ECONOMIC ENVIRONMENT IN GLOBAL CONTEXT TC/IS/2011/MS/144 International Trade Department of Business & Management Studies Trincomalee Campus Eastern University of Sri Lanka
ECONOMIC ENVIRONMENT IN GLOBALCONTEXT
TC/IS/2011/MS/144International Trade
Department of Business & Management StudiesTrincomalee Campus
Eastern University of Sri Lanka
International Trade
Culture
Political
Economic
Legal
Discussion Areas Important of Economic
Environment
Classification of Economies
Developed Economics
Developing Economics
Developed economies effects
Emerging Market
Important of Economic Environment
Statistics Used In Classifications Gross Domestic Product (GDP)Purchasing Power Parity (PPP)Human Development Index (HDI)
Classification of Economies
GoodsServicesValue
Gross Domestic Product
Year
Gross Domestic Product-(2015) GDP1 United States 17,947,0002 China 10,982,829
3 Japan 4,123,258
4 Germany 3,357,614
5 United Kingdom 2,849,345
6 France 2,421,560
7 India 2,185,706
8 Italy 1,815,757
9 Brazil 1,772,589
10 Canada 1,552,386
30 Austria 374,124
33 South Africa 312,957
38 Singapore 292,734
65 Sri Lanka 82,095
183 Federated States of Micronesia 318
185 Palau 287
186 Marshall Islands 183
187 Kiribati 162
188 Tuvalu 33IMF Data
(Millions of US$) (Millions of US$)
Purchasing Power Parity
Purchasing Power Parity adjusts the exchange rate
between countries to ensure that a good is purchased for the same price in the same currency.
The Big Mac Index
Purchasing Power Parity
India -59
South Africa -54
Hong Kong -50
Ukraine -47
Egypt -45
Russia -45
Taiwan -42
Mainland China -41
Malaysia -41
Sri Lanka -37
Belgium 18
Denmark 19
Italy 20
Canada 24
Uruguay 25
Brazil 29
Switzerland 63
Sweden 75
Norway 80
Venezuela 108
Israel -8
Portugal -8
United Kingdom -3
New Zealand -1
Chile 0
United States 0
Costa Rica 1
Greece 3
Austria 5
Netherlands 7
Purchasing Power Parity
Human Development Index (HDI)
which measures people’s satisfaction in three key
areas
• Long and healthy life expectancy
• Quality education equally• Standard of living
VERY HIGH HUMAN
DEVELOPMENT
1 Norway 0.944 2 Australia 0.935
3 Switzerland 0.930
4 Denmark 0.923
5 Netherlands 0.922
6 Germany 0.916
6 Ireland 0.916
8 United States 0.915
9 Canada 0.913
9 New Zealand 0.913
11 Singapore 0.912
HIGH HUMAN
DEVELOPMENT
50 Belarus 0.798
50 Russian Federation 0.798
52 Oman 0.793
52 Romania 0.793
52 Uruguay 0.793
55 Bahamas 0.790
56 Kazakhstan 0.788
57 Barbados 0.785
58 Antigua and Barbuda 0.783
59 Bulgaria 0.782
MEDIUM HUMAN
DEVELOPMENT
106 Botswana 0.698
107 Moldova (Republic of) 0.693
108 Egypt 0.690
109 Turkmenistan 0.688
110 Gabon 0.684
110 Indonesia 0.684
112 Paraguay 0.679
113 Palestine, State of 0.677
114 Uzbekistan 0.675
115 Philippines 0.668
LOW HUMAN
DEVELOPMENT
179 Mali 0.419
180 Mozambique
181 Sierra Leone 0.413
182 Guinea 0.411
183 Burkina Faso 0.402
184 Burundi 0.400
185 Chad 0.392
186 Eritrea 0.391
187Central African Republic 0.350
188 Niger 0.348
Human Development Report-2014High human development
-73 Sri Lanka 0.757
01,Life expectation
02,Literacy rate
Stages of developed countriesMDCs-More developed countries
LDCs-Less developed countries
MDCs-Least developed countries
US Canada England
Asian and Lathin America
Central Africa
Developed Countries
In essence, developed economies, also known as advanced economies, are characterized as postindustrial countries—typically with
A high per capita incomeCompetitive industries
Transparent legal and regulatory environments
Well-developed commercial infrastructure.
Developed countries also tend to have high human development index (HDI) rankings—
Long life expectanciesHigh-quality health careEqual access to educationHigh incomes
Developed economies
Identify the major developed economies
The United States European Union Spotlight on Germany Japan AustraliaNew ZealandSouth Korea
Developing Countries
Developing economies
Objectives of Developing Countries
Better educationFundamental objective -------------------- Industrialization
Improvements in moral and ethical responsibilities
Elimination of many social inequities
Better and more effective government
Privatization
Privatization
Entrepreneurship
Advance Technology Labour incentive
Capital incentive
TO or
Major Developing Economies and Regions
• Asian• The Middle East • Spotlight on the UAE• Africa • Spotlight on Nigeria
Developing Economies Facing Problems
Developed country
Developing country
Emerging Markets An emerging market is a country that has some characteristics of a developed market, but does not meet standards to be a developed market.
Features of Emerging market geographically large
Have significant populations
Represent sizable markets for a wide range of products
Have strong rates of growth or the potential for significant growth
Key Emerging Markets Asia
Spotlight on China ------04 Spotlight on India --------03
Europe Spotlight on Russia -----02Spotlight on South Africa-----05
Latin America Spotlight on Brazil -----01
According to anticipated GDP, in terms of PPP, in 2020, the top economies will be China, the U.S., India, Japan, Russia, Germany, Brazil, the U.K., France and Mexico
• Gross Domestic Product (GDP)
• Purchasing Power Parity (PPP)
• Human Development Index (HDI)
Important of Economic
EnvironmentClassification of
Economies
Developing
Countries
Emerging
Market
Objectives of Developing Countries• Better Education• Improve moral
• Eliminating Social inequity
• Government support
• Privatization• Entrepreneurship
• Technology
Developed
Countries
Summary
Vs.