International Monetary Fund (IMF)

International Monetary Fund (IMF)

The core mission of the International Monetary Fund (IMF) is to help stabilize an increasingly global economy. The IMF’s original goals were to promote orderly and stable foreign exchange markets, restore free convertibility among the currencies of member nations, reduce international impediments to trade, and provide assistance to countries that experienced temporary balance-of-payments deficits.

Over the years, the IMF has shifted its focus from exchange rate relations among industrialized countries to the prevention of economic instability in developing countries and countries from the former Eastern European bloc. The Mexican economic crisis in 1994 prompted an unprecedented bailout of $47 billion and launched the recent trend of providing rescue packages to major economies in the developing world. In the past several years, the IMF approved a $19 billion rescue package for Turkey and led a $17.2 billion rescue for Thailand, a $42 billion package for Indonesia, and a $41.5 billion deal for Brazil. South Korea got a whopping $58.4 billion when it was on the verge of bankruptcy. These rescue packages helped stabilize the respective economies and avoid total economic collapse of the countries involved.

For more information about the IMF, check out the link on the student companion website at http://www. cengage.com/ marketing/gillespie.

To qualify for assistance, the IMF may require that countries take drastic economic steps, such as reducing tariff barriers, privatizing state-owned enterprises, curbing domestic inflation, and cutting government expenditures. Although many nations have resented such intervention, banks worldwide have used the IMF as a screening device for their private loans to many developing countries. If countries qualify for IMF loans, they are considered for private credit. A growing world economy in the early 21st century resulted in fewer crises for the IMF to manage. Its loan portfolio fell to the lowest level since the 1980s, and its influence over countries and their economies diminished.

Global Markets for Smaller Firms

With the world’s population now exceeding 7 billion people and more of those people entering middle class status, new and innovative solutions will be needed to provide them food and nourishment.  There is increasing demand for dietary protein sources that include livestock and seafood. As a result of this and the increasing strains on natural fisheries, the aquaculture industry has been the fastest growing food sector globally.  Aquaculture is growing across Southeast Asia, in Vietnam, Thailand, Philippines, India, and Cambodia, and now in Western Africa in Ghana and Nigeria.

Several hundred miles away from the Atlantic Ocean, Gettysburg, Pennsylvania seems an unlikely place for the cutting edge of aquaculture research and development.  Yet, that is where Zeigler Bros, Inc. is researching and producing innovative new products for specialty animal and aquatic diets, particularly in fish shrimp farms.  The company also operates a franchise program that transfers technology to international partner feed mills.

Zeigler Bros. grew from its origins in 1935 as  a local producer of poultry and livestock feed for Pennsylvania farmers. The company began exporting in the 1980’s and now sells its products in over 40 countries.  Since aquaculture has grown in overseas markets so rapidly, international sales now account for more than half of Zeigler’s business.  Zeigler received the Presidential E-Award for Export Excellence from the U.S. International Trade Administration in 2013 for its emphasis on exports.  Chris Stock, the International Sales Manager for Zeigler, described the importance of exports for business:  “It’s a no-brainer.  You should be exporting.  If you’re not, start learning about it, talk to other exporters and just go for it.  I think the key things to exporting are persistence and patience…If you don’t enter the export market, you’re limiting your sales in a big way, no doubt about it.

When asked about new markets for Zeigler Bros., Stock said:  “Africa is on the cusp, I think.  A lot of people see the opportunity, so it’s a great time to get in early, because it’s a huge emerging middle class that’s developing there with spending power.  They need things more than any other part of the world… And, there’s reason to take it slow when entering Africa and be cautious, but the opportunity outweighs the risk.”

Sources:  “Helping Feed the World Through Exports”, Doug Barry, U.S. International Trade Administration, September 13, 2013; http://www.zeiglerfeed.com, accessed November 11, 2013