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Globalization and Investment Strategies

How does globalization affect investment strategies of the G8 countries? Please provide references.

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Please see response attached, some of which is presented below.

RESPONSE:

Globalization impacts investment strategy choices mainly through a change in focus, considering aspects of globalization that need to be considered in the investment strategies. For example:

1. Support debt reduction strategy

For example, G8 countries are reported as be supportive of debt reduction, which paves the way for MNC to enter developing countries. For example, the debt "habit" is a cycle of lenders "pushing" loans on borrowers and turning a blind eye to their misuse, and in response to criticism for their behaviour, adding more conditions to new lending. These conditions sometimes seem (and indeed sometimes are) sensible, but all too often they only serve the interests of the lenders rather than the borrowers. Part of the cycle is that as countries get deeper in debt and grow more impoverished as they try to repay, the lenders impose a whole new range of what they say are anti-poverty and anti-corruption conditions, but which most often have other agendas, such as opening up poor countries to multi-national companies. Even when the conditions are sensible, they are like the health warnings on cigarette packets ? they are there to satisfy the critics, but the cigarette makers hope to counteract them through ever more aggressive advertising. http://www.globalissues.org/TradeRelated/Debt/Pressure.asp (see full report in extra reading section at the end of this response).

Now let's look at some of the investment strategies that are impacted by globalization as reported by the G7 Finance Ministers and Central Bank Governors (2006).

2. Other Investment Strategies

For example, G7/8 meeting suggest many investment strategies related to globalization. One strategy is to resolutely reaffirm that openness and globalization are beneficial in promoting economic prosperity and reducing poverty. These benefits are most effectively realized with sound economic management and supportive policies for those whose welfare is adversely affected.

Another investment strategy is to be committed to the following:

? Strengthen economic policies in our countries;
? Work together to remove distortions to the global adjustment process;
? Resist protectionism and
? Promote liberalization of trade ...

Solution Summary

This solution examines how globalization affects investment strategies of the G8 countries. References are provided.

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