The relative prosperity enjoyed by Uganda during the 1960s, based largely on the traditional exports of coffee, tea, cotton, and tobacco, was eroded by a devastating civil war over the period 1971 to 1985. The paper is based upon interviews with selected respondents, including government authorities, exporting companies, donors, and practitioner organizations, carried out in 2007 and 2008. The paper is divided into four sections. Section one provides a brief historical perspective on the emergence of the Ugandan fruit and vegetable export industry and examines the role played by different government and donor initiatives in the initial shaping of the sector, between the late 1980s and late 1990s. Section two highlights the strategic commercial approaches adopted by Ugandan exporting companies and farmers during the 2000s in response to past performance and in the face of evolving regulatory and market requirements, especially in the European Union. Section three examines the rationale for, means of support of, and apparent efficacy of a range of recent programs seeking to improve or sustain the competitiveness of Uganda's fruit and vegetable exports via improved compliance with regulatory or private standards. Lessons are drawn from this experience. Section four provides a brief set of general conclusions.
China's remarkable economic performance over the last 30 years resulted from reforms that met the specific conditions of China at any point in time. Starting with a heavily distorted and extremely poor economy, China gradually reformed by improving incentives in agriculture, phasing out the planned economy and allowing non-state enterprise entry, opening up to the outside world, reforming state enterprises and the financial sector, and ultimately by starting to establish the modern tools of macroeconomic management. The way China went about its reforms was marked by gradualism, experimentation, and decentralization, which allowed the most appropriate institutions to emerge that delivered high growth that by and large benefited all. Strong incentives for local governments to deliver growth, competition among jurisdictions, and strong control of corruption limited rent seeking in the semi reformed system, whereas investment in human capital and the organizations that were to design reforms continued to provide impetus for the reform process. Learning from other countries' experience was important, but more important was China's adaptation of that experience to its own particular circumstances and needs.
This article reviews trends in poverty, economic policies, and growth in a sample of African countries during the 1990s, drawing on the better household data now available. Experiences have varied. Some countries have seen sharp drops in income poverty, whereas others have witnessed marked increases. In some countries overall economic growth has been pro-poor and in others not. But the aggregate numbers hide systematic distributional effects. Taking both macro and micro perspectives of growth and poverty in Africa, the article draws four key conclusions. First, economic policy reforms (improving macroeconomic balances and liberalizing markets) appear conducive to reducing poverty. Second, market connectedness is crucial to enable participation in the gains from economic growth. Some regions and households by virtue of their remoteness were left behind when growth picked up. Third, education and access to land emerge as key private endowments to help households benefit from new economic opportunities. Finally, rainfall variations and ill health have profound effects on poverty outcomes, underscoring the significance of social risk management in poverty reduction strategies in Africa.
Целью статьи является не только и не столько описание уровня жизни населения, и даже не дифференциация его по уровню жизни как таковая, а анализ неравенства по благосостоянию как важного аспекта существующей в обществе социальной стратификации. Изучая проблемы социально-экономического неравенства в современной России, необходимо, по-видимому, учитывать как общемировые тенденции, так и специфические особенности страны, связанные с ее принадлежностью к трансформирующимся обществам, переживающим переход от советской социетальной системы к новому состоянию, пока еще не во всем определившемуся по своей направленности. Данные представительных опросов экономически активного населения России позволили не ограничиться среднеарифметическими показателями, что особенно важно в условиях резкой социальной дифференциации в показателях уровня жизни. Наши опросы охватили представителей экономически активной части населения. Пенсионеры, инвалиды, студенты, как одиночки, так и образующие самостоятельные семьи, в состав респондентов не входят. Это само по себе означает, что полученные нами характеристики уровня жизни общества скорее несколько завышены, чем занижены. ; This paper aims not only and not just at describing the living situation of the population and its differentiation, but also at analyzing the general inequalities as an important aspect of the existing stratification. In studying problems of socioeconomic inequalities in contemporary Russia it is necessary to consider worldwide tendencies as well as country-specific trends related to its transition from Soviet societal system to a new and yet undefined condition. The data from representative surveys of economically active Russian population allowed us not to confine ourselves exclusively to average figures, which is especially important when considering the dramatic differentiation of living standards. Our samples do not include students and the retired (alone, as well as within families). This in itself means, that the figures we have gained are more likely to be underestimated, than overestimated. In post-Soviet Russia the actions of politicians, who actually defined the social policy in 1990s the beginning of 2000s, to a greater degree were influenced by a neo-conserv-ative wave, which came generally from the USA and Great Britain. One should bear in mind that the concept of reforms came originally from the need for raising the efficiency of the economy system. Social sphere was regarded as one of the elements of the economic policy. The efficiency criterion was economic in nature, while social sphere was one of the general policy constraints. Despite numerous statements about "socially oriented economy", "social state", the development of the social sphere in Russia was not considered as an evident objective of the reforms. Enough to say, there were barely any attempts to solve the poverty question at the beginning of reforms, as well as many years later. It was absolutely ignored, that unlike many transforming national economies most households in Russia lacked the required material and financial resources to ease their adaptation to a new socioeconomic situation. Moreover, "the shock therapy" involved the appropriation of all the savings from population and enterprises in the first months of 1992 through the liberalization of prices without corresponding deposit compensation. In our perceptions over poverty and low living standards of the lower strata we rely on the information about poverty lines, which are drawn from the necessity to satisfy the minimum subsistence needs (according to world-wide accepted criteria). In Russia this means the inability of a family to satisfy its needs in nutrition, clothing, housing with its current income. The forming (and, most likely, fully formed) Russian society features an unprecedented gap between the rich and the poor, unseen anywhere among the developed countries. In 1990s the property differentiation of the population has sharply increased and brought the mass strata of the so called "new poor" working poor. The actual average wage (in the prices of 1991) during 1991-1998 has reduced from 548 to 193 roubles, i.e. almost threefold. Since 1999 the wages started to grow. Although still in 2004, after a 5-year economic growth, the real wage was just 89% of its miserable 1990 level. Only by the end of 2005 the real wage has reached the pre-reform level of 1990 (100.3%). In 2006 the wage has grown 166Summaries at 13.4% and another 16.2% in 2007. This has brought its value to a far greater than the one of the pre-reform period, although one should, of course, consider the lack of the information about the growing income differentiation. Taken for 100% in 1991 the average wage has become 67% in education in 2007 (56% in 2000); 257% in finance; 45% in agriculture; 209% in primary sector (raw materials industry); and 97% in manufacturing industries. In 2006 the greater decile coefficient was observed in trade (33-fold) and financial activities (32-fold). For reference, in industries with a lower level of inequalities in 2006 this figure was: 11.5 in energy, gas and water supplies, 14.5 in transport and 15 in public health and 16 in education. According to independent researches the decile coefficient for the whole population was estimated at 25, while far greater in Moscow 40-50. Even according to the underestimated data of the Russian Statistical Services this figure in 2007 was 16.8 compared with the earlier 13-14. The Audit Chamber has conducted its own evaluation and received the following results: 30 for Russia as a whole and 41 in Moscow. According to the data of our representative survey (December 2006) there exists a high correlation between household income and other types of resources, which households/families possess. All of the corresponding indicators we have used increase with the higher income rates. The correlation of income with other values is more obvious for such group-forming criteria as the index for authority level and the ownership status (ownership of enterprises and/or financial securities). One should also pay attention to a lower social capital of the representatives of the lower income strata. This is a very important evidence, which indicates that the lower strata have mostly worked out this resource, which aided their survival in the early 1990s. After gaining mass support with the loud promises to fight privileges and bring social justice, individual freedom and equal opportunities the newly formed neo-nomenklatura was first forced to conceal the original vector of its policy under the mask of "the social state" that is how it was claimed in the Constitution of Russian Federation. Although for the major part of the ruling class these reforms posed a great opportunity to give up social liabilities in circumstances, where their own appetites for higher living standards have grown sharply, along with the unstable incomes form oil, gas and other exports due to the volatility of the world market. At the same time the infringement of rights for work and the corresponding pay affects almost a quarter of the economically active population. The proportion of the poor has barely reduced. A significant part of the younger people is not just uneducated, but sometimes illiterate. The guarantee for free public medical service has turned into situation, when one would wait for ages for a required surgical operation. The boom in housing construction has no effects on the situation of the lower strata. All this happens against the ostentatious "money waste" not only by the new business class, but also higher government officials, especially the top-managers of government-owned corporations. The social policy is required as long as the people do not interfere with the plans and interests of the new political elite, i.e. the provision of social stability and the legality of their capitals within the country and especially abroad. Summaries167 The post-Soviet ruling strata are unable and have no desire to represent the all-national interests. This reflects, on the one hand, their succession from the Soviet nomenklatura, and, on the other, the lack of traditions for massive political opposition and the forming of counter-elites as, for example, in Poland or Hungary.
The dissertation is devoted to research of macroeconomic policy transformation of the commodity exporting countries, which is considered as a basis for theoretical elaboration and development of methodological foundations of stabilization policy in lowincome commodity-rich countries, as well as technological sophistication of their production structure under globalization.The theoretical and applied dimensions of the globalization processes and the global economy developments have been studied, with a focus upon growing importance of commodity markets. Various aspects of theoretical and applied links between the openness and commodity exports have been analyzed.Important structural shifts in both global demand and supply of raw commodities have been identified. It has been established that the main challenge for commodityexporting countries is accommodation of the volatility (instability) of world commodity prices, especially under conditions of high openness to capital flows.The study developed a methodology for economic and statistical analysis of macroeconomic effects from world commodity price shocks for resource-dependent economies, which enabled to identify the nature of commodity price effects on the dynamics of income, investment, private consumption and inflation in both dimensions – levels and price volatility. The dualistic nature of the commodity boom has been identified, as higher world commodity prices stimulate economic growth of either exporting countries or the world economy as a whole, while volatility in price indices has a clear negative impact on majority of macroeconomic indicators, including investments.A set of instrumental tools for analysis of dominant trends and potential challenges for the world commodity market has been extended, with the phenomenon of financialisation being taken under scrutiny in several aspects: (i) the dependence of commodity prices on the US dollar exchange rate, which may be mistakenly perceived as impact of the stock market indices and interest rates; (ii) the neutrality of the stock prices in respect to the crude oil prices and (iii) a growing interdependence of price dynamics between individual commodity indices.The paper presents an analytical framework for the study of economic processes in commodity economies, which allows identification and systematization of the links between the dynamics of world commodity prices and economic situation of exporting countries in the presence of contradictory internal and external factors that used to be blamed for higher volatility of the world commodity prices, such as the nature of foreign direct investments, institutional problems, excessive optimism and reinvestment in the commodity sector, deepening of commodity market financing, external imbalances and the spread of populism.The analytical tools of research of several features of the commodity boom, as instability of expectations, asymmetry of short- and long-term economic growth effects, excessive external borrowing, institutional quality, and also possibility of non-inflationary short-lived overheating followed by a build-up in inflationary. Macroeconomic effects of increasing commodity price volatility combined with vulnerability to unstable short-term capital flows have been investigated. Such a combination implies a reduction in the equilibrium level of external borrowing as a major «safeguard» for chaotic balance-ofpayments reversals and measures aimed at higher domestic savings, which can finance sufficient investments and facilitate successful stabilization policy in low-income commodity-exporting countries.Using the theoretical framework of the AD-AS model with a «dependent» structure of demand and supply, instrumental tools for stabilisation policy analysis are elaborated. It made it possible to consider several distinct features of flexible exchange rate system in the commodity economy as a factor of maintaining internal and external equilibrium. Research methodology of the phenomenon of commodity currencies is expanded in several directions, accounting of disadvantages of the exchange rate undervaluation, necessity of price incentives for structural shifts between tradable and nontradable goods, and the impact of dollarization. Endogenization of the exchange rate as a factor behind stability of the commodity-exporting countries in the wake of increasing volatility of world commodity markets under inflation.The scenario analysis of inflation targeting in commodity economies is elaborated, which acknowledges the increased role of the exchange rate and foreign exchange reserves as factors of higher confidence in the economy and increase of private investments. Both factors make it possible to reduce the time lag between changes in monetary policy and inflation and envisages reduction of macroeconomic risks related to volatility of world commodity prices.A methodological approach for stabilization policy in a low-income commodity-rich economy is proposed, based on a coherent application of fiscal and monetary policy rules in the flexible exchange rates framework. For commodity exporters, viability of countercyclical fiscal policies has been confirmed as a factor in reducing interest rates, increasing both savings and investments, and improving current account balances. The expediency of an expanded monetary policy rule (taking into account the behaviour of world commodity prices) as a means of improving the effectiveness of a stabilization policy in a low-income commodity economy has been substantiated.Using the portfolio model with different returns on commodity and non-commodity sectors, the inability of automatic improvement in the structural proportions of the Ukraine's economy has been proved, provided its present level of structural proportions between the two sectors, commodity and non-commodity (technological), at below the equilibrium level. The expediency of structural shifts in favour of the non-commodity sector by strengthening of the exchange rate, attracting foreign direct investments and implementation of limited state intervention (infrastructure modernization, human resources' development) is explained. All abovementioned policy moves should alleviated dependence on the world commodity prices volatility, as well as increase the rate of longterm economic growth.On the basis of proposed index of structural changes, a methodology for the evaluation of systemic functional relationships of the Ukraine's economy, such as high index of economic complexity, inverse relationship between investments and volatility of commodity prices, but under conditions of the industrial sector resilience to the latter, neutrality of both inflation and private consumption in respect to price volatility), has been developed. In turn, it made it possible to conceptualize the dimensions of macroeconomic policy for transformation of the commodity-export model of Ukraine by an increase in budget revenues, responsible monetary policy, low inflation, gradual reduction of exchange rate undervaluation to 10-20%, freedom of entrepreneurship, tapping of foreign direct investments (including preferences for activities in the non-commodity sector), as well as accelerated harmonization of legislation in accordance with European standards.Theoretical and applied approaches for assessment of economic freedom as a means of improving structural proportions and stimulating the investment process in an economy with an excessive commodity sector (as in Ukraine) have been formulated in the paper. It enables to determine the guidelines for priority liberalization of the economic environment (freedom of investments, streamlining of government expenditures, freedom of entrepreneurship, protection of property rights), while at the same time avoiding the potential risks of rapid liberalization of the financial market and foreign trade.It has been empirically proved that Ukrainian export should be reoriented to EU countries, since increasing their share in domestic exports is accompanied by an acceleration of GDP dynamics and, importantly, increasing the share of non-commodity export relative to commodity export, that is, improving the quality structure of foreign trade. ; Дисертаційну роботу присвячено дослідженню процесів трансформації макроекономічної політики країн-експортерів сировинних ресурсів в умовах глобалізації й на цій основі – теоретичному обґрунтуванню та розробленню методологічних засад стабілізаційної політики в економіці зі сировинною орієнтацією й низьким рівнем доходу.Розкрито теоретичні та практичні виміри розвитку процесів глобалізації та формування глобальної економіки, з акцентуванням зростаючого впливу сировинних ринків. Досліджено проблеми теоретичних та методичних зв'язків між відкритістю економіки та сировинним експортом.Оцінено структурні зрушення у сфері глобального попиту та пропозиції сировинних товарів. Встановлено, що головним завданням для країн – сировинних експортерів є адаптація до волатильності (нестабільності) світових цін на сировину, тим більше в умовах відкритості для потоків капіталу.В дослідженні розроблено методологію економіко-статистичного аналізу макроекономічних ефектів від зміни світових цін на сировину для ресурсозалежних економік, яка дала можливість ідентифікувати характер впливу сировинних цін на динаміку доходу, інвестицій, приватного споживання та інфляцію в обох вимірах ‒ рівнів і волатильності цінових індексів. Доведено дуалістичну природу сировинного буму, який, по-перше, проявляється у стимулюванні економічного зростання країнекспортерів за умови підвищення світових цін на сировину, по-друге, в негативному впливі на економіку загалом і на інвестиційну динаміку зокрема, у зв'язку із волатильністю цінових індексів на глобальних товарних ринках.Удосконалено інструментарій аналізу викликів і суперечностей світового ринку сировинних товарів, що передбачає врахування феномену фінансизації (зокрема, виявлено залежність цін на сировину від обмінного курсу долара США, яка може помилково сприйматися як вплив чинників фондового ринку і процентної ставки; незалежність курсу акцій від цін на сиру нафту; взаємопідсилення цінової динаміки між окремими сировинними індексами).В роботі розкрито аналітичний апарат дослідження економічних процесів у сировинних економіках, що дає змогу ідентифікувати та систематизувати зв'язки між динамікою світових цін на сировину та економічною ситуацією країнекспортерів за умови суперечливих внутрішніх і зовнішніх чинників (характер прямих іноземних інвестицій, інституційні проблеми, надмірний оптимізм та переінвестування в сировинному секторі, прогресуюча фінансизація сировинних ринків, платіжні дисбаланси та поширення популізму) задля підвищення стійкості до волатильності світових сировинних цін.Удосконалено аналітичний апарат дослідження особливостей сировинного буму, що враховує нестабільність очікувань, асиметрію залежності від умов торгівлі коротко- і довгострокового економічного зростання, схильність до надмірних зовнішніх запозичень, якість інституційних чинників, а також можливості неінфляційного короткочасного «перегріву» економіки, який надалі зумовлює тривалу інфляційну інерцію.В роботі досліджено макроекономічні наслідки поєднання зростаючої волатильності сировинних цін з вразливістю до мінливості короткочасних потоків капіталу. Така ситуація передбачає зниження рівноважного рівня зовнішніх запозичень як головного «запобіжника» для хаотичних реверсів платіжного балансу та заходи щодо збільшення внутрішніх заощаджень, а це уможливлює надійне фінансування інвестицій та полегшує умови проведення стабілізаційної політики в країнах-експортерах сировинних ресурсів з низьким рівнем доходу.В дослідженні удосконалено інструментарій аналізу стабілізаційної політики під час сировинного циклу за рахунок розширення моделі AD-AS із «залежною» структурою сукупної пропозиції і сукупного попиту, завдяки чому можливо повніше враховувати особливості гнучкого курсоутворення в сировинній економіці як чинника підтримання рівноваги доходу і платіжного балансу.Розкрито методику дослідження феномену «сировинних» грошових одиниць, яка враховує недоліки тривалого підтримання заниженого обмінного курсу, потребу в цінових стимулах для зміни співвідношень між секторами внутрішньої і зовнішньої торгівлі та вплив доларизації економіки, маючи на меті ендогенізацію обмінного курсу як чинника стійкості економік країн-експортерів сировини до зростаючої волатильності світових сировинних ринків за умов політики таргетування інфляції.Обґрунтовано підхід до сценарного аналізу політики таргетування інфляції у сировинних економіках, що відрізняється визнанням підвищеної ролі обмінного курсу та валютних резервів як чинника зростання довіри до економіки та збільшення приватних інвестицій, що дає можливість скоротити часовий лаг між змінами в монетарній політиці та інфляцією і передбачає зниження макроекономічних ризиків, пов'язаних з нестабільністю світових цін на сировину.Запропоновано методичний підхід до стабілізаційної політики в сировинній економіці з низьким доходом, який ґрунтується на узгодженому використанні правил фіскальної і монетарної політики за умов гнучкого курсоутворення. Для країн-експортерів сировини підтверджено конструктивність антициклічної фіскальної політики як чинника зниження процентної ставки, збільшення заощаджень та інвестицій, а також поліпшення сальдо поточного рахунку. Обґрунтовано доречність розширеного правила монетарної політики (з урахуванням поведінки світових цін на сировину) як засобу підвищення ефективності стабілізаційної політики в сировинній економіці з низьким рівнем доходу.За допомогою портфельної моделі з різною дохідністю сировинного і несировинного секторів доведено неможливість автоматичного поліпшення якісної структури економіки України за умови перебування на нижчому від рівноважного рівні структурних пропорцій між обома секторами – сировинним і несировинним (технологічним). Обґрунтовано доцільність стимулювання структурних змін на користь несировинного сектора шляхом зміцнення грошової одиниці, залучення прямих іноземних інвестицій та обмеженого державного втручання (модернізація інфраструктури, розвиток людського капіталу), що уможливить не лише уникнути залежності від волатильності світових сировинних цін, але й підвищити довгостроковий темп економічного зростання.На підставі розрахованого індексу структурних змін розроблено методологію оцінки засадничих функціональних зв'язків, що враховує специфіку економіки України (обернена залежність інвестицій від волатильності світових цін на сировину, але за умови стійкості промислового сектора до цього чинника, незалежність інфляції і приватного споживання від цінової нестабільності), яка дала змогу концептуалізувати зміст макроекономічної політики для трансформації сировинно-експортної моделі економіки України шляхом збільшення надходжень до бюджету, проведення стримуючої монетарної політики та досягнення низької інфляції, поступового зменшення амплітуди заниження обмінного курсу гривні до 10-20%, свободи підприємницької діяльності, залучення прямих іноземних інвестицій (включно з наданням преференцій для діяльності у несировинному секторі), а також прискореної гармонізації законодавства відповідно до європейських норм.У роботі сформульовано науково-прикладні засади оцінки важливості економічної свободи як засобу поліпшення структурних пропорцій та стимулювання інвестиційного процесу в економіці з надмірним сировинним сектором (на зразок України), які дають можливість визначити напрями першочергової лібералізації економічного середовища (свобода інвестицій, впорядкування урядових видатків, свобода підприємницької діяльності, захист прав власності) й водночас уникнути потенційних ризиків від поспішних лібералізаційних заходів на фінансовому ринку та у зовнішній торгівлі.Емпірично доведено доцільність переорієнтації українського експорту на країни ЄС, адже збільшення їхньої частки у вітчизняному експорті супроводжується прискоренням динаміки ВВП і, що важливо, підвищує частку несировинного експорту порівняно зі сировинним, тобто покращує якісну структуру зовнішньої торгівлі.
How does access to finance impact consumption volatility? Theory and evidence from advanced economies suggests that greater household access to finance smooths consumption. Evidence from emerging markets, where consumption is usually more volatile than income, indicates that financial reform further increases the volatility of consumption relative to output. This puzzle is addressed in the framework of an emerging economy model in which households face shocks to trend growth rate, and a fraction of them are financially constrained, with no access to financial services. Unconstrained households can respond to shocks to trend growth by raising current consumption more than the rise in current income. Financial reform increases the share of such households, leading to greater relative consumption volatility. Calibration of the model for pre- and post-financial reform in India provides support for the model's key predictions.
Latin America's historically low saving rates and sub-par growth performance raise the question of whether the region should save more to grow faster. Economists generally resist acknowledging a policy-exploitable causal connection going from saving to growth because domestic saving is perceived to be fully endogenous, optimally determined, or fully substitutable by foreign saving. However, to the extent that these three assumptions do not hold, three channels can be established through which higher domestic saving—by curbing persistent current account deficits—can promote medium-term growth. The channels are first, a real interest rate channel, whereby higher saving reduces the cost of capital and enhances macro sustainability; second, a real exchange rate channel, through which higher saving leads to a more competitive real exchange rate; and third, an endogenous saving channel, whereby saving follows growth and, hence, subsequently compounds the effect of the first two channels. Econometric evidence supports all three channels and suggests that the lower-saving countries in Latin America and the Caribbean, especially those with recurrently weak balance of payments and persistent domestic demand pressures on the non-tradable sector, would benefit the most from boosting their saving rates.
The objective of this report is to assess important developments in the global aviation industry and how this affects civil aviation in Norway and Europe. The report is based on an academic literature review and other secondary sources. The challenges brought about by deregulation and the emergence of low cost carriers (LCCs) as well as more recently, the 'Middle East 3' airlines (Emirates, Etihad Airways and Qatar Airways), call for major political attention from a range of stakeholders. With this in mind, we have drawn on a wide literature, both geographically and chronologically speaking, with a view to drawing insights from experiences of deregulation. An appraisal of the American deregulation experience is provided, which results in various unintended consequences whose ripple-effects continue to shape the sector. In particular, we point to changes in the field of labour, in the broad sense, and the network infrastructure. With regard to the former, it is apparent that a job in aviation no longer carries the prestige it once did. Intense competition has led to increased labour productivity and wage cuts. The example of Colgan Air bears out some of the risks identified with increased pressures and strains in aviation. However, it would be spurious to assume a connection between inferior labour conditions and LCCs. In terms of network and infrastructure, research identified so-called 'pockets of pain' where fare prices remain high while connectivity remains relatively low. Also, airline consolidation has not delivered the certainty purported by the economic theory. Despite initial innovations by LCCs, these airlines, in terms of service and fares, are now largely indistinguishable from their U.S. legacy counterparts. Today, we can speak of four major U.S. airlines. Consequently, yet another industry is deemed 'too big to fail' and its costs, some of which can be the result of poor decision-making, are borne by the general public. For some, this oligopolistic tendency is best addressed through further liberalization. This raises an important question regarding the efficient market hypothesis and the spatial boundaries of deregulation. While the European experience of deregulation in the aviation sector, by comparison, has been more piecemeal it has by no means been less complex. On the contrary, a variety of social and fiscal regimes has complicated matters considerably. This heterogeneity has implications for the industry structure, business and employment models as well as regulatory oversight mechanisms. In particular, LCCs adopt different business or employment models thereby defying a 'one-size-fits-all' approach. While intrinsically linked, it is important, for analytical purposes, to distinguish between the business and employment models that are adopted by airlines. Hence, understanding the specific models that LCCs adopt is critical to drafting a relevant and effective aviation strategy. In addition to the standard employment relationship, typified by the legacy carriers and some LCCs, this report examines four possible employment models that LCCs might use. Approaches can vary whether we speak of pilots or cabin-crew. By providing practical examples, it is possible to discern the increasingly contentious nature of such employment arrangements. For too long aviation has operated under the radar of public imagination. The findings of the so-called Ghent Report from 2015, which highlights the extent of atypical employment in the case of pilots, should not be overlooked. Nor should the potential consequences for flight safety be underestimated. Phenomena such as zero hour contracts and 'bogus' self-employment are becoming increasingly commonplace in the cockpits of aircraft. To boot, young and inexperienced pilots are entering schemes called pay-to-fly (P2F) on revenue-earning flights. There is an onus on politicians to be up to speed on such developments and their deleterious effects on the aviation sector. Equally, there is a responsibility on the media not to be co-opted by industry and to report accurately on such practices. This is in the public interest. For the best part, we have focused on the different employment and business models adopted by two LCCs that are of particular relevance to the Norwegian context, namely Ryanair and Norwegian Air Shuttle (NAS). Clearly, there is a preference for litigation in the legal arena where loopholes make a mockery of national legal systems. This is especially the case with Ryanair, and the Cocca case is demonstrable of this. This case can also help explain Ryanair's departure from Rygge airport. More recently there is evidence that NAS is becoming just as inclined to challenge, what might hitherto have been taken as granted, in a courtroom be it in Norway or further afield. In terms of business models, there is a marked difference between the two LCCs. For instance, NAS has created a number of subsidiaries (e.g. Norwegian UK). Since, May 2013, Norwegian has entered the long-haul market to Asia and the U.S. and has created two subsidiaries, Norwegian Long Haul (NLH) and Norwegian Air International (NAI), registered in Norway and Ireland, and with Norwegian and Irish AOCs, respectively. The decision to register NAI in Ireland has been the source of controversy, which is exemplified by the unprecedented delay in the U.S. DOT granting NAI a foreign carriers permit. The principal reason for this is that there is a genuine concern that NAI will operate trans-Atlantic flights with 'crews of convenience' from Asia. NAI deny any such intentions. Ryanair's corporate structure, on the other hand, is less fragmented; however, the Irish airline has a clear preference for the use of secondary airports, the use of which have been central to its competitive business strategy. This has put airports in direct competition with one another with, at times, perverse outcomes. In doing so, Ryanair seeks to extract concessions from airports. Negotiations take place under the threat of severe service reduction or even complete base abandonment. Furthermore, it is not unusual for such negotiations to be conducted in the public realm. Ryanair has become synonymous with publicity stunts in a bid to build their brand or strengthen their bargaining hand. The Rygge debacle is emblematic of such antics. While it is possible to discern variations between different airlines with regard to employment models vis-à-vis pilots there is a degree of commonality in consequential terms. The question is whether a culture of safety, integral to the aviation sector, is being replaced by a culture of fear? By removing any semblance of security, through employment legislation or trade union membership, a pilot's future employment is at the whim of the airline bosses. In such an environment, pilots are reluctant to raise their heads above the parapet for fear of being identified as being a troublemaker. Such a development inevitably impinges on the question of flight safety. To demonstrate the risks pilots run in highlighting safety concerns, we present the case of Captain Coleman. This case is indicative not only of the intimidating environment created through atypical employment, but also how regulatory oversight is compromised. The use of different business and employment models creates procedural ambiguity, which leads to a knowledge gap with regard to airline employees and/or a regulatory gap when it comes to determining with which regulatory agency responsibility actually lies. Individually or accumulatively, such ambiguity negatively affects a culture of safety. In light of these developments in the European aviation industry, a number of recommendations are made which should inform Norway's aviation strategy. These recommendations can be divided into four broad approaches: i) ensuring the continuance of a culture of safety is paramount; ii) addressing regulatory loopholes that facilitate social dumping by clarifying key concepts such as 'operator' and 'home base' is necessary to create a level playing field; iii) when engaging with the ME3s, a European strategy is essential so as to counter a divide and conquer strategy; and iv) increased demand for aviation must be met with a commitment to well-trained pilots with pay-to-fly schemes being prohibited. Naturally, these recommendations require political will. In addition, regulatory agencies, including the tax authorities, must work in close cooperation with each other. Addressing social dumping and regime shopping also requires cross-border action and greater coordination between national regulatory agencies, as well as an enhanced role for organized labour, so as to ensure that regulatory and knowledge gaps are closed. While the success of airlines' decisions are reliant on good timing, such a comfort cannot be afforded to the question of regulatory oversight. Hence, political will and the enactment of rules will not suffice. Coordinated and proactive oversight, both within and between countries, is fundamental.
This thesis focuses on the role of forests and forest management in providing global environmental and climate services. The study analyzes multiple dimensions of forest-sector policy development, with a special focus on interactions between policies, livelihoods and land-use processes at sub-national levels in Vietnam. The Lam Dong and Bac Kan provinces are considered to be representative of the variations in forest-cover dynamics in the country, namely those of a frontier (deforestation) zone, and a forest mosaic (reforestation) zone. The study applied interdisciplinary conceptual frameworks, including institutional theory, political ecology and livelihoods theory, to investigate the research objectives. It also used Forest Transition (FT) theory as a narrative framework to understand the trajectories of forest-cover dynamics and policy processes. An interdisciplinary methodological approach was applied to respond to the research objectives of the study. The results may have important implications for emerging forest and environmental policy frameworks such as payments for environmental services (PES) and Reduce Emissions from Deforestation and forest Degradation (REDD+). The findings reveal that 'second-generation' policy approaches, such as PES and REDD+, are unlikely to represent a paradigm shift in the history of forest management in Vietnam. As a result of institutional reproductions and 'path dependency', there is a rather high risk of prolonging existing approaches. Larger and more fundamental policy reforms, such as independence, the collectivization processes after the Second World War, and the market liberalization and decentralization reforms from the late 1980s onwards, were identified as fundamental explanatory factors for land-use dynamics in the contemporary history of the country. Furthermore, one-dimensional and reductionist land-use change explanation models, inherent to many of the emerging policy schemes such as PES, REDD+ and forest enhancement, risk overlooking the complexities of land use, livelihoods and underlying dimensions of the drivers of change. Complex institutional factors and the interests of more – or less – powerful actors, in the process of creating institutional bricolages, contribute to modifying and transforming policy programs and schemes into local adaptations. The thesis presents four individual but interrelated papers that address different aspects and scales of policy development processes and impacts. Paper 1: Analyzing the transformation of forest PES in Vietnam: Implications for REDD+ The paper analyzes the transformation of market-resembling environmental policy processes, exemplified by the implementation of forest PES in Vietnam. The paper applies a critical institutional path dependency framework to analyze the processes of institutional reproduction in PES encounters with actors and institutions at multiple levels, from the national to the local. PES policies did not enter an institutional vacuum, but instead were transformed through a process of reproducing existing institutional structures. This reflects not only established norms and values about 'best-ways' of organizing forest management, but also existing structures of power, tenure and the control by some groups over forest resources. In this sense, from a path dependency perspective, new and 'innovative' market-based approaches, such as PES, do not at all represent 'critical junctures'. The findings of this study may have important implications for the prospects of implementing similar initiatives, such as REDD+, both in Vietnam and beyond. Thus future PES and REDD+ schemes should take into account the limitations and challenges of institutional reproduction, interplay and path dependency, to a higher degree in their planning and implementation. Paper 2: Sub-national forest transitions in Vietnam This paper compares forest transitions (FT), policy reforms and forest cover change in the Bac Kan and Lam Dong provinces of Vietnam. The country has seemingly been able to shortcut the perceived FT stages by quickly moving to the reforestation phase, which makes it an interesting case country. Provincial level forest cover and socio-economic trends are, however, not necessarily comparable and compatible within a FT analytical framework. Bac Kan is one of the poorest provinces, but has experienced forest regrowth and expansion of forest cover during the past couple of decades. In contrast, Lam Dong province has both higher GDP and population levels, but has had higher levels of deforestation, particularly linked to the expansion of perennial crops. This is quite contrary to what could be expected from a conventional FT hypothesis. The FT turnaround and land use dynamics were found to be linked to the overall and all-encompassing policy shift related to de-colonization, state-control and collectivization, and the new shift of "market-led socialism", decentralization and land tenure reforms. The findings demonstrate that policies can trump typical FT patterns linked to general development trends. This provides a sense of relief in the way that the FT-trajectory is not unavoidable. Policies can make a difference. Yet, these policies have not primarily been guided by forest conservation concerns, but have rather been a side-effect of economic development and political objectives. Paper 3: Livelihoods and land uses in environmental policy approaches: The case of PES and REDD+ in the Lam Dong Province of Vietnam This paper explores assumptions about the drivers of forest cover change in a PES and REDD+ context in the Lam Dong Province in Vietnam. In policy discourses, deforestation is often linked to 'poor' and 'ethnic minority' households and their unsustainable practices such as the expansion of coffee production (and other agricultural activities) into forest areas. The paper applies a livelihood framework to discuss the links between livelihoods and land use amongst small-scale farmers in two communities. The findings of the livelihood survey demonstrate no clear linkages between poverty levels and unsustainable practices. In fact, the poorest group of households was found to deforest the least. The ways in which current PES and REDD+ approaches are designed do not provide appropriate solutions to address the underlying dimensions of issues at stake. The paper criticizes one-dimensional perspectives of the drivers behind deforestation and forest degradation often found in public policies and discourses. We suggest more comprehensive analyses of underlying factors encompassing the entire coffee production and land use system in this region. Addressing issues of land tenure and the scarcity of productive lands, and generating viable off-farm income alternatives seem to be crucial. Sustainable approaches for reducing deforestation and degradation could be possible through engaging with multiple stakeholders, including the business-oriented households in control of the coffee trade and of land transactions. Paper 4: Cultivating forests: Exploring the productive values of forest land in a reforestation zone of northern Vietnam The paper challenges the predominant forest-agriculture dichotomy perception in policy-making and research in Vietnam. Such dichotomies are not endemic to Vietnam, but permeate the whole climate and forest debate globally. This standpoint encompasses a perception that forests are of higher value kept standing and that agricultural practices, forest conservation and the sustainable use of forests are mutually exclusive activities. This study is based on a survey carried out in the province of Bac Kan in northern Vietnam, and applies a livelihoods framework (LF) to investigate the multiple values of forest lands in household economies. The case demonstrates the complexities of adaptations to forest-sector policies, namely that households in different institutional and agro-ecological locations create and use landscapes differently along a forest-agriculture continuum. The findings on the multipurpose uses of forests may have important implications for climate-related forest policies, such as REDD+ and reduced emissions from all land uses (REALU). Policy makers need to engage with people and local communities, their social institutions and agricultural practices, and consider context-specific approaches for integrating the objectives of conserving trees, increasing carbon stocks, and enhancing the total productivity and total outcomes and values of landscapes. The study recommends inter-sectoral and multi-stakeholder policy approaches to integrate and mainstream multiple objectives, including forestry, agriculture, energy, and environmental services such as food production, carbon capture and storage, water provision, and biodiversity conservation. The study concludes that predominant REDD+ discourses, such as those of ecological modernization and green governmentality, encompass presumptions and risks of one-dimensional and reductionist explanation models of the drivers of land-use change processes. In other words, there is an inherent logic – and need – to identify actors of change who must to be compensated for refraining from cutting down trees, and supported in planting new ones. In reality, however, developing and implementing forest conservation and enhancement policies are highly complex processes, influenced by multiple sets of institutional and agro-ecological factors. Policy implementation and land-use change linked to livelihood processes are multifaceted and dynamic imperatives, influenced by multiple institutional structures and actors, with different interests and agendas. The need to act for more sustainable management of tropical forests seems to be indisputable; however in order to make REDD+ policies more efficient, effective and equitable, the institutional complexity and interests of multiple stakeholders need to be taken into account. ; NMBU; Nansen Fund/UNIFOR - University of Oslo
How Chile became home to the world's most radical free-market experiment—and what its downfall suggests about the fate of neoliberalism around the globeIn The Chile Project, Sebastian Edwards tells the remarkable story of how the neoliberal economic model—installed in Chile during the Pinochet dictatorship and deepened during three decades of left-of-center governments—came to an end in 2021, when Gabriel Boric, a young former student activist, was elected president, vowing that "If Chile was the cradle of neoliberalism, it will also be its grave." More than a story about one Latin American country, The Chile Project is a behind-the-scenes history of the spread and consequences of the free-market thinking that dominated economic policymaking around the world in the second half of the twentieth century—but is now on the retreat.In 1955, the U.S. State Department launched the "Chile Project" to train Chilean economists at the University of Chicago, home of the libertarian Milton Friedman. After General Augusto Pinochet overthrew socialist president Salvador Allende in 1973, Chile's "Chicago Boys" implemented the purest neoliberal model in the world for the next seventeen years, undertaking a sweeping package of privatization and deregulation, creating a modern capitalist economy, and sparking talk of a "Chilean miracle." But under the veneer of success, a profound dissatisfaction with the vast inequalities caused by neoliberalism was growing. In 2019, protests erupted throughout the country, and in 2022 Boric began his presidency with a clear mandate: to end neoliberalismo.In telling the fascinating story of the Chicago Boys and Chile's free-market revolution, The Chile Project provides an important new perspective on the history of neoliberalism and its global decline today
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Gross Domestic Product (GDP) growth accelerated to an unprecedented 17.3 percent in 2011 from 6.4 percent in 2010 and the unemployment rate fell from 13 percent in 2010 to 9 percent in 2011. However, real wages for unskilled workers in the urban informal sector are starting to fall as the inflation rate reached 11.1 percent year-on-year in December. Sharply rising government spending is the root cause of overheating: government spending rose by 56 percent in 2011 and is budgeted to rise by a further 32 percent this year, fueled by sharply rising resource revenues. This pro-cyclical fiscal policy could result in another 'boom-and-bust' cycle Mongolia experienced before, particularly as the global economy could face a substantial slowdown in growth due to the continuing European sovereign debt crisis, and which could result in a sharp drop in mineral prices and subsequently government revenues There have been major legislative developments in 2011 and early 2012 aimed at strengthening policy institutions and frameworks. The Integrated Budget Law (IBL) was passed in December 2011: this organic budget law contains measures to support fiscal sustainability and the successful implementation of the Fiscal Stability Law. It also strengthens the public investment framework by requiring feasibility studies and alignment with national priorities for projects to be included in the Public Investment Program and the budget. The Social Welfare Law was passed in early January. This mandates the provision of a targeted poverty benefit replacing the existing system of universal cash transfers. To ensure macroeconomic stability and to prevent a hard landing for the economy in case of an adverse external shock, Mongolia needs to adhere strictly to prudent fiscal policies as set out in the FSL and IBL and tightening both fiscal and monetary policy to reduce inflation, take macro-prudential action to reduce systemic risks in the banking sector and maintain a flexible exchange rate that will act as the first buffer in any external shock materializes. These are uncertain times for Mongolia. The economy faces growing headwinds from the global economic environment, while the looming elections increase domestic uncertainty. Until a substantial amount of savings has accumulated in the stabilization fund, Mongolia remains strongly exposed to volatility in commodity prices.
Vietnam has navigated the global crisis better than many other countries. GDP grew by 5.3 percent in 2009, accelerating to 6.9 percent in the last quarter of the year. At 5.8 percent, the figure for the first quarter of 2010 was less impressive, but claims that growth has slowed down are most probably unwarranted. Exports declined in 2009, for the first time since the beginning of economic reforms, but their decline was smaller than in other countries of the region. By now export growth is converging back to the 30 percent annual growth rate observed before the crisis. Inflation, which had reached 19.9 percent in 2008, was down to 6.5 percent in 2009. While there were some worrying signs of inflation acceleration in late 2009 and early 2010, by now the monthly increase of the Consumer Price Index (CPI) is again moderate. And as in previous years, there were no banking crises despite the continuation of macroeconomic turbulence. More generally, lack of clarity by markets forces the government to overshoot in its policy reactions. Because markets are not sure to understand what the government is up to, they need to see very strong action in order to be convinced that the right course of action has been taken. As a result, Vietnam has had to go through dramatic shifts in the policy stance as circumstances changed. The stabilization policies of 2008 effectively 'killed' the real estate bubble and brought inflation rates to zero in just a few months, but such speed took a toll on economic activity. The stimulus policies of 2009 were equally strong and determined, but they ended up putting too much pressure on international reserves. With more information disclosure and better communication, policy shifts could perhaps be less extreme. Combined with stronger macroeconomic management, it should be possible for Vietnam to gradually free itself from the 'stop-and-go' cycle that has characterized macroeconomic policies over the last three years.
India's economic performance in FY2009/10 shows that the recovery from the slowdown during the global financial crisis is well underway. India's Gross domestic Product (GDP) growth in FY2009/10 has beaten expectations by reaching 7.4 percent compared with 6.7 percent in the previous year. In particular, agricultural sector growth was better than feared with a slightly positive growth rate despite the worst monsoon shortfall in three decades. Strong growth in the fourth quarter pushed annual GDP growth to 7.4 percent in 2009-10. Fourth quarter growth reached 8.6 percent (y-o-y), the highest quarterly growth rate since the end of FY2007/08. The industrial sector's robust recovery beat expectations. Growth in the last quarter of fiscal year FY2009/10 was an unexpectedly high 13.3 percent resulting in over 12 percent growth in the second half of year, nearly double the 6 percent growth witnessed in the first half. Higher inflation mars the bright picture, but there are clear indications of moderation. Inflation as measured by the wholesale price index (WPI) averaged 10 percent during February-May 2010. India's recovery after the slowdown seems well underway. Growth is projected to climb to 8-9 percent in the next two years. These growth rates are achievable without a renewed build-up of inflationary pressure as long as agricultural growth returns to trend, infrastructure constraints are alleviated, and international prices remain stable. Over the next year, sources of growth will shift from fiscal stimulus to manufacturing and, possibly a recovering agriculture.
From the introduction: Ongoing globalization leads to the metamorphosis of social and economic structures and changes the scope of national governmental and non-governmental institutions. Not at least, it changes the aspect of national mentality. The creation of the European Union in 1957 is only one example for the fusion of economic and political domains. In fact, financial and capital markets liberalize, the number of global player rise, and the establishment of international non-governmental organizations increased from 1956 to 1997 by 1,600 % from 985 to 15,965. On the whole, the opportunities for business´ to take influence on the global level are higher and probably more necessary than ever before in history. Economic interrelations and dependencies, international scarcity of non-renewable energy resources and the global climate disaster lead to the necessity of introducing international institutions that act not only in national interest, but serve for the global stabilization of the world economy and its sustainability. A new aspect or logic consequence of globalization arises: Global Governance (in the following abbreviated as GG). GG is one major concomitant phenomenon in the ideology in the disparity in national interests of sovereign states. This difference in the interests of individual items compared to the interests of the entire society exists as long as human beings. Literature calls it the 'moral hazard phenomenon'. There might be common, as well as divergent interests on an efficient solution of various problems, for example in the areas of shelter for refugees and asylum seeker, the problem arising from weapons of mass destruction and the regulations of CO2 emissions. With ongoing globalization there arises a complex multidimensional competition framework. Not only global commercial companies, but also national entities start to compete in terms of production factors, fiscal and political environment and legal frameworks with each another. Figure 1 illustrates the global competition framework by showing up the interrelation among country A and country B. The countries are illustrated including first, their official political entity (government) and secondly, to the Trans-National Companies (in the following abbreviated with TNCs) operating within the country. The third party illustrated is 'the employment'. National government, TNCs and the employment of civil society are interrelated with each another within one country in two directions. Firstly, the TNCs affect the employment and therefore as a result, the government. The higher the action of TNCs within the country, the higher is the employment rate of the civil society (the lower the unemployment). The lower the unemployment rate, the more satisfied the civil society is, and therefore the more powerful the government becomes (because of higher chances to be re-elected). Secondly, the government has impact on the benefits and competitive advantage of TNCs. The better the education policy, the more valuable becomes the human capital. The better the human capital, the more efficient and thus the higher the productivity of TNCs becomes. On a whole, national government can create benefit for TNCs and the other way around. Figure 1 also illustrates the competitive relationship among country A and country B. Both countries compete in terms of providing attractiveness to the TNCs. Attractiveness can be reached by the creation of valuable factors (such as skilled labour et al.). However, this skilled labour also needs to be attracted. As the model introduces a second country, skilled labour can easily move to a place with better factors for the society (better living conditions, better security system, better employment chances, better environmental care, and much more). Though, governments do not only compete for TNCs, but in addition to that for civil society and as a result, finally for voters and power. To sum up, TNCs compete with each other in terms of production. Governments compete with each other in terms of factors. Both, TNCs and the national government, depend from each another and can therefore form an alliance in order to gain in competitive advantage and Global Power (abbreviated in the following as GP). From the aim driven point of view (as explained further in section 1.3.2), GG aims to face and to deal with global challenges in order to balance the markets, to maximize overall welfare and aspire an equal distribution of resources and wealth all over the world. At the same time, GG can be used as a strategic measure and a tool for regulating markets and gaining in competitive advantage and GP. This thesis is going to deal with GG as business strategy based on the neo-realistic approach. The increased presence of TNCs in local economies as a strategy to ensure market control has been labelled 'glocalization'. Research Question: At least after WW II, global society started to realize the ongoing trend for economic trade-off, liberalization of markets and the principle of the invisible hand; not only on a national stage, but on the global layer. National boarders melt, since the action of trade, the economic power, now shifts from the national level to a global degree. International acting companies gain in power and influence with, for instance, direct investments, rising turnover, increased cash flows, and not at least with their bargaining power (in the following abbreviated with BP). The increase in BP is often linked to (global) political activities. Global player, such as TNCs, serve often as a tie between several nations and economies. Though, there are still national governments, and national interests that are not to bring in line with the interests of the global society as a whole. There sometimes might be also dissensions among governments and the TNCs operating in the same arena. The crucial factor then is the BP of the actor. It is not always the case, that government and TNC are equal in having BP. Often there arises an asymmetric dependency, which causes a drop of BP for one of the parties. That disparity and the management of different parties' interests in general, is what Global Governance is all about. During the last 50 years, companies used their BP in order to implement national lobbying as an instrument for gaining in Global Power (in the following abbreviated as GP). Now, as national levels are detached from global platforms and by the GG framework, there arises one important question: Is Global Governance a useful strategy tool for the business sector? In most literature, Global Governance is defined to be an aim driven, goal oriented approach in order to solve problems resulting by the globalization process. But there is only little research in order to find an explanation of how exactly GG is organized. The first essential question to answer now is: What are the factors that influence GG? The second question is: How do these factors influence GG? Third question is: Is there a relation between GG and GP? Last question: Can GG be used as a business strategy in order to increase GP? If yes, how? Research Methods: The thesis´ objective is it to figure out the relationship of involvement into Global Governance and the business´ Global Power. It is pre-assumed that an increase in Global Power leads to an increase in a business market dominating power. Thereby it will be found out, what particular can be done to gain in Global Governance involvement. Several strategies are imaginable. This thesis will work out a new strategy approach by combining 1) Porter's 5 Forces model with 2) Hirschman's model of 'voice and exit" strategies. Further the framework of Global Governance will be transferred to the traditional 5 forces model in order to detect the location of Trans-National Companies in their competitive environment. Further an additional sixth force is going to be introduced. After analyzing the competitive environment of Trans-National Companies and the impact of governmental institutions on the industry, several strategies for gaining in Global Power will be developed, using the new hybrid strategy approach as a tool. In the section of definitions (1.3), the thesis and their basic components are going to be analyzed and explained. Within the theory framework (2.1-2.4), the thesis will be set up theoretically. The case study of Gazprom as Trans-National Company will transfer the theoretical model to a practical example. Thus, Russian influence on the world market (for energy) rises, and the situation concerned Europe directly, the example chosen is very relevant and of actuality. In the end the findings will be evaluated. The unit of analysis used in the theory framework is based on the global level. That is rationale because Global Actors in general are going to form the basis of the framework. However, the topic itself implies choosing the global level as unit of analysis. The case study will concentrate on a specific firm. Here it will be switched to the firma level as unit of analysis. That makes sense, because there are only little volumes of industries that do globalize. On the other hand on the global level there is already everything globalized. Only the smallest unit of analysis fits here, because on the firm level there can be made a decision if to go global or not. Further the unit of the other player is scaled in the same small way.Inhaltsverzeichnis:Table of Contents: 1.Introduction7 1.1Research Question10 1.2Research Methods11 1.3Terms and Definitions13 1.3.1Globalization13 1.3.2Global Governance15 1.3.3Power20 1.3.4Strategy27 2.Theory Framework30 2.1Global Actors in Global Governance's Competitive Environment30 2.1.1The Role of Civil Society in Global Governance30 2.1.2The Role of International Organizations in Global Governance32 2.1.3The Role of the State in Global Governance33 2.1.4The Role of TNC in the Global Governance36 2.2Porters 5 Forces Industry Analysis of TNCs37 2.2.1Rivalry37 2.2.2Threat of Substitutes41 2.2.3Threat of New Entrants42 2.2.4Bargaining Power of Buyer and Supplier43 2.3The Government and International Organizations as Sixth Force45 2.4Elaboration of TNCs´ BP Rising Strategies52 2.4.1Self Regulatory Institutions (SRIs)54 2.4.2Privatization of the Public Sector54 2.4.3Quasi-Regulation55 2.4.4Public-Private Partnerships (PPPs)55 2.5Conclusion of Theory Framework57 3.Case Study: Gazprom61 3.1History Background of Russians Policy61 3.2Economy Background63 3.3Strategy framework64 3.3.1Gazprom and Russia64 3.3.2Gazprom and NGO´s65 3.3.3Gazprom and Europe66 4.Conclusion69 Bibliography70 Appendix72Textprobe:Textprobe: Chapter 2.2, Porters 5 Forces Industry Analysis of TNCs: Figure 11 sums up the transformation of GAs to the Porter's model. It illustrates the factors that influence the competitive environment in GG in terms of Global Power of TNCs. In the following it will be provided an analysis of the relevant forces and the competitive environment of TNCs on the GG layer in terms of GP. That analysis serves the purpose to detect the best fitting strategy for TNCs in order to increase the industry's BP. 2.2.1, Rivalry: Strong competition among rival firms decreases profits and makes the industry less attractive. However, competition is not always perfect and firms are not only price takers, but strive for a competitive advantage over their rivals, too. The intensity of rivalry is influenced by a set industry characteristics. The traditional aspects are the volume of competitors, the market growth, the aspect of the entrance cost and exit costs, the switching costs and the level of product differentiation. Rivalry will be increased by a larger number of firms, because more firms must compete for the same purpose. Rivalry even intensifies, if the firms have similar market volume and impact. When looking at the TNCs as firms, who compete for GP, there is a large number of such. In comparison, there are a lot of global player coming from different countries, representing different intentions, but only less alternatives to influence a global decision making process, or a national decision making process, that affects the world globally (demand). In fact, there are in total sum 44,000 TNCs in the world, with 280,000 subsidiaries and an annual turnover of US$ 7,000 billion. Two-thirds of world trade results from TNC production networks. The share of world GDP controlled by TNCs has grown from 17 percent in the mid-60s to 24 percent in 1984 and almost 33 percent in 1995 (UNCTAD). 51 of the world's largest economies are in fact TNCs. Continuous mergers and take-overs have created a situation in which almost every sector of the global economy is controlled by a handful of TNCs. On a whole the total volume of TNCs is rather high; however there is only little Global Power available. Due to that aspect, rivalry is high. If there is a growing market, firms are able to increase revenues simply because of the economic growth itself. A slow market growth causes firms to combat for market share and rivalry grows. Here we are talking about the market of GP in GG. The market size is only hard to measure. However it will be assumed that ongoing globalization is the factor that results in a growth in the market for assessing GP in GG. According to that argument, rivalry will be decreased within the industry of TNCs. When the majority of costs are fixed, the firm must produce near capacity to attain the lowest unit costs. Since the firm must sell a larger quantity of the product in order to benefit from economies of scale, high levels of production lead to a fight for market share and results in increased rivalry. In this case the 'product' TNCs produce is too abstract, to link it anyhow to fix or variable costs. What TNCs 'sell' is not their actual product (e.g. General Motors sells cars), but the influence they have in economy. As a result, it can be said that the more BP a TNC already has, the more influence it has, the lower costs every additional unit added. So the theory of economies of scale can be covered. However, there are no other fixed costs than the fixed costs of running the business anyhow. To sum up, it can be said that the fixed costs in the TNC´s industry are indifferent. However, there can be detected an economies of scale effect. Thus, rivalry in the existing market becomes higher. When a customer can freely switch from one product to another there is a greater struggle to capture customers. Low switching costs increase rivalry. The customer in our case is the national government (or International Organization) as GA who uses the BP of a TNC as product in order to benefit from it in terms of increasing its own GP. Switching costs may arrive when asking which TNC in detail to support. There might be done distinctions from TNCs operation industry (such as energy sector, security sector or media business). This notion leads to the argument of diversification of the product, which will be explained further. In addition here plays the linkage of the TNC an essential role; If the TNC is somehow linked to activities with other GAs. Thought, switching costs in general are assumed to be high, not at least of the lack in trust, experience, information and transparency. Therefore rivalry rises. Low levels of product differentiation leads to higher levels of rivalry. The product itself is defined to be the GB. That influence can be differentiated first in the sense of the actual product offered. Textile producer may have an other channel of influence than companies in the energy sector. It can be detected that most of the TNCs are operating in the industry of petroleum exploiter, processor and distributor (see appendix 1 and 2). What exact relationship there exists is not part of this thesis, however it will be assumed that there must be 'better preferred' industriey. The second and probably related influence measure tool is the 3 dimensions of power approach. Each industry and each TNC concentrates on a different mixture of the power dimensions in providing power. On a whole there is a high level of product differentiation, and therefore a higher level of rivalry. High exit barriers place a high cost on abandoning the product. The firm is forced to compete. High exit barriers cause a firm to remain in an industry, even when the venture is not profitable. A common exit barrier is asset specificity. When a TNC wants to exit the industry, the barriers are low. Far from it! Other competitors or GAs would pay a high price in order to take over the business. That argument leads to a slightly decrease in rivalry. To sum up, rivalry in the TNC industry is relatively high, due to the large number of competitors, scale effects, and high level of product differentiation. There also exists an approach to make rivalry measurable by indicators of industry concentration. One instrument is the Concentration Ratio (further abbreviated as CR). The CR indicates the percent of market share held by the largest (4 - 50) firms within the industry. A high CR means less competition, whereby a low CR indicates a high competitive pressure. The industry is concentrated, when a high volume of market share is held by the (4 - 50) largest firms; then the CR is high. With only a few firms holding a large market share, the competitive landscape is less competitive because it is closer to an oligopoly or to a monopoly. If the industry is characterized by many rivals from whom none of them has a significant market share, we see a low concentration ratio. Fragmented markets are more likely to be highly competitive.
The many and varied crises in the world economy since 2007 seem to have different origins and diverse manifestations. This paper contends that there is however a structural shift beneath the global economy that is now reaching a critical mass, and that accounts for many of these crises, despite the diversity of manifestations. This shift is occasioned by two kinds of technological changes--the familiar labor-saving and what is here called "labor-linking." The paper argues that these changes (1) create a short-term window of opportunity for developing and emerging economies, but (2) in the long run constitute a major, multilateral policy challenge for all. To meet this challenge, we have to think outside the box and conceive of innovative policies. The paper briefly speculates on what those policies might be.