scholarly journals The Macro Effect Of Foreign Capital And Aid On The Economic Growth In Malaysia

2011 ◽  
Vol 1 (9) ◽  
Author(s):  
Caroline Geetha
Keyword(s):  
Economic Growth ◽  
Foreign Aid ◽  
Multinational Corporations ◽  
Economies Of Scale ◽  
Foreign Capital ◽  
Developed Countries ◽  
Economic Interdependence ◽  
Developing Nation ◽  
The Government ◽  
The Developed Countries

Economic interdependence among nations of the world has become important and enormously complex. Foreign capital and aid is an important form of economic interdependence because they are the main components of capital formation especially for the developing nation. A significant amount of foreign capital and aid which has amounted to around $30 billion of the worlds gross domestic product, grows at an annual rate of 15 percent (higher than the economic growth rate of certain nation). Multinational corporations in search for profits in the developing nation undertake inflow and outflow of foreign capital in the form of foreign direct investment, skills and technology. This creates internal economies of scale for the parent company and external economies of scale for its subsidiaries. Overwhelming performance of foreign capital can also create external diseconomies of scale known as stunting effects for the developing nation. The government of the developed countries for political and humanitarian reasons also offers foreign aid. Foreign aid should be paired well with the stages of the economic development of a country to create increasing returns. This paper provides a critical analysis of growth in relation to foreign capital and aid in Malaysia. The analysis is divided into two sections. The first section looks at foreign capital and aid as an independent variable while the second section looks at foreign capital and aid as the dependent variable. Foreign capital is found to be positively correlated to economic growth and it is also highly significant compared to foreign aid which has no positive correlation and hardly contributes to Malaysias economic growth. Finally some policy options are recommended to improve the economic growth in Malaysia.

International Economic Assistance in the 1970's — A Critique of Partners in Development (Review Article)

1970 ◽  
Vol 10 (4) ◽  
pp. 469-490
Author(s):  
Nurul Islam
Keyword(s):  
Developing Countries ◽  
Foreign Aid ◽  
International Aid ◽  
Developed Countries ◽  
Armed Conflicts ◽  
Economic Assistance ◽  
Self Help ◽  
Service Charge ◽  
The Developed Countries ◽  
Defence Expenditure

Foreign economic aid is at the cross-roads. There is an atmosphere of gloom and disenchantment surrounding international aid in both the developed and developing countries — more so in the former than in the latter. Doubts have grown in the developed countries, especially among the conservatives in these countries, as to the effectiveness of aid in promoting economic development, the wastes and inefficiency involved in the use of aid, the adequacy of self-help on the part of the recipient countries in husbanding and mobilising their own resources for development and the dangers of getting involved, through ex¬tensive foreign-aid operations, in military or diplomatic conflicts. The waning of confidence on the part of the donors in the rationale of foreign aid has been accentuated by an increasing concern with their domestic problems as well as by the occurrence of armed conflicts among the poor, aid-recipient countries strengthened by substantial defence expenditure that diverts resources away from development. The disenchantment on the part of the recipient countries is, on the other hand, associated with the inadequacy of aid, the stop-go nature of its flow in many cases, and the intrusion of noneconomic considerations governing the allocation of aid amongst the recipient countries. There is a reaction in the developing countries against the dependence, political and eco¬nomic, which heavy reliance on foreign aid generates. The threat of the in¬creasing burden of debt-service charge haunts the developing world and brings them back to the donors for renewed assistance and/or debt rescheduling.

PENGARUH INFRASTRUKTUR SECARA SPASIAL TERHADAP KONVERGENSI PERTUMBUHAN EKONOMI DI INDONESIA

INFO ARTHA ◽  
2017 ◽  
Vol 1 ◽  
pp. 17-28
Author(s):  
Anisa Fahmi
Keyword(s):  
Economic Growth ◽  
Regional Economics ◽  
Developed Countries ◽  
Road Infrastructure ◽  
Long Run ◽  
Catch Up ◽  
The Developed Countries ◽  
Positive Effect ◽  
Neoclassical Growth Theory

Motivated by inter-regional disparities condition that occurs persistently, this study examines the Indonesian economy in the long run in order to know whether it tends to converge or diverge. This convergence is based on the Solow Neoclassical growth theory assuming the existence of diminishing returns to capital so that when the developed countries reach steady state conditions, developing countries will continuously grow up to 'catch-up' with developed countries. Based on regional economics perspective, each region can not be treated as a stand-alone unit,therefore, this study also focuses on the influence of spatial dependency and infrastructure. Economical and political situations of a region will influence policy in that region which will also have an impact to the neighboring regions. The estimation results of spatial cross-regressive model using fixed effect method consistently confirmed that the Indonesian economy in the long term will likely converge with a speed of 8.08 percent per year. Other findings are road infrastructure has a positive effect on economic growth and investment and road infrastructure are spatially showed a positive effect on economic growth. In other words, the investment and infrastructure of a region does not only affect the economic growth of that region but also to the economy of the contiguous regions. 

Foreign Trade of Russia: Barometer Foretells Storm

2016 ◽  
Vol 60 (2) ◽  
pp. 15-25
Author(s):  
V. Obolenskiy
Keyword(s):  
Foreign Trade ◽  
Large Scale ◽  
Manufacturing Industry ◽  
Import Substitution ◽  
Developed Countries ◽  
Scale Production ◽  
Goods And Services ◽  
Effective System ◽  
The Government ◽  
The Developed Countries

The development of Russian foreign trade during the previous five years is analyzed. It is stated that, in terms of value, exports of services and imports of goods and services steadily grew during the first four years of the period under review. Exports of goods also rose during three years, but in 2014 both exports and imports again fell in comparison with the previous year as was the case five years ago. The composition of the Russian exports and imports of goods did not change radically during the previous years. The main items of export are, as always, mineral products, metals and fertilizers. Import is prevailed by foodstuffs, chemicals and heavy engineering equipment. The current situation is featured by the reduction of world oil prices, slump of the domestic economy and war of sanctions with the Western countries. All this substantially impairs the conditions of Russia’s foreign trade activities and inhibits its development in the upcoming years. In the author’s view, the implementation of measures worked out by the government – correction of tariff liabilities before the WTO, redirecting of trade streams from the European to the Asian markets, import substitution and export support – will unlikely improve the situation. Revision of the liabilities before the WTO in the conditions of the decrease of the internal demand and serious devaluation of Ruble is considered as inappropriate and counterproductive. “Asiatic turn” is only capable to compensate to a certain respect the loss of supplies of some food products from Europe, but cannot fully offset the loss of potentialities of the acquisition of modern technologies and equipment from the developed countries. It is doubtful that it will be possible to dramatically cut the import dependence. It is necessary to replace many kinds of foreign goods, but it is impossible to implement a frontal substitution of import in all directions. Excessive stress on the import substitution might lead to the emergence of shortages and poorer availability of some goods at the internal market and, at the worst, to self-isolation and economic autarky. The attempts to build up an effective system of export support might be successful only in the conditions of the establishment of the large-scale production of goods and services which would be comparable with the foreign analogues in respect to the criteria of price and quality. Taking this into consideration the technological renovation of production processes, first of all in the manufacturing industry, and on this basis rising up of the competitiveness of plants and factories are the most important prerequisites for encouraging export activities and formation of the new export specialization of the country.

scholarly journals Vietnam’s Trade Policy: A Developing Nation Assessment

10.31355/9 ◽  
2017 ◽  
Vol 1 ◽  
pp. 013-037 ◽  
Author(s):  
Steven J Clarke ◽  
Mohammamadreza Akbari ◽  
Dr Shagheyegh Maleki Far
Keyword(s):  
Economic Growth ◽  
Economic Development ◽  
Trade Policy ◽  
Foreign Aid ◽  
Strategic Plan ◽  
The Body ◽  
Development Theory ◽  
Trade Patterns ◽  
Strategic Development ◽  
Developing Nation

NOTE: THIS ARTICLE WAS PUBLISHED WITH THE INFORMING SCIENCE INSTITUTE. Aim/Purpose................................................................................................................................................................................................... This paper is a review of the progress of the Vietnam socio-economic and development plan and an assessment of the extent to which Vietnam is putting in place the critical social and economic development structures that will enable it to reach the status of “developed nation” in the time set (2020) by its national strategic plan. The research will identify and review trade patterns, trade policy and the effect of foreign aid on Vietnam’s plan to transform its economy and society from a developing nation status to status of developed nation. The overriding question stands as “is” Vietnam effectively moving towards developed nation status soon”? Background................................................................................................................................................................................................... This paper examines the history of Vietnam from the command economy in its transition to a market driven economy, the criteria, hurdles and challenges as the country moves towards a developed country status. Methodology................................................................................................................................................................................................... Applied research based on the body of research in socio-economic development theory, international trade and market theory. The review is conducted by collecting and analyzing data on foreign trade, foreign aid, business and general economic growth, development and social wellbeing. It identifies and appraises the trade patterns, trade effects, socio-economic policies and the effect of foreign aid] on the economic growth and the progress of the country towards becoming a developed nation state. Contribution................................................................................................................................................................................................... The findings will assist academic, business and government researchers, policy and decision makers engaged developing Vietnam’s trade policies and strategic plan for its it future growth and economic progress towards a developed nation status. The paper will also provide additional insight into the business and market structure and environment in Vietnam and the role it plays aiding its growth and development. Findings.......................................................................................................................................................................................................... Vietnam has experienced significant progress to date based on conventional developed nation criteria. However, there is an ongoing need for continued assertive governmental application of geo-economic and geopolitical policies focusing on sustainable, comprehensive, and vital social, cultural and economic growth. Recommendations for Practitioners................................................................................................................................................................ Specific policies and strategies for government and business reforms in Vietnam must focus on, 1. Replacing the projected benefits in growth utilizing accomplishments to date from negotiations and strategic development of the TPP, in-spite of current delays or withdrawal. 2. Continuing use of US financial aid and ODA sources to enhance HDI and support Vietnam’s commercial and social opportunities 3. Continued industrial zone development 4. Continued human labor improvements 5. Continued export expansion programs 6. Continued close working relationship with the WTO 7. Continued development strategies including SEDS, SEDPs, and FTAs Recommendation for Researchers................................................................................................................................................................ Researchers, when collecting economic and social data, need to [adhere to World Trade Standards data collection, measurement, classification, and estimation of trading data: for example,] precisely define, and determine the validity, accuracy, expected bias and relevant statistics and classification methods used by government agencies and international organizations. Impact on Society........................................................................................................................................................................................... Vietnam’s drive towards developed nation status will enhance the quality of life for a greater number of its citizens. Future Research................................................................................................................................................................................................ Future researchers ought to focus on specific elements of HDI and forms of foreign aid support for long-term economic and social development, and enhancing governmental reform of its dynamic and strategic development potential.

The Impact of Population Aging on Economic Growth: Panel Data Evidence from Middle East Countries

2021 ◽  
pp. 67-86
Author(s):  
Abdullah Abdulaziz Bawazir ◽  
Mohamed Aslam ◽  
Ahmad Farid Osman
Keyword(s):  
Economic Growth ◽  
Panel Data ◽  
Middle East ◽  
Fixed Effects ◽  
Population Aging ◽  
Developed Countries ◽  
Ordinary Least Squares ◽  
Dependency Ratio ◽  
Middle East Countries ◽  
The Developed Countries

This study examines the relationship between population aging and economic growth in a panel of 10 selected Middle East countries for the period of 1996–2016. For this purpose, this study uses two different measures of population aging, namely population aged 65 and over and old dependency ratio, to investigate their impacts on economic growth. The study utilizes the three alternative models of static panel data comprised of the pooled ordinary least squares, random effects, and fixed effects. The results of the robust fixed effects model indicate that the population aged 65 and over and the old dependency ratio have a positive effect on economic growth. The finding supports the argument indicating that an aging population does not necessarily adversely affect economic growth in the developing countries as it does in the developed countries. Therefore, the elderly population is not a matter of concern for the Middle East and the mechanisms through which the effect can take place are savings behavior and human capital accumulation of the individuals.

Global Trends in Domestic savings and Longevity- Implications for India

2021 ◽  
pp. 111-118
Author(s):  
Thilak Venkatesan ◽  
Venkataraman R
Keyword(s):  
Economic Growth ◽  
Developed Countries ◽  
The Other ◽  
Demographic Dividend ◽  
Policy Action ◽  
Global Trends ◽  
Domestic Savings ◽  
The Developed Countries ◽  
Developed Nations ◽  
The Relationship

Demographic dividend and the lowest median age among the earning population propels consumption and growth in India. Among the emerging economies, China had the leverage for growth through exports until 2008. India benefited by demographic dividend and this translates to providing income and thereby increases savings. On the other hand, the developed countries are experiencing problems of an aging economy, a deflationary scenario, and a pension burden. India, with its major workforce in the unorganized and private sector, needs to recognize the need for forward-looking policies that stimulate savings for a better lifestyle post-retirement. The study was focussed on the relationship between longevity (life expectancy), and domestic savings. The research observed divergence between the developed nations and India. A more futuristic policy action is suggested to motivate savings as the increase in population and higher levels of economic growth can be achieved with more domestic savings.

Political regimes and foreign aid effectiveness in Ghana

2019 ◽  
Vol 18 (1) ◽  
pp. 15-33 ◽  
Author(s):  
Vincent Konadu Tawiah ◽  
Evans John Barnes ◽  
Prince Acheampong ◽  
Ofori Yaw
Keyword(s):  
Economic Growth ◽  
Foreign Aid ◽  
Political Ideology ◽  
Aid Effectiveness ◽  
Political Agenda ◽  
Annual Data ◽  
Political Regimes ◽  
Data Set ◽  
Content Type ◽  
The Government

Purpose This paper has examined the effectiveness of foreign aid on Ghanaian economy under different political regimes. Design/methodology/approach Using vector error correction and co-integration models on the annual data set over a period of 35 years, the authors demonstrate that foreign aid has had varied impacts on economic growth depending on the political ideology of the government in power. Findings With capitalist political philosophy, foreign aid improves private sector growth through infrastructural development. On the other hand, a government with socialist philosophy applies most of its foreign aid in direct social interventions with the view of improving human capital. Thus, each political party is likely to seek foreign aid/grant that will support its political agenda. Overall, the results show that foreign aid has a positive impact on the growth of the Ghanaian economy when there is good macroeconomic environment. Practical implications This implies that the country experiences economic growth when there are sound economic policies to apply foreign aid. Originality/value The practical implication of the findings of this paper is that donor countries and agencies should consider the philosophy of the government in power while granting aid to recipient countries, especially in Africa. The results are robust to different proxies and models.

scholarly journals Income Inequality and Economic Growth: An Analysis Using a Panel Data

2018 ◽  
Vol 10 (5) ◽  
pp. 242
Author(s):  
Mohamed Bouincha ◽  
Mohamed Karim
Keyword(s):  
Economic Growth ◽  
Income Inequality ◽  
Developed Countries ◽  
Global Model ◽  
Kuznets Curve ◽  
Main Indicator ◽  
Development Indicator ◽  
Long Time ◽  
The Developed Countries ◽  
The Relationship

A long time ago, economic growth was the main indicator of countries’ economic health. However, since the 1970s, the analysis of the relationship between economic growth and other economic phenomena such as inequality has begun to grow (Sundrum, 1974). Much of the literature on the link between economic growth and income inequality is based on Kuznets revolutionary theory. The purpose of our article is to suspect the causality relationship between growth and inequality. To do this, we used data from 189 countries for the period between 1990 and 2015. We estimated a global model and three other of each category of countries in terms of development. In the global model, economic growth is insignificant even if its sign is positive. The same result appears in the developing country model and the moderately developed countries one. However, in the developed countries model, economic growth is negatively and statistically related to inequality. The Kuznets curve is approved in our study only when using human development indicator in the place of growth. Growth explain inequality’s movement in our study only in the model of developed countries and its coefficient is negative.

The economic and institutional determinants of the ‘New Economy’ in transition economies

2003 ◽  
Vol 53 (1) ◽  
pp. 1-27 ◽  
Author(s):  
M. Piatkowski
Keyword(s):  
Economic Growth ◽  
Information And Communication Technologies ◽  
Transition Economies ◽  
New Economy ◽  
Communication Technologies ◽  
Developed Countries ◽  
Catching Up ◽  
Institutional Determinants ◽  
Information And Communication ◽  
The Developed Countries

The contribution of the so-called ‘New Economy’ to economic growth in developing countries has so far been minimal. Nonetheless, in the longer run the ‘New Economy’ offers great potential for faster economic growth in post-socialist economies. Realising this potential is, however, not automatic. It could be left unharnessed if there is no suitable institutional and economic infrastructure that would allow for adoption, diffusion, and productive use of information and communication technologies (ICT). The paper here will construct a New Economy Indicator (NEI) that measures the levels of preparedness of transition economies for harnessing the potential of ICT to accelerate long-term economic growth and a catching-up with the developed countries. In the NEI ranking Slovenia scored highest; it is followed by the Czech Republic and Hungary. Albania, Bosnia and Herzegovina, and Serbia–Montenegro (former Yugoslavia) occupy the bottom of the table.

Financial Liberalization, Crises, and Economic Growth

2008 ◽  
Vol 7 (1) ◽  
pp. 106-115
Author(s):  
Inkoo Lee ◽  
Jong-Hyup Shin
Keyword(s):  
Economic Growth ◽  
Interest Rates ◽  
Financial Liberalization ◽  
Probit Model ◽  
Developed Countries ◽  
Sample Group ◽  
Panel Model ◽  
Catching Up ◽  
Nominal Interest Rates ◽  
The Developed Countries

The paper computes the effect of financial liberalization on economic growth by combining the results of a panel model with those of a probit model. It finds a positive net effect from financial liberalization to growth. Surprisingly, we find that the net effect on growth is larger in the crisis-experienced country group than in the overall sample group. Our guess is that the crisis-experienced countries are mostly developing countries that usually enjoy higher growth rates than the developed countries because of the catching-up phenomenon. The paper also studies the link between financial liberalization and nominal interest rates, and finds, contrary to expectations, that the direct liberalization effect is positive. Our guess is that this reflected the overshooting of interest rates after crises.

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