO members
3. promoting protectionist measures
4. admission of new members
The main functions of the WTO are: 1) monitoring the implementation of trade agreements concluded between WTO members; 2) organization and provision of trade negotiations among WTO members; 3) monitoring the trade policy of WTO members; 4) cooperation with other international organizations; 5) admission of new members; 6) resolution of trade disputes between members. Promoting protectionist measures is not part of the functions of the WTO, since one of the goals of the WTO is to combat protectionism.
Shishkin, A.F. World economy: textbook. for universities / A. F. Shishkin, N. V. Shishkina, E. B. Falkovich. - M. : Academic Project, 2008. - S. 409.
4. The principles of GATT activities do not apply ...
1. fixing tariffs at the level determined by the contracting countries
2. reciprocity in granting trade and political concessions
3. progressive increase in tariffs
4. most favored nation principle
The activities of the GATT were based on following principles 1) tariff measures are recognized as the only acceptable means of foreign trade regulation; 2) fixing tariffs at the level determined by the contracting countries; 3) progressive reduction of tariffs in the course of periodic rounds of multilateral trade negotiations and their "fixing" at an agreed level; 4) reciprocity in granting trade and political concessions; 5) the principle of most favored nation. The progressive increase in tariffs is contrary to the principles of the GATT.
5. The General Agreement on Tariffs and Trade (GATT) at the time of its entry into force was considered a temporary measure, since it was planned to create on the basis of GATT ...
1. World Trade Organization (WTO)
2. United Nations Conference on Trade and Development (UNCTAD)
3. International Trade Organization (ITO)
4. International Monetary Fund (IMF)
The General Agreement on Tariffs and Trade came into force in 1948. It was considered a temporary measure before the creation of an international organization that was supposed to regulate world trade. The charter of the International Trade Organization (ITO) was even developed, but it was not ratified by the parliaments of some countries (primarily the United States). As a result, GATT for a long time remained the only document regulating world trade.
6. The principles underlying the activities of the General Agreement on Tariffs and Trade (GATT) are contradicted by the assertion that ...
1. if a country cancels or reduces import duties, then it is obliged to extend the effect of these conditions to relations with all partner countries (most favored nation principle)
2. tariff and non-tariff measures are recognized as acceptable means of foreign trade regulation
3. provides for reciprocity in the provision of trade and political concessions
4. progressive reduction of tariffs and fixing them at an agreed level is envisaged
The first principle underlying the General Agreement on Tariffs and Trade is that tariff measures are recognized as the only acceptable means of foreign trade regulation.
The GATT was replaced by the World Trade Organization in ______.
The Uruguay Round (1986-1994) was the last in the history of GATT. Consideration at it of problems related to the need to develop a general agreement on trade in services, on the protection of intellectual property, on investments in the field of trade, on improving the mechanism in the activities of the GATT, required the expansion of the competence of this international organization, which resulted in the replacement of the GATT from January 1, 1995 .World Trade Organization (WTO).
Shishkin, A.F. World economy: textbook. for universities / A. F. Shishkin, N. V. Shishkina, E. B. Falkovich. - M. : Academic Project, 2008. - S. 406-407.
8. The wrong statement is that ...
1. The World Trade Organization (WTO) was created during the last round of GATT
2. The World Trade Organization began its activities in 1995
3. after the creation of the WTO, the General Agreement on Tariffs and Trade (GATT) ceased to be valid
4. The creation of the General Agreement on Tariffs and Trade (GATT) was initiated by the USA
The World Trade Organization (WTO), which has been functioning since 1995, bases its work on a number of agreements: the General Agreement on Tariffs and Trade, the General Agreement on Trade in Services (GATS), the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), etc.
9. Overseeing the implementation of multilateral trade agreements, conducting multilateral trade negotiations, monitoring the development of international trade and trade policy are the functions of ...
1. General Agreement on Trade in Services
2. Multilateral Investment Guarantee Agency
3. United Nations Conference on Trade and Development (UNCTAD)
4. World Trade Organization
Overseeing the implementation of multilateral trade agreements, conducting multilateral trade negotiations, monitoring the development of international trade and trade policy are among the main functions of the World Trade Organization (WTO).
10. The highest governing body of the WTO is ...
1. Ministerial Conference (+)
2. General Council
3. CEO
4. Council of Representatives
Topic No. 3 "International movement of capital"
Section 3.1 "Essence, structure, and forms international movement capital. Export of loan and entrepreneurial capital”
1. The purchase by the Russian company Alfa of a 15% stake in the additional issue of the German company Beta refers to ...
1. foreign direct investment
2. providing an inter-farm loan
3. international lending
4. portfolio foreign investment
To distinguish between straight lines and portfolio investment a conditional limit of 10% of the cost of the entire capital of the enterprise was adopted. Additional issues of shares are usually less than half of the total value of the enterprise. Therefore, the acquisition of 15% of the additional issue of shares of the enterprise will be less than 10% of the total cost, therefore, it will be a portfolio investment.
2. The loan form of the international movement of capital includes (-s) ...
1. Purchase of Avtovaz shares by Renault
2. China's purchase of US treasury notes
3. IMF loans to developing countries
4. creation of a joint venture between Russia and Ukraine
Loan capital means lending money to earn interest. Capital from state sources and funds from international organizations are actively involved here. Recently, the role of private capital in the provision of various loans and credits has been increasing.
Entrepreneurial capital is directly or indirectly invested in production and is associated with obtaining one or another amount of rights to profit. Most often this is private capital.
3.To distinguish financial economic assistance from ordinary commercial loans and loans, the concept is used ...
1. "grand discount"
2. preferential percentage
3. "grand element"
4. humanitarian aid
To distinguish financial economic assistance from ordinary commercial loans and loans, the concept of "grand element" is used. This is the name of the indicator of the level of concession of various borrowings. The grand element shows what part of the payments to repay the debt the creditor receives less as a result of the provision of a loan (loan, credit) on terms more favorable than commercial ones.
4.Investments aimed at solving political problems, and not at maximizing profits, are called ...
1. private
2. entrepreneurial
3. state
4. portfolio
Along with private investment, public investment is also developing significantly. They are aimed, as a rule, not at maximizing profits, but at solving political problems. For example, the famous Marshall Plan was intended not only to help the nations Western Europe to avoid poverty, but also to prevent communist penetration, to protect a certain way of social and political thought.
Public investment involves the use of capital abroad, either directly or through the government of the borrowing country in the form of:
– direct investment;
– intergovernmental loans;
- economic assistance.
5. The international movement of capital by the nature of use cannot be in the form of ...
1. entrepreneurial capital
2. loan capital
3. foreign investment
4. State capital
Capital migration is classified into the following main forms:
1) by definition of the donor (source) of capital:
Private;
State;
Capital of international organizations.
2) by the nature of use:
Loan;
Entrepreneurial.
6. An associated company is an enterprise in which a non-resident direct investor owns …
1. less than 50% of the capital
2. more than 50% of the capital
3. 100% equity
4. controlling stake
The limit for enterprises with foreign investment of 10% of capital owned by a foreign investor is conditionally set by international organizations in order to ensure comparability in accounting for the movement of direct investment. This was done on the basis of numerous studies that showed that in modern conditions 10% is a part of the enterprise's capital, control over which is necessary and sufficient to exercise control over the enterprise as a whole.
An enterprise with foreign investment may take the form of:
Subsidiary - in which a non-resident direct investor owns more than 50% of the capital;
Associated company - in which a non-resident direct investor owns less than 50% of the capital;
A branch is an enterprise wholly owned by a direct non-resident investor.
7. The counter movement of capital between countries, bringing their owners the corresponding income, is called ...
1. export of capital
2. international migration of capital
3. capital import
4. loan capital
Initially, the export of capital was characteristic of a small number of industrialized countries that exported capital to the periphery of the world economy. At present, capital is being exported by both medium-developed and developing countries, and NIS, that is, we can talk about the international migration of capital. International migration of capital is a counter movement of capital between countries, bringing their owners the corresponding income. Many countries are both importers and exporters of capital at the same time, making so-called cross-investments.
8. Capital investment in foreign production, providing the right to manage this enterprise, is called (-s) ...
1. portfolio foreign investments
2. trade credits
3. foreign direct investment
4. international commercial loan
Direct foreign (foreign) investments are investments in production, which entitle the investor to control the management of enterprises in the host country.
Uncontrollable payments, loans and purchases valuable papers defined as portfolio or other investments.
Section 3.2 "International Credit"
1. Claims and liabilities arising from the direct provision of credit by suppliers and buyers in transactions with goods and services are called ...
1. loans
2. deposits
3. trade credits
The main instruments of international borrowing and lending reflected in the balance of payments include:
Trade credits are claims and liabilities arising from the direct provision of credit by suppliers and buyers for transactions in goods and services, and advance payments for the work that is carried out in connection with such transactions. Trade credits can be provided by both governments and private enterprises and other non-governmental organizations. Most of them are short term;
deposits;
Other assets and liabilities.
2. The part of the loan capital market where medium and long-term foreign loans are provided is called ...
1. international credit market
2. national credit market
3. credit segment
4. the market of interconnected loans
Part of the loan capital market, where medium and long-term foreign loans are provided, is called the international credit market.
The international credit market is a sphere and form of organization of the movement of credit resources between countries.
3. Short-term lending to its member countries in case of difficulties associated with the deficit of balances of payments is carried out by ...
1. IBRD (International Bank for Reconstruction and Development)
2. EIB (European investment bank)
3. IMF (International Monetary Fund)
4. IDA (International Development Association)
The IMF provides short-term lending to its member countries in case of difficulties associated with a balance of payments deficit. It provides loans to treasuries, central banks in the form of selling foreign currency for the national currency of the borrowing countries. Loans are repaid by redeeming the national currency for a foreign one.
4. As a result of the provision of an international loan in the recipient country, ...
1. domestic debt
2. reduction of current consumption
3. international debt
4. rising interest rates
As a result of the provision of an international loan in the recipient country, an international debt arises - money that the country owes to the world community. Most of the debtors are developing countries that borrow from the World Bank and private banks to finance their long-term economic development programs.
5. The movement of capital in the sphere of international economic relations, associated with the provision of foreign exchange and commodity resources to foreign borrowers on terms of repayment, urgency and payment of interest, is called ...
1. international investment
2. world market of capital assets
3. international credit
4. global financial market
One of the main forms of international capital movement is international credit. An international loan is a movement of capital in the sphere of international economic relations associated with the provision of foreign exchange and commodity resources to foreign borrowers on the terms of repayment, urgency and payment of interest.
International credit funds are formed on the international loan capital market, national loan capital markets, as well as through the use of resources of state, regional and international organizations.
6. The theory of world trade considers international borrowing and lending to be a special type of international trade on the basis that most of the international loans are intended for ...
1. stabilization of the balance of payments of countries
2. implementation investment projects
3. trade turnover service
7. In general, long-term lending means the provision of loans by banks to __________ and buyers of machinery and equipment.
1. to purchase shares
2. for building enterprises
3. state
4. for reconstruction of enterprises
In general, long-term lending means the provision of loans by banks to the state and buyers of machinery and equipment.
Medium-term loans are used for capital replenishment, lending and financing operations for the acquisition of shares, the establishment of branches, construction and reconstruction.
8. The provision of monetary and material resources to foreign borrowers in the form of foreign exchange and commodity resources on the terms of repayment, urgency and payment is called ...
1. foreign exchange intervention
2. investment position
3. international credit
4. currency hedging
An international loan means the provision of monetary and material resources to foreign borrowers for temporary use in the form of foreign exchange and commodity resources on the terms of repayment and payment (mainly in the form of loans).
The necessary funds are mobilized in the international and national loan capital markets, as well as through the use of resources of state, regional and international organizations. The amount of the loan and the terms of its provision are fixed in loan agreement between lender and borrower.
9. The movement of loan capital occurs in the form of cash and ...
1. deposits
2. securities
3. direct investment
4. portfolio investment
In modern conditions, international lending (loan capital) is carried out mainly in the form of loans. Loans are taken at a certain percentage for a strictly specified period. Governments, international organizations, private firms can act as persons involved in such transactions.
The movement of loan capital occurs in the form of deposits and cash. In the first case, we are talking about the transfer of accounts to foreign banks, in the second - about the currency used by banks and the Ministry of Finance for settlements.
Loan capital in the form of a deposit moves, focusing on one magnet - a country with a higher interest rate paid on deposits.
10. The theory of world trade considers international borrowing and lending to be a special type of international trade on the basis that most of the international loans are intended for ...
1. trade turnover service
2. stabilization of the balance of payments of countries
3. implementation of investment projects
4. deficit coverage state budget
The theory of world trade considers international borrowing and lending to be a special type of international trade on the grounds that most of the international loans are intended to serve the trade turnover.
Section 3.3 "Transnational Corporations (TNCs)"
1. Attractive for TNCs currently remain those countries from among the economically backward countries that do not have ...
1. cheap labor
2. low taxation
3. strong government regulation
4. Proximity to sources of raw materials
Among the economically backward countries, TNCs are currently attracted to those that have:
Cheap labor force;
Low taxation;
Proximity to sources of raw materials;
Weak state regulation, the possibility of importing environmentally harmful industries into them;
Stable political situation, etc.
2. The main purpose of the activities of TNCs is ...
1. reducing unemployment
2. expansion of the production base
3. making a profit
4. Expansion of sales activities
The main purpose of TNCs, like any other business structure, is to make a profit. The preference for obtaining it abroad is determined by the differences in economic, political, legal, natural, social conditions in different countries, as well as general trends in the development of the world economy.
3.Companies created on the basis of integration economic activity carried out in different countries are called _____________ TNCs.
1. multinational
2. international
3. global
4. mononational
Global TNCs are companies created on the basis of the integration of economic activities carried out in different countries. Established in the 1980s, they determine the future development of the world economy.
These TNCs are an association of decentralized affiliates, for which the whole world is the scope of activity. One of the main characteristics of such TNCs is the implementation of a global strategy.
If a TNC wants to minimize taxes in its own country and import duties when importing goods into another country, then transfer prices are determined at the level of _________ prices.
1. above market
2. market
3. below market
4. world
Transfer prices are prices that differ from the market prices of intra-corporate trade between subsidiaries of the same corporation located in different countries and are used to transfer profits and reduce taxes.
When a TNC aims to minimize taxes in its own country and import duties when importing goods into another country, transfer prices are set at a level significantly below market prices.
5. The negative consequences of the activities of TNCs include ...
1. promotion economic development
2. increased competition
3. non-payments to the budgets of recipient countries
4. expanding international cooperation
The consequences of the globalization of the activities of TNCs are ambiguous. The negative consequences of the activities of TNCs include: intrusion into the spheres of state interests of the host country; non-payments to the budgets of recipient countries due to the presence of wide opportunities for tax evasion; monopolization of the national market, concentration of R&D in the home country while transferring backward technologies to the host country; destabilization of the national currency; possible predatory attitude towards exploitation natural resources etc.
6. The positive consequences of the activities of TNCs for host countries include the fact that TNCs contribute to ...
1. reduce inflation
2. increase in budget revenues
3. economic development
4. monopolization of the national market
The positive impact of TNCs can be considered that their activities contribute to economic development or, at least, economic education of the host countries. This happens due to the spread of new products, technologies and knowledge, increased competition, increased international cooperation, etc.
7 The positive impact of TNCs on host countries can be attributed to …
1. monopolization of national markets
2. transfer of backward technologies
3. promote economic development
4. destabilization of the national currency
The consequences of the globalization of the activities of TNCs are ambiguous. It can be considered positive that the activities of TNCs contribute to economic development, or at least economic education of the host countries. This happens due to the spread of new products, technologies and knowledge, increased competition, increased international cooperation, etc. However, the impact can be direct if TNC subsidiaries are more productive than local firms and transfer technology and other assets. It may be indirect, since due to the development of competition, the efficiency of local companies may increase.
8. The negative consequences of TNCs include the fact that in the home country ...
1. unemployment increases
2. inflation is rising
3. production is monopolized
4. rising interest rates
The main reason for the opposition of TNCs in home countries is that, by creating production abroad, TNCs transfer there part of the jobs that are lost for workers in the home country.
Section 3.4 External Debt Crisis
1. If the recipients of the loan are governments, then they may refuse to pay their debts on time, since ...
1. they don't have enough money
2. the country has high inflation
3. they have sovereignty
4. the country has high unemployment
Debtors often have sovereignty and cannot be forced to pay their debts if they do not want to, especially if the recipients of the loan are governments: they may refuse to pay their debts on time, and creditors have no way to sue or seize the debtors' assets .
2. One of the factors of the world debt crisis that occurred in 1982 can be considered that loans to developing countries were issued ...
Similar information.
Liechtenstein
Solution: An example of a free trade area is the European Free Trade Association (EFTA), which includes 6 countries: Austria, Finland, Iceland, Liechtenstein, Norway, Sweden. Switzerland not a member of EFTA
3. If the member countries of an integration grouping ensure the free movement of capital and labor within this grouping, then this form of economic integration is called ...
Solution: The common market is a stage of economic integration that provides the participating countries, along with free mutual trade and a common foreign trade tariff, free movement of capital and labor, as well as harmonization economic policy
4. The creation of special supranational institutions with the transfer of part of the national sovereignty of the state is typical for ...
5. The introduction of a common customs tariff in relation to third countries is typical for such a stage of integration as ...
6. The simplest pre-integration form of regional cooperation is…
7. A mutual moratorium on changing customs duties is a condition for creating …
8. Preferential trade agreement not characterized…
9. The creation of an interstate body with the function of supranational regulation is necessary for such an integration stage as ...
10. The approval of a common external tariff for third countries is typical for such a form of international economic integration as ...
| Customs Union |
11. International economic integration can pass ___5__ levels of development.
Solution:
Historically, integration has evolved through several major steps ( 5 steps), each of which indicates the degree of its maturity. At the first level, when countries take the first steps towards mutual rapprochement, preferential trade agreements are concluded between them. In accordance with them, countries provide more favorable treatment to each other than the treatment they provide to third countries. At the second level of integration, countries move on to the creation of a free trade zone. The third level of integration is associated with the formation of a customs union. The fourth level is characterized by the creation of a common market. At the fifth, highest level, integration turns into an economic union. In principle, the existence of the sixth level of integration is also possible - a political union, which would provide for the transfer by national governments of most of their functions in relations with third countries to supranational bodies. This would actually mean the creation of an international confederation and the loss of sovereignty by individual states. However, not a single integration grouping has not only reached such a level of development, but does not even set such tasks for itself.
12. If the member countries of an integration grouping establish a single foreign trade tariff in relation to countries that are not members of this grouping, then this form of economic integration is called ...
13. A mutual moratorium on changing customs duties is a condition for creating ...
14. The form of international integration, in which countries abolish all trade barriers among themselves, is called ...
15. Integration groupings of countries that have concluded agreements on the removal of trade barriers to trade are formed on the basis of ...
Topic: Monetary system of Russia
1. In the making monetary system in Russia, the creation of ...
2. Pursuing a weak ruble policy will contribute to …
3. In Russia, the currency monopoly on the part of the state was abolished in _ 1986___ year.
4. A characteristic feature of the formation foreign exchange market in Russia at the initial stage is the development ...
5. Strengthening Russian ruble may cause …
7. To the principles of currency regulation in accordance with federal law dated December 10, 2003 No. 173-FZ “On currency regulation And currency control» not applicable…
8. Currently, Russia uses a floating exchange rate, which Russia switched to in _________.
Topic: Foreign exchange market
1. Official centers where transactions for the purchase and sale of foreign currency are made are called ...
2. The term (forward) foreign exchange market assumes that foreign currency will be purchased ...
3. Eurocurrency market not characterized…
4. The action of a participant in the foreign exchange market, aimed at preventing the loss of future income when changing exchange rate, is called ...
5. Buying a currency or other asset in one national market and selling it in another is called...
Solution: Speculative transactions are realized through currency schemes, which are called arbitrage. Distinguish between spatial and temporal arbitration. Spatial arbitrage involves buying a currency or other asset (security, commodity) in one national market and selling it in another. Such arbitrage unites individual markets into a single world currency market. The main income from such operations is achieved through economies of scale.
6. Operations that allow you to receive income from the exchange rate difference when converting one currency to another are called ...
7. To the main functions of the foreign exchange market not applicable…
8. Fundamental requirement (feature) of an international financial center is not…
Solution:
Consequence of globalization financial markets is the formation of international financial centers (New York, London, Tokyo). The fundamental requirements and features of an international financial center are:
1. High level economic freedom in the field of activity of market agents, consumption, accumulation and investment.
2. The stability of the currency and the stability of the national financial system country where the financial center is based.
3. Efficiency of financial institutions and instruments.
4. Active and mobile markets (long-term and short-term markets, markets for transactions, markets for futures transactions, commodity markets, securities markets).
5. Universal means of communication providing any types of transactions and financial and economic information.
6. Availability of an appropriate legal framework and social climate. The need for economic integration of the country where the financial center is based, is not a defining feature of an international financial center.
9. Modern foreign exchange market does not fulfill a feature like...
10. Depending on the volume of currency trading, the number of currencies traded among the foreign exchange markets it is forbidden highlight the _________ market.
11. The main subjects of the foreign exchange market are ...
Subject: International credit
1. The movement of capital in the sphere of international economic relations, associated with the provision of foreign exchange and commodity resources to foreign borrowers on the terms of repayment, urgency and payment of interest, is called ...
2. Claims and liabilities arising from the direct provision of credit by suppliers and buyers in transactions with goods and services are called ...
Solution:
Countries' contributions to international organizations do not belong to any of the main groups of international borrowing and lending instruments (trade credits, loans, currency, deposits), therefore they are included in the "Other assets and liabilities" group.
4. In general, long-term lending means the provision of loans by banks to __________ and buyers of machinery and equipment.
5. To the main instruments of international borrowing and lending, which are reflected in the country's balance of payments, does not apply…
6. The part of the loan capital market where medium and long-term foreign loans are provided is called ...
7. Increased current consumption by reducing consumption in the future (borrowing) or understating current consumption in favor of more consumption in the future (crediting) in the theory of international economics is called ...
8. Short-term lending to its member countries in case of difficulties associated with the deficit of balance of payments is carried out by ...
9. The provision of monetary and material resources to foreign borrowers in the form of foreign exchange and commodity resources on the terms of repayment, urgency and payment is called ...
Topic: External Debt Crisis
1. If the recipients of the loan are governments, then they may refuse to pay their debts on time, since ...
1.1. Debtors in the international credit market cannot be forced to pay their debts if they do not have such a desire, since ...
Solution:
Debtors often have sovereignty and cannot be forced to pay their debts if they do not want to, especially if the recipients of the loan are governments: they may refuse to pay their debts on time, and creditors have no way to sue or seize the debtors' assets .
2. One of the factors behind the global debt crisis that occurred in 1982 can be considered that loans to developing countries were issued ...
3. Restructuring public debt countries are usually engaged in ...
4. Most off debt crisis Countries suffered in the 1980s...
6. External debt restructuring can be carried out in the form of …
7. To the causes of the external debt crisis not applicable …
8. The process of settling external debt is called ____________ debt.
10. One explanation for the 1982 external debt crisis is that high nominal interest rates …
Those countries that give preference to current consumption, that is, consume more than they produce, are forced to borrow money from abroad. Conversely, countries that limit current consumption in order to expand it in the future are able to provide loans. As a result, it is possible for development of the system of international borrowing and lending, but at the same time external debt is formed. sign offensive external debt crisis usually serves violation of the loan repayment schedule borrowed by the country through public channels.
Crises begin with the fact that some country (or group of countries) announces the impossibility of paying its external debt or the cancellation of the debt. It is impossible to get the debtor to pay off his debt, since the borrower is a sovereign economic agent, often the government of a foreign state. It is impossible to apply to him the sanctions that apply to an ordinary non-payer of a particular country. The facts of state bankruptcy upset the balance of the international credit market, complicate the processes of lending and borrowing. When individual violations become massive, another global debt crisis begins.
Factors of the external debt crisis
The appearance of an external debt crisis is usually facilitated by a number of factors, divided into fundamental (or structural) and specific. Structural— are related to the underlying trends in the development of the economy of the borrowing country. This general decline in production or negative external shock; difficulties in resolving due to worsening terms of trade; a decrease in the inflow of long-term capital attracted on favorable terms, an increase in the volume of short-term loans by market conditions; capital flight due to the current economic and political situation; loss of confidence in the country from foreign creditors due to the growth of its accumulated debt and a corresponding decrease in external lending.
Specific Factors most often associated with depressed state of the economy many countries of the world caused by structural, financial and (or) cyclical crises. For example, the debt crisis of the 1980s. was caused by a relative excess banking capital, a multiple increase in oil prices in 1974, 1979-1980s. and an increase in the deficit in the balance of payments of oil-importing countries, especially developing ones; the transfer to developing countries of a number of industries that caused an increase in investment demand; stimulating an increase in demand, due to low discount rates for loans; lack of attention in lending to how loans were used by oil-importing countries; 80% of developing country borrowing from 1973 to 1982 went to offset the rise in oil prices and to finance the running costs of governments, as well as to service the growing debt; repayment of debt through short-term loans, etc. By the beginning of the debt crisis, the structure of the external debt of developing countries deteriorated significantly due to a significant excess of private debt over official creditors, which worsened debt service conditions.
Under normal conditions, external debt is serviced by foreign exchange earnings from the export of goods and services.. Sometimes, in order to pay off debts in a timely manner, a country increases exports and reduces import costs. If this cannot be done, then the external debt is repaid by new borrowings abroad, and the increase external borrowings leads to an increase in , an increase in debt service costs. A vicious circle emerges. To break it to countries with a high level of debt is possible only by referring to the stabilization program, which involves:
- the abolition or liberalization of foreign exchange and import controls;
- depreciation of the local currency exchange rate;
- pursuing a strict internal anti-inflationary program, including control of bank loans, government control by reducing spending and increasing and refusing to index rates, encouraging free markets;
- opening the economy to the world economy and encouraging foreign investment.
Analysis of external debt
An analysis of the situation with the dynamics of international debt and debt severity data shows that the debt burden on the economy developing world not only does not weaken, but also worsens.
The most difficult situation with respect to external debt at the beginning of the XXI century. continues to remain in Africa, especially in the countries of Tropical Africa. They have the highest proportion of debt owned by official institutions. Debt is repaid through new borrowings. In general, external factors played a large role in the development of the debt crisis in Africa: this is a crisis in industrial developed countries in the 80s, as well as the miscalculations of the IMF and IBRD, etc.
The Arab countries that import oil have a high external debt.
In the early 90s. a new group of debtors has appeared - these are countries. Some of them failed to fully pay off their debts. The total amount of external debt by 2007, together with interest, exceeded 3.0 trillion. Doll.
In general, the growing volume of international debt of developing countries creates the possibility of pressure on their foreign and domestic policies. External debt has become one of the main factors of stagnation in the economy. The burden of debt service payments seriously limited the ability of these countries to increase growth rates and fight underdevelopment, and led to a reduction in imports.
central role in addressing the problem of external debt performed by international monetary organizations. The IMF develops a stabilization program for each debtor. With the adoption of these programs, the provision of new bank loans is linked. Issues related to debts to foreign states are resolved by the Paris Club. Negotiations on debts to private creditors are resolved within the framework of the London Club.
Creditor countries, the IMF and The World Bank carry out differentiated policy towards recipient countries. In accordance with the methodology of the World Bank, all member countries are divided into two groups: over-indebted and moderately indebted. Assignment to a specific group depends on the level and degree of external debt burden.
Such differentiation allows the development of measures to link the amount of payments on debts with the actual possibilities of borrowers.
Widely used in debt settlement restructuring, i.e. transferring or deferring payments. Debt restructuring relieves debtors and creditors of the need to negotiate annually. It gives temporary relief to debtors, the annual payments are reduced, but the size of the debt is not reduced, but increases due to interest in the new period of its repayment. Restructuring is accompanied, as a rule, by the provision of new loans.
In recent years, the practice of capitalizing interest payments, that is, turning them into principal debt, has expanded significantly; different kinds conversion of debt obligations, including the exchange of debts at a market rate for shares of national enterprises being privatized, their sale, repeated restructuring of prolonged amounts.
The global community has recognized that finding a solution to the debt problem is common responsibility debtor and creditor countries, commercial banks and multilateral financial institutions.
1. If the recipients of the loan are governments, then they may refuse to pay their debts on time, since ...
1. they don't have enough money
2. the country has high inflation
3. the country has high unemployment
4. they have sovereignty
Debtors often have sovereignty and cannot be forced to pay their debts if they do not want to, especially if the recipients of the loan are governments: they may refuse to pay their debts on time, and creditors have no way to sue or seize the debtors' assets .
2. One of the factors of the world debt crisis that occurred in 1982 can be considered that loans to developing countries were issued ...
1. low nominal interest
2. under high real interest
3. under high nominal interest
4. in small quantities
In 1982, dozens of debtor countries declared that they could not pay their debts and forced their foreign creditors to delay the payment of interest and repayment of the principal amount of the debt. There are two main factors that explain why this “breakdown” occurred precisely in 1982. First, the growth of lending in the mid-1970s. was associated with a sharp increase in private bank reserves. Bank reserves, in turn, increased due to increased savings in oil-exporting countries and due to inflationary monetary policy held in many countries around the world. Additional reserves were channeled to third world countries in the form of loans at high nominal interest rates, as the prospects for investment in developed countries were uncertain, and third world countries in those years strongly opposed the inflow of foreign direct investment.
3. The traditional mechanism of external debt restructuring begins with the country's adoption of a stabilization and economic reform program supported by …
1. central bank country
3. IMF and World Bank
4. London club of creditors
The traditional mechanism of external debt restructuring begins with the adoption by the country of a stabilization and economic reform program supported by the IMF and the World Bank through their concession loans. Further, the consent of the Paris Club of official creditors for restructuring is required clean streams debt service funds, etc.
4. Since the late 1980s. a serious role in solving debt problems began to play the Paris club of creditors, which is an informal organization ...
1. commercial banks
2. creditor countries
3. finance ministers
4. central bankers
Since the late 1980s The Paris Club of creditors, which is an informal organization of the governments of creditor countries, began to play a serious role in solving debt problems. The club deals with the issues of settling the state debt of countries and conducts multilateral negotiations with them on the problems of restructuring their state debts. The club does not have a rigid organizational structure; traditionally, a high-ranking official of the French Ministry of Finance is elected as the chairman of the club.
5. The process of settling external debt is called ____________ debt.
1. restructuring
2. write-off
3. hedging
4. investing
The process of settling external debt is called debt restructuring.
Debt restructuring - measures taken by agreement between debtors and creditors aimed at maintaining the solvency of debtors in the medium and long term.
6. One explanation for the 1982 external debt crisis is that high nominal interest rates …
1. turned into low real interest rates
2. have been canceled
3. turned into high real interest rates
4. have been re-enlarged
In 1982, dozens of debtor countries declared that they could not pay their debts and forced their foreign creditors to delay the payment of interest and repayment of the principal amount of the debt.
In 1982, the worldwide recession in the economy continued: production and employment stagnated, and the decline in inflation (disinflation) exceeded all expectations. In the 1970s debtors borrowed at high nominal interest rates, which reflected widespread fears of rising dollar prices. But the tight monetary policy of the US Federal Reserve for several years had the effect of turning high nominal interest rates into high real interest rates, hitting borrowers hard.
7. External debt restructuring can be carried out in the form of ...
1. recapitalization
2. Structuring
3. hedging
4. currency speculation
External debt restructuring can be carried out on the basis of one or more combinations of the following measures:
1. transfer of payments;
2. reducing the amount of debt;
3. recapitalization - the exchange of debts for bonds of debtors or the provision of new loans with the purpose of paying off past debts.
The best-known in this group of debt reduction measures is the plan published in 1989 by then US Treasury Secretary Nicholas Brady. Under this plan, some developing countries that had agreed economic reform programs with the IMF could swap their debts foreign banks on bonds that could be sold at a market price on the world financial market.
8. Debtors in the international credit market cannot be forced to pay their debts if they do not have such a desire, since ...
1. they have no money
2. the loan was taken by another government
3. they have sovereignty
4. the country has high inflation
Debtors in the international credit market often have sovereignty and cannot be forced to pay their debts if they do not want to, especially if the borrowers are governments themselves, they may refuse to pay their debts on time, and creditors do not have the opportunity to go to court or seize the assets of such debtors.
Many countries often find themselves in a situation associated with the inability not only to repay the loans, credits, loans received, but also to service them normally. Thus, the problem of external debt (external debt) arises in the world economy, which is one of the most acute and complex problems of the world economy at the beginning of the 21st century. Many researchers attribute it to the global modern world economy. At the same time, the concept of the so-called "debt economy" is considered, the main feature of which is the gradual approximation of the volume of funds for debt servicing to the volume of new borrowings in the domestic and foreign markets.
The facts of bankruptcy upset the balance of international credit, complicate the processes of lending and borrowing. When individual violations become massive, another global debt crisis begins.
The debt crisis (default) is a consequence of growing external debt. The reasons for the growth can be: budget deficit(excess of budget expenditures and net lending over the amount of income), lack of own funds, capital flight (capitals transferred by their owner from one country to another in violation of existing legislation), wrong domestic and foreign policies.
Beginning in the mid-1970s, principal and interest payments began to outpace the increase in borrowed capital. The flourishing of international financial markets, their significant expansion, increasing accessibility financial resources gave rise to serious difficulties and contradictions. International monetary and credit relations became the source of serious crises, which more and more turned into crises of the world economy.
This is what happened with the external debt crisis. Its beginning is usually dated to August 1982 by I.A. Strelkov. World economy: UP, 2011. - 114 p., when the Mexican government shocked the entire financial world by announcing that it was unable to meet its debt obligations in accordance with the payment schedule. In some countries (Jamaica, Peru, Poland, Turkey, etc.) the debt crisis began even earlier, but now a dozen countries have immediately followed the example of Mexico, recognizing the existence of significant debt service difficulties.
It is noteworthy that the debt crisis is a chronic phenomenon of international credit, especially when governments act as debtors. So since gaining independence in the early 19th century, Argentina has declared its inability to pay its debts at least 6 times; Guatemala refused to make payments on foreign obligations 12 times. Let's try to figure out why international credit is less stable than domestic credit.
From point of view American economist P. Lindert, international credit often goes out of balance due to the imperfection of property rights. Debtors in the international credit market often have sovereignty and cannot be forced to pay their debts if they do not want to, especially if the borrowers are governments themselves (they can refuse to pay their debts on time, and creditors do not have the opportunity to sue or impose seizure of the assets of such debtors). This is the specificity of international economic relations.
The debtor nation can attract foreign loans until the amount of loans exceeds the amount of the outflow of funds to service the accumulated amount of debt (interest and principal payments), and then announce the termination of payments, referring to some circumstance.
Moreover, as a rule, governments intending to delay or refuse payments are not the same governments that negotiated loans, which means that there is always another “justification”: their prodigal predecessors took the debts, so let them and answer. Danilenko L.N. World economy: UP, 2010. - 164 p.
Thus, the fundamental problem is that the desire of the debtor to refuse to pay the debt is very strong if his assets cannot be "frozen" by creditors.
The aggravation of the problem of external debt servicing can occur under the influence of many circumstances. Among them, the most important are: the accumulated (accumulated) debt of the country becomes excessively large; the inflow of long-term capital attracted on favorable terms is decreasing, and the attraction of short-term loans on market terms is growing, resulting in an increase in interest rate; difficulties in regulating the balance of payments due to worsening terms of trade; a general decline in output or a negative external shock (a sharp change in prices, interest rates or the exchange rate); the country loses the confidence of foreign creditors, the volume of loans decreases; capital flight from the country due to the current economic and political situation.
The reason sovereign debtors stopped making payments also helps to explain some of the behavior of international lenders—an insistence on charging higher interest rates on loans to foreign governments compared to loans to private and public borrowers in their own country. Asking for a higher interest rate is a way to get a kind of insurance premium in case of non-payment of debts. Another feature of lending to sovereign borrowers is the wide fluctuation in loan volumes.
Practice international settlements shows that defaults occur when it is economically beneficial for the debtor country, and not only when the country does not have the resources to service the debt.
The magnitude of the problem of external debt in the modern world economy is evidenced by the fact that in 1993 the total volume of outstanding international debt obligations amounted to 2024 billion dollars, and in 2005 it already exceeded 13 trillion. Doll. (13 392 billion dollars), and now even more.
The severity of this problem is evidenced by the increase in the number of defaults (debt crises) of countries - debtors on official debt obligations: if in the decade of 1956-1965, 18 defaults were noted, then in the decade of 1986-1995, (thirty years later) - already 203 defaults. In recent years, as examples of this kind, one can name the default of 1998 in Russia, 2001 - in Argentina, 2002 - in Nigeria, etc. Smitenko R. International economic relations: textbook, 2009. - 279 p.
In 2009, Latvia, Hungary, Ukraine, Bulgaria and Romania faced the threat of default. Stranded after the world financial crisis 2008 also included Portugal, Ireland and Greece.
The more burdensome the accumulated foreign debt is for the country, the more its service is involved in interaction with the functioning of the entire national economy and its financial sector.
Organizations such as the International Monetary Fund and the World Bank provide advisory assistance and part-finance operations to reduce debt and create new incentives to increase domestic investment and increase foreign investment in debtor countries.