Spring Break 2016 is around the corner. While you are packing up swimsuits and heading for somewhere warm, we are here to offer you some thoughts of islands and beauty. If you are planning to get some readings done by the beach, this review of trade policy in Fiji 2016 is waiting for you to pick up and read.
To paraphrase the Philosopher Ludwig von Wittgenstein: “If you are not part of the discussion you are like a boxer who never goes into the ring.” It is important to be in the ring, and this course will permit students to be situated in the crucial nexus of international marketing and government activities, and allow them an opportunity to become part of the discussion.
We hear a lot about the growth of world trade, globalization, and imbalanced distribution of incomes. Yet, how does one understand all the issues, thoughts and arguments involved? Who decides what information and approaches to use and how to use them? How does one develop a time frame and context for addressing entrenched and novel issues? Misunderstandings can be rife. Only a few decades ago, Bill Gates of Microsoft, on a visit to Georgetown University, pronounced that there was no need for his company to have a Washington office. Oh ye of little faith – today the firm has ‘seen the light’ and supports a major operation in Washington D.C.
In order to learn from the past, we must understand what was done before us, and appreciating the context in which changes occur. Over the past half century, international business and trade have mushroomed in importance, and, in the last two decades, have reached and passed a tipping point. Social and economic shifts have taken us from the backroom discussions of experts to public disputes around the world. From ignorance, we have entered into the stage of too much information. A new sense of transparency and accountability offers new directions to businesses and their executives. The emergence of a public moral sense and scrutiny about international injustices encourages companies and governments to reduce corruption and abandon unsavory practices.
The role of governments has changed drastically, first shrinking in the 1980s and 1990s, but now coming back with a vengeance, dictating the direction and strength of international business activities. After decades of aiming for more open markets, even the liberal trading nations and the trade-supporting politicians within them are developing a tendency to restrict imports and encourage exports. In blatant disregard that someone’s export has to be someone else’s import, governments try to protect home industries and keep their own economies stable and revitalized. Yet, in spite of many efforts to that effect, global imbalances are persistent and distortive.
Over the long haul, we can distinguish patterns of ebb and flow in the international business and trade arena. Publicly, we are often told one thing – such as the need for the free flow of international trade – but when looking at actual decision patterns, actions might differ from pronouncement. Just like Saint Augustin who prayed in about 400 A.D., “Lord, make me chaste, but not yet,” policymakers and government executives often develop strong, if not nontransparent measures to delay or even defeat the easing of international trade flows. There are also times when change cannot happen quickly enough, when everyone aims to streamline and fast-track legislation and international accords by limiting the influence of deliberate legislative votes.
There are the subtle and not so subtle efforts at sanctions and disruptions of trade flows, yet they are often met by opposing interest levels, which sometimes negate such restrictions. Repeatedly we see one side, which is losing contracts, blaming it all on the corruption and nepotism on part of the winners. Particularly in the international arena, cultural differences can lead to very different ways of doing business. Just think of countries where competitiveness plays a key role, and compare them to nations where closeness to and support of family members is crucial for business. Business decisions and partners are likely to be evaluated in a very different fashion. In such instances, administrative actions and laws can be seen as rigorous structural supports for economic development, or as substantial barriers to growth.
The use and meaning of terminology also has its (often temporary) major effects. For example, for decades, the use of the term “Most Favored Nation (MFN)” status in international trade negotiations has led to demonstrations and even street battles. Now, the problem has gone away, since governments have changed the terminology and only speak of “Normal Trade Relations” (NTR), a goal that seems to be acceptable to all. Definitions which shape our understanding of core issues such as “fairness”, “market gaps”, “dumping” and “natural” can be changed or amended, and thus present us with new realities. Nowadays, one discusses and often re-evaluates the meaning and adjustment of key business pillars such as risk, competition, profit, and ownership, which perhaps gradually prepares us for a new environment. Many of today’s business executives discover that their activities are but one integral component of society. Politics, security, and religion are only some of the other dimensions that historically, and maybe again in the future, are held in possibly higher esteem than economics and business by society at large. Those who argue based on business principles alone may increasingly find themselves on the losing side.
We all need to work on including in our considerations the restauration of the future. Just consider how different things will be in a mere 25 or 50 years—keeping in mind that the ballpoint pen only came to the U.S. market in 1945, the computer game Pong only entered the market in 1972, and electronic or email on personal computers only advanced in the late 1980s. Will we look as retro to our descendants as our ancestors appear to us today (if we bother to look)? Yet, at the same time we are only a brief constant in a world of change.
We complain about the new phenomenon of pirates in Somalia—though such a profession was very popular in the Caribbean or during Roman times in Sicily (which is where Pompeius earned his early reputation when he brought about their demise). We highlight the disruptions from terrorism but neglect that already the crusaders had been writing home about their fear of terror. We debate new approaches to teaching and communication, but don’t stop to think what effect Gutenberg’s printing press, wireless telegraphy, or the introduction of radio had on monks, business and society. We deplore the differentiation of groups based on religion, but conveniently forget the impact of Torquemada and the inquisition, of Luther’s theses on the church doors of Wittenberg, of the persecution of Jews or Mormons.
By enhancing our understanding of what Washington-based institutions dealing with trade do to maintain influence and achieve growth, we will learn how to cope with government in our business activities down the road. We will also obtain input regarding impending changes, both highly and lowly visible. In this course we will be cognizant of one of Secretary Rumsfeld’s key policy pronouncements: “There are known knowns, which are things we know that we know. There are known unknowns; that is to say, there are things that we now know we don’t know. But there are also unknown unknowns; these are things we do not know we don’t know.” It is expected that we develop a better understanding of the known unknowns, and perhaps also enter the business and policy chambers of unknown unknowns.
Whole Article available at FORBES
Instead of merely writing a check (then writing it off), why not make a tidy profit from a short-term, high-interest loan, most for under $200, so that a Mexican seamstress may buy a new sewing machine? Or so a Moroccan farmer can buy chickens so he may sell more eggs? Billionaires, global leaders and Nobel Prize recipients are hailing these direct loans to uncollateralized would-be entrepreneurs as a way to lift them out of poverty while creating self-sustaining businesses.
That promise has had a magnetic effect on private capital sources. Microfinance funding from private investors more than tripled to $2 billion in 2006. The field has attracted sterling banks and fund managers, including Citigroup , blue-chip venture capitalists like Sequoia Capital, tycoons like eBay founder Pierre Omidyar and Oscar-winning screen stars such as Robert Duvall–they’ve all joined the chase for returns in microfinance. Today, there are upward of 12,000 microfinance institutions issuing loans.
To help investors parse them, Forbes compiled its first-ever list of the Top Microfinance Institutions. We scoured 2006 data from the Microfinance Information Exchange, as well as analysis from ratings firms Micro-Credit Ratings International Limited and MicroRate, to rank the top 50 microfinance institutions (from a field of 641 reporting microfinance providers) by examining six key variables: gross loan portfolio, operating expense, operating expenses divided by the average number of active borrowers as a percentage of gross national income per capita, the outstanding balance of loans overdue by more than 30 days as a percent of gross loan portfolio, return on assets and return on equity. Each microfinance institution earned scores in four equally weighted categories–scale, efficiency, portfolio risk and profitability. Rankings were then based on the combined average score of those four categories.
To earn a spot on our ranking, the institution must have had audited financial statements for 2006 or submitted these for 2005, with the intention of providing audited 2006 results when available. Note that our rankings attempt to measure financial performance, not the social benefits of any microfinance institution.
Even the least credit-worthy Americans might gasp at the high rates of interest to which recipients of microfinance loans are subjected–as much as 85% isn’t unusual. But veteran microfinance experts are quick to remind scoffers about the typical alternatives–a village moneylender who might charge interest rates three or more times as high.
As is the case for any “hot” investment vehicle, investors should exercise prudence when jumping into the arena. Fly-by-nights aren’t uncommon in this new market. Supporting the wrong microfinance outfit may fail to reduce poverty or produce financial returns. Check out the essay by Morgan Stanleyexecutive Ian Callaghan on the perils of hunting for microfinance investments.
Our microfinance package also includes fresh commentary from Elizabeth Littlefield, a senior World Bank official, who discusses public vs. private funds flowing to this trendy niche. Michael Chu, a veteran private-equity investor in microfinance and Harvard Business School professor, argues why lending to the poor shouldn’t involve self-sacrifice. And legendary actor Robert Duvalland his wife Luciana Pedraza give an exclusive interview to the Forbes Video Network on their work on behalf of microfinance in Latin America.
Exporting higher education generates income for universities and encourages them to become global entrepreneurs. The market is growing. Higher education students have increased by 53% since 2000 to more than 150 million in 2007. In Australia and New Zealand, education is the third and fourth ranking services export. In the United States, international students and their dependents contributed $18.8 billion to the economy during the 2009 -2010 academic year.
However, universities have limited their response to globalization. Typically, they do not translate their experience into an institutional strategy. Many exchange programs do not outlive their faculty founders. International hiring decisions are mostly made in isolation rather than as part of a planned direction. Research collaborations tend to be temporary and international investments have been very limited – be it due to budget or risk constraints.
In fact, universities need to demonstrate the international benefits they can offer. The Roman Empire mainly expanded by offering market places, roads, languages, laws, and linkages. Outsiders joined because affiliation offered the opportunity to live better. Universities need to achieve such voluntary interest as well. Given their knowledge base, their human talent and their cross-disciplinary capabilities, universities need to make the cost of non-collaboration so high that firms seek them out as knowledge source and partner. In addition to funding, universities need freedom. Just as universities helped define the openness and knowledge of principalities and kingdoms, today they can help define global society, competitiveness and influence.
In developing content, universities should concentrate on specific aspects in which to become multidisciplinary experts. Specialization has worked for firms, and will allow universities to provide more value added to society. It will also be important to provide the connectivity between business, research and policy. Profits alone are insufficient for societal prosperity. Religion, family, culture, and security are only a few of the components which universities can incorporate a systemic perspective. This will set their thinking apart and lets their educational efforts become the transmission belt for the internationalization of their economy.