|
Arabic
Bengali
Chinese
English
French
German
Hebrew
Hindi
Italian
Japanese
Korean
Malay
Polish
Portuguese
Spanish
Turkish
Ukrainian
Vietnamese|
Lecture notes, cheat sheets
World economy. Cheat sheet: briefly, the most important
Directory / Lecture notes, cheat sheets Table of contents
1. World trade Foreign trade occupies an important place in the system of international economic relations. For many countries in recent years, it has become a major factor in economic development. The wide exchange of goods between countries as a result of the growth of foreign trade creates conditions for the development of the world market as a whole. The modern world market is a sphere of exchange that covers the total commodity circulation of various countries that are its constituent elements. The growth of world trade is due to a number of reasons: - development of national markets for goods and services; - uneven development of individual industries within national economies; - the tendency to constantly expand production in order to make a profit. The desire for profit and the relatively narrow scope of national markets force corporations and individual enterprises to look for sources of sales in foreign markets. Industrial countries need markets for manufactured goods, equipment, and new technologies. Developing countries need new markets for raw materials and agricultural products. In modern conditions, individual countries have become links in the world economy, and their economies have become heavily dependent on the external market. This is especially true for the economies of developing countries. This feature is connected with the fact that for a long time these countries developed as agrarian and raw material appendages of the industrial countries of the West. Therefore, developing countries for the most part have a weak industrial base and depend on industrialized countries. The growing dependence of countries on foreign trade and foreign markets reflects an objectively operating trend towards economic convergence of various states. This was reflected in the creation of various trade unions, associations, in the development of integration processes in Western Europe, Asia, America and Africa during the second half of the twentieth century. 2. Factors in the development of international trade Foreign trade originated in ancient times. A powerful stimulus for the development of international trade was the transition from a subsistence economy to commodity-money relations, as well as the creation of national states, the establishment of industrial relations both within countries and between them. The creation of large-scale industry made it possible to make a qualitative leap in the development of productive forces in international trade. This led to an increase in the scale of production and an improvement in the transportation of goods, that is, the prerequisites were created for expanding economic and trade relations between countries, and at the same time increased the need to expand international trade. At the present stage, international trade is the most developed form of international economic relations. The need for it is due to the following factors: - the formation of a world market as one of the prerequisites for the capitalist mode of production; - uneven development of individual industries in different countries, as a result of which excess products are exported abroad; - the limited size of the domestic market of a single country. Consequently, the interest of individual countries in expanding their international relations is explained by the need to sell products in foreign markets, the need to obtain certain goods from outside, as well as the desire to extract higher profits due to the use of cheap labor and raw materials from developing countries. A feature of the development of international trade after the Second World War is the rapid growth of its volumes. The following factors contributed to this: - scientific and technological revolution, which stimulated the renewal and expansion of fixed production capital; - strengthening state regulation of the economy in order to intensify the processes of capital accumulation and prevent economic crises; - an increase in the economic power of individual industrial enterprises and large transnational companies; - economic integration within certain groups of countries. 3. Distinctive features of the global market The world market should be distinguished from the national markets of individual countries. The world market covers the trade of a significant part of the countries of the world and has the following features. 1. In the national market, the movement of goods is conditioned by such factors as industrial relations between enterprises and regions of the country; interstate borders and the foreign economic policy of individual countries have a significant impact on the world market. 2. A distinctive feature of the world market is the existence of a special pricing system - the system of world prices. 3. The world market for goods is complemented by a rapidly growing market for services. 4. The structure and direction of trade of individual countries in the world market are determined by the change in the competitiveness of their goods. 5. World trade is characterized by uneven growth of trade both between individual countries and the entire world trade turnover. The global market is developing in a highly competitive environment. An active role in it is played by those states that not only carry out measures to protect the national market from the importation of goods from outside, but also pursue a policy aimed at stimulating the export of their goods. A feature of the world market at present is the development of interstate forms of its regulation. International trade is characterized by the development of integration processes both at the regional and global levels. The result is an increase in the scale and qualitative changes in the nature of international trade, which has a huge impact on the internationalization of the economic life of all countries of the world. Thanks to this, the function of international trade has changed: from purely commercial short-term transactions, it has become the main means of directly servicing national production processes, linking them into a single mechanism that does not recognize national borders. 4. Factors determining participation in foreign economic activity For enterprises engaged in foreign economic activity, it is important to take into account the following factors. When deciding whether to enter a foreign market, it is necessary to determine the company's export potential or the need to import goods based on a comprehensive analysis and marketing assessment of the relevant market. In particular, export opportunities depend on the competitiveness of a resident enterprise in comparison with non-resident firms. As a result of this analysis, the strengths and weaknesses of the exporting enterprise are revealed. It should also be taken into account that each country is characterized by the presence of a certain economic structure. According to this criterion, all countries are divided into four main groups: 1. Countries with a subsistence economy, where the vast majority of the population is engaged in the simplest agricultural production. At the same time, most of the output is consumed, and the rest is directly exchanged for simple goods and services. 2. Exporters of raw materials, i.e., countries that have significant reserves of one or more types of natural resources and receive most of the funds from their exports. 3. Developing countries in which the manufacturing industry produces from 10 to 20% of the gross national product. Accordingly, imports of raw materials are increasing in these countries, while imports of finished products are decreasing. 4. Industrialized countries are the main exporters of manufactured goods in exchange for raw materials and semi-finished products. When establishing business relations with a particular country, the following factors are taken into account: 1. The economic policy of the state (the presence or absence of restrictions on the conduct of import-export operations, the existence of conditions for attracting foreign capital, features of tax regulation, etc.). 2. Political stability. A non-resident company must be sure that a change in government or political course will not lead to the confiscation of the property of a non-resident, the introduction of import quotas or new customs and tax payments, or other adverse consequences. 3. The presence of currency restrictions and the risk of sharp fluctuations in exchange rates. 4. The state of the market infrastructure and the availability of relevant market institutions. 5. International economic exchange and the theory of comparative costs Since the beginning of the industrial revolution, the interconnection of national economies within the framework of the world economy has been constantly increasing. With the development of large-scale machine industry, the increase in the scale of production, the deepening of specialization in industry itself, it became impossible to produce an ever-increasing range of products within the framework of the economies of individual countries. The further development of the productive forces led to a trend towards a deepening of the international division of labor. Each country has a certain amount of natural wealth, the historically accumulated intellect of people (knowledge, skills, experience). The first argument in favor of the exchange of results of economic activity between countries will be the difference in the conditions of production. The second argument in favor of the exchange is the costs of production, since the costs of producing a particular product in different countries are not the same. D. Ricardo, within the framework of his theory of comparative costs, showed how all participants in international economic relations benefit for themselves and contribute to the growth of the efficiency of the use of productive forces on the scale of the world economy. The value of the theory of comparative costs lies in the fact that it provides a basis for understanding the essence of the international division of labor and international exchange. The principle of comparative costs is valid not only for any two countries, but also for any number of goods and countries. The theory of comparative costs proceeded from national differences in cost due to labor costs. The transition at the end of the XNUMXth and beginning of the XNUMXth century to monopoly capitalism was marked by the emergence of a global economic system, which is characterized by a number of new features: a joint-stock form of economic management has developed; the export of capital and the expanded exchange between countries were accompanied by the internationalization of economic relations; international monopolies arose, and on their basis, in the final analysis, there was a division of the world economic space. 6. The system of international division of labor and cooperation In the process of competition between countries, a system of international division of labor has developed, which finds expression in the sustainable production of certain goods and services in individual countries in excess of domestic needs based on the international market and is manifested in the isolation of certain types of labor activity by territory. The international division of labor is based on international specialization, which implies a spatial gap either between individual stages of production, or between production and consumption on an international scale. International specialization is a prerequisite for international cooperative production. It is a necessary condition for the establishment of highly specialized production and the implementation of large-scale projects, which are often not feasible by the efforts of one country. The indicators of participation in the international division of labor are: the volume of foreign trade in relation to the gross product; the share of exported products in the total volume of production; the share of the country in international trade, including trade in certain goods; foreign trade turnover per capita. Cooperation in international trade comes down to pre-agreed deliveries of goods and services between the countries participating in such cooperation. International cooperative deliveries reach more than 30% of the trade turnover between companies in industrialized countries. Cooperative deliveries also play a significant role in the exports of a number of developing countries with a high share of international production in certain industries. The growth of specialization and cooperation in the modern period is facilitated by many factors and conditions, primarily related to the development of scientific and technological progress. Modern technology and production make it unprofitable to provide the needs of one country with all types of products and services on its own without an international division of labor. 7. International specialization Along with the trend towards the development of the world market based on the division of labor, international specialization continues to operate, the essence of which is that individual countries specialize in the production of some specific goods and services. This specialization is explained by traditions, the specifics of production and economic potential, the presence or absence of natural resources. Specialization allows individual countries not to spend huge financial resources on the creation of new industries for the production of certain goods, but to receive them through foreign trade. This is due to the fact that each country has a long professional experience in the production of certain high-quality goods, which allows them to be exported to other countries. The system of international specialization was most developed in the second half of the twentieth century. This process was facilitated, first of all, by the economic and political development of individual countries, the scientific and technological revolution, the further development of the world market, and the policy of state regulation of the economy. As a result of the development of international specialization, countries have been divided into three main groups: 1. Countries producing manufactured products. 2. Countries focused on mining. 3. Countries specializing in the production and sale of agricultural products. At the same time, there is a fourth group of countries that simultaneously produce products of manufacturing, mining and agriculture. These include a number of industrialized countries, primarily the United States and Canada. The development and deepening of international specialization on the basis of the division of labor relieves many countries of the need to develop all branches of production and makes it possible to concentrate efforts and specialize in the production of certain types of products. At the same time, it excludes the possibility of forming a monocultural structure of the economy, since it presupposes the creation in each country of a rational economic complex of interconnected and complementary branches of the national economy. 8. Factors of international specialization of labor The process of formation of international specialization in the production of goods and services is determined by the action of a number of factors: - existing and potential production capacities, labor resources, opportunities for growth in the number and qualifications of personnel in a particular country; - the level of national income, the prospects for its increase, the capacity of the domestic market; - natural resources and soil and climatic conditions; - the geographical position of the country in relation to other countries, the presence of a developed transport infrastructure; - the existing economic ties between the countries, the possibilities of their further expansion and diversification. At the same time, those countries are in the best position, which are characterized by the action of all these factors, which allows them to participate in the international division of labor and specialization in a more balanced way. Over the past 20-30 years, the main functions of organizing the international division of labor and international specialization have been taken over by large transnational corporations. Having national headquarters and production within their countries, transnational companies also have a huge production, financial, technical potential in other countries. The activities of international corporations directly determine the degree of participation of individual countries in the global division of labor and international trade. It should be noted that international specialization and division of labor are not limited exclusively to the production of goods and services. They are much broader and cover the scope of the capital market, financial services, and the securities market. The main role in these markets is played by the largest transnational financial institutions (commercial and investment banks, insurance companies, private pension, investment companies and funds). These companies provide the main turnover of credit resources, securities, financial services, insurance and freight on the world market. 9. Main indicators of the development of the world economy To analyze the economic situation in the world, a number of indicators characterizing the dynamics and state of the world economy are used. The main one is the gross world product. This indicator expresses the total volume of final goods and services produced on the territory of all countries of the world, regardless of the nationality of the enterprises operating there in a certain period of time. Accounting for final products provides for the exclusion of repeated counting of raw materials, semi-finished products, other materials, fuel, electricity and services used in the process of its production. In each individual country, the gross domestic product is calculated on the basis of the system of national accounts, built on the concept of the productive nature of all activities. It is a set of internationally recognized rules for accounting for economic activity and reflects the main macroeconomic relations of the internal and external sectors of national economies. Related to GDP is national income, which is calculated as GDP minus depreciation (net GDP), minus indirect taxes, and plus subsidies. The indicator of national income roughly corresponds to the concept of national income produced. The amount of income at the disposal of the country (national personal income) is calculated as the difference between the net domestic product and the balance of income of enterprises and citizens of this country abroad and the income of foreigners in this country. This figure roughly corresponds to the concept of used national income. In quantitative terms, the difference between GDP and produced national income is quite large and amounts to approximately 8-11%, equal to the amount of depreciation. In different countries, this difference may fluctuate, since the amount of depreciation depends on the national mass of fixed assets. The share of depreciation increases slightly during periods of recession and decreases during periods of recovery. 10. National wealth National wealth is the totality of resources and other property of the country, which creates the possibility of producing goods, providing services and ensuring people's lives. It consists of: - irreproducible property: agricultural and non-agricultural land; minerals; historical and artistic monuments, works; - reproducible property: production assets (fixed and working capital); non-productive assets (property and stocks of households and non-profit organizations); - intangible property: intellectual property (patents, trademarks, copyrights, etc.); human capital (products of the service sector, embodied in the knowledge, professional skills and health of the population, as well as in the effective institutional structure of society); - balance of property obligations and claims in relation to foreign countries. In theoretical terms, the main features of the indicator of national wealth are that it: - all economic benefits available in the country as of a certain date are taken into account, and not created for a certain period; - a significant part is made up of natural goods (land, minerals, etc.) that are not the result of human economic activity. Despite the "non-man-made" nature of these riches, their value is associated with the level of economic development, and this relationship is very complex; - only with the help of the indicator of national wealth is an attempt made to comprehensively take into account intangible property. In practice, the actual calculation of national wealth is not carried out in any country in the world. This is due to the fact that the valuation of non-reproducible property, as well as the valuation of intangible assets, is associated with very significant difficulties. In this regard, real estimates of national wealth usually take into account only those of its components, the value of which can be determined on the basis of economic practice. 11. Sources of savings and savings in the economy The total amount of savings in the economy is formed at the expense of savings and savings carried out by households, enterprises and the state. In the total amount of savings, the share of companies is about 50% of national savings. Companies have two sources of capital investment and savings: depreciation and retained earnings. In the structure of companies' accumulation, the share of expenses for the replacement of consumed fixed capital (depreciation) is quite stable, and on average it makes up a little more than half of investments, increasing during crises and decreasing during economic upswings. Acting as one of the most important means of renewing fixed capital, depreciation creates opportunities for expanding production and increasing real capital. Net capital investments formed from retained earnings directly increase the production assets of companies. Household savings provide less than 50% of national savings. In industrialized countries, they tend to decrease due to easier access to consumer credit. The savings of states also play a significant role in the total volume of savings. State investments play a major role in financing socially significant projects (in the construction, social sphere, etc.). At the same time, the budget policy of the vast majority of countries is characterized by the presence of budget deficits, which have a general downward trend in recent decades. A sharp increase in budget deficits against the background of the economic crisis occurred in the 70s. XX century due to the increase in spending on military purposes, social security while reducing business activity and taxation. Reducing budget deficits leads to a decrease in public investment if the decrease in borrowing comes at the expense of a decrease in investment. Restraining public investment helps to reduce budget deficits in the same way that increases tax revenue or reduces military spending. 12. Savings and accumulation in the world economy The quantitative expansion and qualitative improvement of the material productive forces are the necessary conditions for the economic and social progress of the world community. The gigantic scale of world production activity requires huge investments of capital, which is the leading factor in economic development. Its physical increase, accumulation occurs as a result of savings carried out by companies, households and the state. The lack of domestic savings is made up for by the entry of companies and states into foreign capital markets. Savings is the difference between disposable income and expenses. Capital investments mean the maintenance and increase of production and non-production assets, as well as an increase in inventories. Savings and investment are inextricably linked. Savings usually precede accumulation and represent the formation of money capital, an important role in the formation of which is played by credit institutions. Changes in the dynamics of world capital investment correspond to the movement of the business cycle: they increase during periods of upswing and decrease during downturns. At the level of the world economy as a single system, the volumes of savings and savings coincide. Capital investments that are not backed by the investors' own savings are funded by the savings of other sectors. Therefore, any increase in the rate of world investment is ensured by the redistribution of income of the private sector or governments from consumption in favor of accumulation. At the national level, savings and investment differ. If the desired level of investment in a country exceeds domestic savings, then foreign savings can be used to cover this gap. The transfer of funds is carried out through the international financial system, as a result, the country can spend more money on consumption and accumulation than the national income allows. 13. International trade and foreign economic relations International trade is the exchange of goods and services between countries. Goods imported into a country form its imports, and goods exported form its exports. The sum of imports and exports of each country is its foreign trade turnover. The difference between total imports and exports is called the trade balance. It can be active and passive. In case of a negative balance, the debtor country is obliged to repay the debt to other countries in cash or by supplying additional products, or to receive a loan from the supplier country. The degree of inclusion of the country in foreign economic relations is characterized by the ratio of the value of exports to the value of the gross domestic product. An increase in export orders means an increase in employment and income, and an increase in imports is tantamount in effect to an increase in savings, as money flows abroad and overall demand decreases. Since the national economies of all countries depend to some extent on foreign trade, the state legislates certain rules and conditions of foreign trade policy. Historically, there have been two approaches to such a policy: protectionism and free trade. Protectionism is a system of import restrictions that includes the imposition of high customs duties, import bans on certain products, and other measures that prevent imported goods from competing with local production. The policy of protectionism, on the one hand, protects the national industry and agriculture, promotes the development of social production. On the other hand, it removes the national economy from fierce competition, weakens incentives to reduce production costs and improve its quality. Free trade is a foreign trade policy that does not impose any quantitative or other restrictions on foreign trade turnover. Such a policy can be pursued only by countries with high efficiency of the national economy. In practice, all states strive to pursue a balanced foreign trade policy, avoiding both excessive protectionism and absolute liberalism. 14. Evolution of foreign trade policy Foreign trade policy is a system of measures aimed at protecting the domestic market or stimulating the growth of foreign trade, changing its structure and directions of commodity flows. There are two main models of foreign trade policy: protectionism and free trade (liberalism). Different stages of world economic development were characterized by the prevalence of one of these models of foreign trade policy. During the period of primitive accumulation of capital, the typical system of foreign trade policy was protectionism. By high import duties on industrial goods, domestic industry was protected from foreign competition, and entrepreneurs accelerated the accumulation of capital. During this period, protectionism played a progressive role, contributing to the rapid growth of industry and the development of the economy as a whole. After the industrial revolution, England became the "industrial workshop of the world" and could not be afraid of foreign competition. This prompted the British industrialists to abandon protectionism and move towards free trade. Following England in the 50s and 60s. In the nineteenth century, the turn from protectionism to free trade began to take place in other countries. At the beginning of the XNUMXth century, foreign trade policy changed significantly: its typical form again became protectionism, which has a different character and meaning. Goods were subject to high duties, not because their production in a given country is underdeveloped, but in order to prevent foreign goods from entering the domestic market and to ensure support for their industry and monopoly high prices. After the Second World War, the evolution of foreign trade policy took place under the influence of the growing internationalization of economic life in the conditions of the scientific and technological revolution, the liberalization of markets, and the increasing role of international exchange as the most important factor in the development of productive forces. 15. Protectionism Protectionism is the deliberate policy of some governments to raise barriers to trade, such as tariffs and quotas, in order to protect domestic industries from foreign competition. Within the framework of the protectionist policy, it is assumed that the protection of certain sectors of the domestic economy is necessary for a certain period in order to promote an organized restructuring of production. However, there is a danger that such protection will become permanent if it serves the interests of business or political interests. The most popular argument for protectionism is the young industry argument. Protectionism can be an effective means of stimulating the development of a new industry that can significantly increase the welfare of the country, but which will not be able to develop if it is not protected from import competition. Over time, given adequate protection, such an industry is able to achieve internal economies of scale (i.e., lower costs due to the exploitation of a large domestic market) and benefit from various positive externalities (a well-trained workforce or learning-by-production effects). Ultimately, the new industry may become equal or even more efficient than its foreign competitors. Once an industry has become competitive, protectionist measures against it can be lifted. Such temporary protection does not conflict with the free trader's main goal of maximum specialization based on comparative advantage. Only with the help of temporary equality of conditions of competition can the industry reach the stage of development that will allow it to fully use its potential. The downside of protecting new industries with protectionist measures is the fact that industries in need of guardianship are often chosen not on the basis of comparative advantage but on political grounds. At the same time, the protection provided may be excessive and last longer than necessary. 16. Modern features of the process of liberalization of world trade In the modern practice of regulating international exchange, there is an objective need to increase the degree of internationalization of production and capital. This trend in the field of international economic relations is expressed, in particular, in the easing of restrictions on foreign trade exchange, the desire to remove obstacles in its path. This course corresponds to the policy of trade liberalization, i.e., the application of the whole range of measures to regulate the domestic economy and foreign economic relations in order to promote foreign trade turnover, as well as reduce customs and other barriers. The modern mechanism of world trade liberalization has a number of features. 1. Significantly expanded the range of regulatory measures on the part of both national states and supranational economic organizations. These measures have gone beyond the tariff policy and cover almost all branches of economic life. 2. The role of concerted international actions, coordinated efforts of various countries for the multilateral liberalization of foreign trade turnover has significantly increased. 3. Despite the fact that "trade wars" still flare up between individual countries, a long-term and significant reduction in economic barriers to the development of international trade has now been achieved. It should be noted that the intensification of international exchange has led to an objective need for its liberalization. Moreover, liberalization is not so much a prerequisite as a means of expanding trade. Trade liberalization has been one of the main reasons for the extraordinary economic growth that has been recorded in all countries of the world since the end of World War II. Thus, the trend towards liberalization is due to the solution of the problems of expanding world economic relations in the context of the internationalization of production. It is needed for economic cooperation in the interests of mutual benefit through a more efficient use of the resources of the world economy. 17. Liberalization of customs barriers The main successes of the liberalization policy were achieved in the field of customs duties, the general level of which decreased significantly in the period after the Second World War. The importance of customs barriers is explained by the following reasons: - historically, customs duties personify the regulatory function of the state in foreign trade, and their level is the main criterion for trade and economic policy; - customs duties play the most significant role against the background of other foreign trade barriers; - customs tariffs serve as the main unified element of the trade policy of all countries. These features of customs duties largely determined the forms of agreed international measures to liberalize trade and mutually reduce customs barriers. As a result of the operation of the most favored nation principle as one of the basic norms of the world trade policy of the XNUMXth century, the provision of mutual customs concessions by the two countries means the extension of these benefits to all their foreign trade partners. The nature of customs tariffs determines their liberalization on a broad international basis. Related to this is the creation of an appropriate international institution - the World Trade Organization, through which multilateral negotiations are taking place on lowering foreign trade barriers, and primarily customs duties. The legal mechanism of the WTO was based on the following principles and norms: - non-discrimination in trade, i.e. equalization of the rights of imported and domestically produced goods in relation to internal taxes and fees, as well as in relation to the rules governing internal trade; - use predominantly tariff means of protecting the national market, rather than quantitative restrictions or similar measures; - progressive reduction of customs tariffs in the course of periodic rounds of multilateral trade negotiations; - reciprocity in granting trade and political concessions; - resolution of trade disputes through consultations and negotiations. 18. The concept of an open economy The openness of the economy is usually considered in functional and institutional aspects. The functional approach determines the degree of the country's involvement in the international division of labor or the dependence of national reproduction on foreign economic relations. In practice, functional openness is most often assessed by the ratio of exports and imports to the country's GDP. Institutional openness is measured by the level of liberalization of a country's trade and currency regimes. The value of trade subsidies, indirect taxes, currency, licensing and other restrictions is taken into account. An open economy is understood as such an economy, the direction of development of which is determined by the trends in the world economy. It is believed that foreign trade turnover begins to have a stimulating or inhibitory effect on the national economy from the moment when it reaches a level of about 25% of the gross domestic product. Another criterion for the open nature of the economy is the coefficient of elasticity of foreign trade turnover in relation to GDP. The income elasticity of demand for imports indicates how much imports increase if GDP increases by 1%. The coefficient of elasticity of demand for export shows the relationship between the growth rate of export products of a given country and the GDP of countries that import these products. An export or import elasticity coefficient greater than one indicates an increase in the open nature of the economy, a coefficient less than one indicates its decrease. The openness of the economy is associated with the participation of the country in the international division of labor and the influence of the international division of labor on the formation of the structure of its production. In a national economy of a closed type, the structure of production depends, on the one hand, on the capital and resources available in the country, on the other hand, on the structure of domestic demand. An open economy is characterized by the effect of a significant influence of the international division of labor on decision-making regarding the formation of the internal structure of production. 19. Globalization of markets for goods and services The process of internationalization of national economies is primarily associated with the development of international markets. This process covers the international sphere of exchange and consumption, forming the basis for the development of all forms of international economic relations. The internationalization of national economies began to develop on an increasing scale since the beginning of the industrial revolution, when goods began to be produced in volumes exceeding the internal needs of countries. The development of industrial production determined the processes of deepening the international division of labor, which, in turn, created a stable basis for the interaction of national economies. The internationalization of the spheres of exchange and consumption was accompanied by the creation of an international economic infrastructure, which includes a transport network, communications, and information systems. The formation of international trade relations led to the formation of a system of international payments and international movement of loan capital. The improvement of machine technology, means of transport, and communications made it possible to divide production processes into separate stages, to locate separate production facilities in different countries in accordance with the advantages of the international division of labor. This was possible on the basis of the international movement of entrepreneurial capital. Production has become directly international, creating the basis of the world, global economy. The globalization of national economies is understood as the creation and development of international, world productive forces, factors of production, when the means of production are used on a global scale. Globalization is manifested in the unification of markets separated by economic or state boundaries. An analysis of the processes of globalization makes it possible to determine the degree of unity of the world economic system, the role of national economies in it, as well as the influence of this process on the position of national economies. 20. Interdependence of national economies The internationalization of economic life has led to the emergence of interdependence of reproductive processes at the global level. An increase in national income in one country in the context of the internationalization of exchange contributes to the growth of imports of goods and services on a global scale. This effect can be used in economic policy. An economically large country, with its monetary and fiscal policy, can stimulate domestic production and, accordingly, imports, which will cause an increase in the export of another country. No less important consequences for the economies of other countries have the opposite effect. If one country tightens its monetary, credit or fiscal policy by raising interest rates and taxes, the intermediate result will be a decrease in demand for domestically produced goods and services due to a decrease in income and employment. Part of the decline in demand is for foreign goods, which leads to a reduction in imports. This causes contraction of the economy of other countries and, in turn, leads to a decrease in demand for the export of the first country, increasing the contraction of its economy. Further cuts further reduce imports, which could exacerbate the downturn in other economies. Interdependence often creates complex problems for national economies. The export orientation of production makes the country dependent on changes in world prices, fluctuations in world demand, and competition in the world market. Such dependence is especially dangerous for small countries with a narrow specialization of the economy. Import dependence is no less fraught with negative consequences. Rising world prices, restrictions on export supplies in exporting countries - all this adversely affects the importing country. Of great importance is the differentiation of countries in terms of economic power, level of economic development, and role in the world economy. At present, the existing model of the world economic system gives one-sided advantages to the leading industrialized countries. The weakest participants in the world economy cannot ensure the protection of their interests. 21. The concept of economic security All countries, in one way or another, strive to secure long-term strategic advantages in the sphere of economic relations. At the same time, the uneven development of different countries makes the positions of the parties unequal, creates the possibility of pressure and even economic blackmail. It is often on this basis that relations between "poor" and "rich" countries develop in international trade, economic, monetary and financial relations. Carrying out such a policy means insecurity in the world economy. Economic security (international and national) is global in nature and affects the interests of all states to varying degrees. International economic security is understood as such economic interaction of countries that would exclude deliberate damage to the economic interests of any country. As world experience shows, damage can be caused in various ways: by disrupting the normal state of international trade (the use of an embargo, the introduction of excessive quantitative and tariff restrictions, artificially raising or lowering prices for certain goods); creating restrictions on the way of the international movement of technologies and information, etc. Deliberate damage can be done to the country's currency by violating its currency regime, manipulating the undervaluation of the exchange rate, freezing the country's deposits in foreign banks, and imposing credit restrictions. The procedure for the movement of capital may be deliberately violated, in particular, by illegal requisition or nationalization without compensation for the property of foreign investors. Among the violations of international economic security may include the organization of targeted emigration from the country of the most qualified scientific and technical specialists, the violation of the existing system of international transport communication contrary to existing agreements in this area, etc. 22. Economic mechanism of the world market In its most general form, the economic mechanism of the world market can be defined as a social system of organization of productive forces (factors of production), a set of forms and methods for regulating economic processes on a global scale, as well as organizational and legal foundations that determine the production, distribution, exchange and consumption of manufactured products. , dynamism and qualitative parameters of economic development. The economic mechanism ensures the interaction of various forms of capital in the process of its use. Like any socio-economic object, the mechanism of the world economy performs certain social functions: 1. Economic realization of property, which is manifested in the production and appropriation of surplus value. Ownership is realized in specific forms of capital movement, intra-industry and inter-industry competition, which give rise to the corresponding incremental forms of surplus value. 2. Regulation of the proportions of world production. The need for their regulation lies in the fact that they are subject to constant deviations. 3. Resolution of contradictions between the level of development of productive forces and production relations. Production relations (objectively developing relations between people in the process of reproduction, determined by forms of ownership) have a serious impact on the level of productive forces. As the productive forces develop, certain changes occur in economic relations. Thus, the relations of production adapt to the increased level of the productive forces, but the contradictions are not eliminated, which serves as a further stimulus for the development of the productive forces. The main engine of development of the world economy is the constantly growing world market, which is a combination of domestic, foreign and international markets. 23. The role of the state in the world economic system The state occupies a special position in the world economic system and performs specific functions at the national and international levels. With great financial power, the state uses a wide range of measures to influence economic processes through budgetary, credit, monetary, and foreign exchange policies. Along with short-term methods of influencing the economy, the state uses various forms of long-term regulation, pursues a certain structural policy, stimulating production shifts, overcoming regional differences, and increasing the competitiveness of national companies. At the same time, the state seeks to create favorable external conditions for expanded reproduction within its own country, which leads to a constant struggle between two opposing trends: the liberalization of economic policy and protectionism. State regulation of the foreign economic sphere is carried out using a wide range of measures: - Customs tariffs, which, by the nature of their impact, are among the regulators of foreign trade; - non-tariff regulatory measures, which include a large number of trade and economic policy measures, including licensing, anti-dumping and countervailing duties, customs formalities, technical standards and norms, sanitary and veterinary norms, etc. The state policy of protecting the domestic market from foreign competition through the use of tariff and non-tariff instruments of trade policy is called protectionism. The general trend of recent times has been an increase in the influence of the state on the course of economic processes in almost all countries of the world. Adapting to the internationalization of economic life, the state regulates on a larger scale and more quickly. At the same time, regulation is directed, as a rule, not at preventing competition, but at a more flexible impact on it, as well as at state support for private entrepreneurship within the country. 24. The role of transnational companies in the global economic system An important form of modern international economic relations is the activity of transnational corporations (TNCs). Late 60s-early 70s. In the twentieth century, transnational corporations began to actively create a production, marketing, dealer and financial network in the national markets of other countries. As a result, they have had a significant evolutionary impact on the formation of international economic relations, international investment, international capital markets, foreign exchange transactions, labor migration, the transfer of new technologies, etc. It is possible to plan the production of goods and services on an international scale within the framework of TNCs only taking into account internal and external factors that affect the economic activities of companies. The main factors include: - general trends in world economic development; - development of individual industry and regional markets; - socio-cultural conditions in individual markets or in individual groups of countries; - political and legal conditions; - natural environment. In modern conditions, the largest TNCs build their activities on the basis of global marketing, which takes into account the influence of all of the above factors. Guided by the global interests of expanding production, strengthening positions in the world market and increasing profits, TNCs, depending on changes in the economic situation, socio-political climate in certain countries and regions, constantly maneuver their production and financial resources throughout the world economy, transfer huge masses of capital from one country to another. Over 30% of world trade is intracompany deliveries of TNCs, carried out not at international, but at intracompany, transfer, prices. Thus, TNCs, ensuring their interests, form the division of markets into closed and open segments. These processes significantly change the conditions for the international activities of companies and deform the market. 25. International economic organizations International economic organizations are among the important subjects of the world economy. The most important are the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD). The latter, together with its subsidiaries (International Finance Corporation (IFC), International Development Association (MAP), etc.) forms the World Bank Group (IB), or the World Bank. The IMF and the IBRD were established in 1944 as specialized coordinating monetary bodies. Their activities are interrelated to some extent. Membership in the World Bank is impossible without participation in the IMF. The IMF, according to its goals, was originally supposed to promote the development of international trade by eliminating restrictions on international current transactions and introducing the convertibility of currencies. In this regard, the fund provided financial assistance to eliminate deficits in the balance of payments and ensure the stability of exchange rates. In the 80-90s. In the XNUMXth century, the Fund has become a major financial center. The main place in its activity began to be occupied by lending aimed at the goals of economic development and restructuring of the economy. The IMF began to provide loans primarily for the implementation of specific economic programs. Funding for economic development programs practically turned it into an international bank. Funds for the implementation of economic programs and the regulation of the monetary sphere are formed from contributions from member countries on the basis of certain quotas and from loans in private capital markets. The World Bank is the largest investment institution. In recent decades, it has been lending to specific projects in developing countries and countries with economies in transition. World Bank loans cover mainly about 30% of the total cost of projects. The borrowing country bears the bulk of the costs. Subsidiary institutions of the IB are specialized in performing specific tasks. IFC promotes the growth of the private sector in developing countries, and MAP provides assistance to the poorest countries on concessional terms. 26. Types and forms of regional economic integration There are two types of regional economic integration: interstate economic integration and integration at the micro level, which is based on private foreign direct investment. Interstate integration associations exist in the following forms: - free trade zones, which aim to eliminate obstacles in mutual trade; - customs unions, which, in addition to eliminating barriers to mutual trade, take measures to protect their domestic market from customs and taxation from competition from "third countries". At the next stages, the integration process in its development takes the form of a common market with freedom of movement of goods, services and capital, a single market with the unification of the legal and economic and technical conditions of trade, the movement of capital and labor, and, finally, the formation of monetary and economic unions. If the single market regulates mainly the sphere of exchange, then the creation of an economic union provides for the unification of the functioning of all spheres of economic activity, the coordination of the economic policies of the member countries of the union and the creation of a single legislation. This implies the formation of supranational bodies that can make binding decisions for all, and the refusal of national governments from the corresponding functions. Currently, there are more than 30 integration associations of various types in the world. Most of them are in the lower stages of development - either preferential trade agreements or free trade areas, which do not include any obligation to harmonize or unify national economic policies. In industrialized countries, integration processes have been most developed in Western Europe (European Union - EU) and North America (North American Free Trade Association - NAFTA). 27. Regional economic organizations: EU and NAFTA Regional economic organizations are interstate economic formations that aim at the gradual unification of national economies through convergence and changes in economic mechanisms, primarily in the foreign economic sphere. Regional integration associations include geographically close countries with approximately the same level of socio-economic development. Almost all of them are at the lower levels of economic unity. Real progress towards the unification of national economies is taking place in Western Europe, where an economic community is emerging in the form of the European Union (EU), and in North America (NAFTA). The EU is organized in a supranational form. It has a number of powers that were inherent only to nation-states. On their basis, there are a number of economic and other management bodies that have an interstate (European Council, Council of Ministers) and supranational character (European Commission, European Parliament, European Court, Chamber of Auditors). This division of EU bodies reflects the division of competence between EU institutions and national governments. Supranational bodies realize all-Union goals, interstate bodies reflect national interests. The main feature of the organizational and legal system of the EU is the superiority of the law of the European Union over national law within the main treaties. The EU acts as an independent subject of international law, concludes trade agreements, cooperation agreements with other countries, and is a major center for providing economic assistance. Since 1994, the North American Free Trade Association (NAFTA) has been operating in North America. It includes the USA, Canada, Mexico. The agreement provides for the elimination of mutual barriers to the movement of goods and capital by 2010. As a subject of the global economy, NAFTA is at the beginning of the formation process. 28. Associations of producing countries and free economic zones Along with associations in the form of free trade zones and customs unions, associations of countries producing and exporting raw materials, as well as free economic zones, occupy an important place in the process of economic rapprochement. Associations of producing countries were created by developing countries, since raw materials play an important role in the economy of many of them, reaching 80% of the exports of individual countries and being the main source of foreign exchange earnings. Associations were created with the aim of confronting powerful multinational companies that pursued a policy of low prices for raw materials. The right to form such associations has been confirmed by resolutions of the UN General Assembly. The most successful example of the functioning of associations of producing countries in the international arena is the activity of OPEC (organization of oil exporting countries). A significant role in the world economy is also played by free economic zones (FEZs) created in states that are members of various regional economic associations. There are currently approximately 200°SEZs in the world. Their total foreign trade turnover exceeds 10% of world trade. A free economic zone is a separate territory, which, while remaining part of the national territory, is considered from the point of view of the fiscal regime as being outside state borders. The most characteristic feature of these zones is the virtual absence of any restrictions on the activities of foreign companies, primarily in terms of the possibility of free movement of financial capital and the transfer of profits, as well as the possibility of duty-free trade. Free economic zones best meet the needs of multinational corporations, since the host country usually provides infrastructure and initial workforce training in the territory of the free economic zone. 29. Structure of foreign trade: export and import The structure of foreign trade includes export and import operations. Export is understood as a type of entrepreneurial foreign trade activity related to the receipt by a resident company of foreign exchange earnings as a result of the sale and export of its products to a foreign non-resident partner outside the country. The export operation scheme includes: - signing a contract for the supply of goods; - supply of goods. The main stages characterizing the export operation are: - conclusion of a contract with foreign contractors; - goods crossing the border of the exporting country; - receipt of payments by the exporter in foreign currency. Exports can be of two types: non-resident (when an enterprise exports surplus from time to time, offering goods to local wholesalers representing foreign firms) and active (in order to expand exports in a particular market). In addition, export can be direct and indirect. Direct export is carried out through the export department of the enterprise located in its own country, through the sales office (branch) abroad, through foreign distributors or agents. Indirect export is carried out by attracting independent intermediary exporters. Thanks to this, the company does not bear the cost of creating its own distribution network abroad and reduces the risks associated with the sale of goods. Import is understood as a type of entrepreneurial activity of residents associated with the purchase from non-residents and importation into the country of a resident of goods, services and technologies for subsequent sale in the domestic market. Import operations are also of two types: direct and indirect. With direct import, resident companies buy goods directly from a foreign manufacturer or from an export broker abroad. An import transaction is carried out between a resident (domestic importer) and a non-resident (exporter) abroad. With indirect imports, Russian enterprises (residents) buy goods from an intermediary company specializing in import transactions, which, in turn, receives goods from a foreign manufacturer or exporting company. 30. Scheme of import operations, licensed and unlicensed imports The import operation scheme includes: - signing a contract for the purchase of goods; - supply of goods. The main features of import operations are: - conclusion of a contract with a foreign counterparty (non-resident); - crossing the border of the importing country by the goods; - payment of the object of the contract in foreign currency. In the process of regulating import operations, three factors are taken into account: 1. The need for a policy of protectionism. 2. Providing national consumers (enterprises and the population) with products that are not produced domestically or are produced in insufficient quantities. 3. Fulfillment of the fiscal function of the state by levying import tariffs. There are two types of import regime: unlicensed import and licensed. Unlicensed import is carried out in the case when the conclusion of import contracts has no restrictions, i.e., the importer can, without special permission from state regulatory bodies, conclude a sales contract with a foreign supplier, import goods into the territory of his country and pay abroad for the goods. Licensed imports are carried out when the import of goods from abroad requires special permission from the regulatory authorities, which determine the conditions, volume and issue licenses for a certain type of product. Only after obtaining an import license can the importer enter into a sales contract with the supplier. To carry out an import operation, the importer must have the necessary financial resources to purchase goods, collect information about potential suppliers, analyze the prices of competitors offering similar goods on the domestic market, conclude a contract with the exporter on the most favorable terms, make payment and receive the purchased goods. It is also necessary to determine the volume of purchases of goods, which can be of three types: regular purchases in large wholesale lots, regular purchases in small wholesale lots, purchases as needed. 31. Re-export and re-import Varieties of export and import operations are re-export and re-import operations. Re-export operations are operations for the re-export from the country of goods previously imported from abroad. The country that imports and then exports the goods is the re-exporting country. A prerequisite for a re-export operation is that the goods in the country of the re-exporter should not undergo any deep processing. In a separate case, minor changes may be made: a change in packaging, the application of special markings, i.e. operations that take into account the requirements of the country of consumption, but do not change the original purpose and name of the product. If the additional processing of a re-exported product exceeded half of the export price, then, according to trade practice, the product changes its name and is no longer considered re-exportable. During re-export operations, it is not necessary to import the re-exported goods into your country. The contract with the exporter may specify the shipping details of the importer, and the goods will go to the importer's country, bypassing the country of the re-exporter. The decision to import goods into the re-exporter's country or not is made by the importer and re-exporter, taking into account transport, customs and other conditions. This does not apply to cases where there are government restrictions on the sale of a particular product to a particular country. Re-import operations are not foreign trade operations in the full sense, since no one specifically carries them out. Re-import operation means the import into the country of a product previously exported from it, which has not undergone processing. Re-import operations occur in the following cases: - return of goods rejected by the buyer; - return of goods not sold at auctions, fairs, exhibitions; - return of goods not sold through consignment warehouses. Consignment is a condition for the sale of goods, when the ownership of the goods received at the supplier's warehouse remains with the exporter until it is sold to the buyer. Usually the terms of consignment - storage of goods in the intermediary's warehouse from 1 to 1,5 years. If during this period the goods are not sold, then they are returned to the owner (exporter) at his expense. 32. Non-tariff restrictions in the field of foreign trade The most common restrictions in the sphere of foreign trade are tariff duties. Customs duties are a tax imposed on the importation into or, less commonly, the exportation of certain types of products from a country. At the same time, a frequently used method of influencing the foreign trade activity of enterprises is non-tariff barriers, which are a set of direct and indirect (indirect) restrictions on foreign trade using an extensive system of economic, political and administrative methods. In the modern practice of interstate exchange, contingenting and licensing of foreign economic operations, as well as the introduction of a state monopoly on certain types of operations, have become widespread. The quota is associated with the establishment of a certain quota for the export (import) of individual goods or commodity groups, within which foreign trade operations are carried out relatively freely. In practice, contingents are usually established in the form of a list of goods whose free import or export is limited to a percentage of the volume or value of their national production. The limiting form of the quota is the embargo, in which certain types of imports are completely prohibited. Licensing implies the need for an organization to obtain a permit (license) from government agencies to carry out foreign economic activity. Such a system enables the state to control foreign economic relations and regulate them to achieve various economic and political goals. In some cases, licenses are a type of tax applied by a country to generate additional customs revenue. The methods of direct restrictions may also include the use of state monopoly as the exclusive right of state bodies or private companies authorized by them to carry out certain types of production and foreign economic activity. 33. Indirect restrictions in foreign trade and government export promotion Indirect restrictions on foreign trade, unlike direct restrictions, are not directly related to a ban on foreign economic activity or a decrease in its volume. At the same time, they often turn out to be no less effective means of protectionist protection of national producers than customs taxation. One method of indirect restriction is the use of a system of national standards. Failure to comply with the standards of the country may serve as a reason for the ban on the import of imported products and their sale on the domestic market. Similarly, the system of national transport tariffs often creates advantages in paying for the transport of goods by exporters over importers. In addition, other forms of indirect restrictions can be used - the closure of certain ports and railway stations for foreigners, an order to use a certain share of national raw materials in the production of products, a ban on the purchase of imported goods by state organizations in the presence of national analogues, etc. The system of state incentives for exports includes a system of financial incentives provided to national exporters to increase the competitiveness of their products in the foreign and domestic markets. These measures include: - provision of state guarantees in respect of credit resources attracted to provide working capital for export-oriented organizations; - guaranteeing insurance of export credits against long-term commercial risks; - direct subsidies to exporters in the form of export premiums, payment of the difference in the cost of services for the transportation of goods by national and foreign carriers; - issuance of export credits on preferential terms, etc. The state also assumes a significant part of the costs of training personnel, researching the world market situation, protecting the interests of national exporters and importers abroad, as well as providing the necessary political conditions for their activities in the foreign market. 34. Forecasting methods in international commodity markets The forecast of any commodity market is usually developed on the basis of data analysis and study of indicators that can help in determining the trends in the development of production and international trade in the future. The market forecast provides an assessment of the probable price movement, depending on which the tactics of purchasing and selling goods change. There are many different forecasting methods, among which extrapolation, expert estimates, economic and mathematical modeling, and the balance method are most widely used. Extrapolation is based on the analysis of past patterns of development of the studied economic phenomenon and their distribution to the future. It is assumed that the main ratios, proportions and growth rates characteristic of this phenomenon, with a high degree of probability, without significant changes can take place in the future. Thus, the use of extrapolation for the purpose of predicting market conditions is taking into account the experience of the past as the action of objective laws of economic development. Expert assessments are based on the experience, knowledge and intuition of highly qualified specialists. Most often they are used in the development of economic forecasts. Economic and mathematical modeling makes it possible to establish certain quantitative patterns that characterize the development of the market, and to give a qualitative assessment of the significance of individual indicators that reflect the impact of various conjuncture-forming factors. On the basis of data for a number of years, economic and mathematical models are compiled that reflect more or less complex functional relationships between various indicators of the commodity market. The balance method is used to forecast the situation in some markets for raw materials of organic origin. Its essence is to balance supply and demand. On the basis of data for previous years, an estimated balance of production and consumption for the next year is being developed. It takes into account carry-over stocks of past years, estimates of harvest, domestic consumption, and carry-over stocks at the end of next year. 35. Types of documents used in foreign trade activities The practice of foreign trade has developed certain documents that allow the buyer and seller to guarantee deliveries and payments. These documents accomplish the following tasks: - the seller can confirm the fulfillment of delivery obligations in accordance with the terms of the contract; - the presentation of documents may entail the fulfillment of the buyer's payment obligations; - with the transfer of documents, the right to dispose of the goods can pass to the buyer; - the use of documents allows you to connect credit institutions to the implementation of foreign trade transactions. Transport documents include: bill of lading, loading certificate, international waybill, air waybill, forwarding certificate of receipt of cargo, postal receipt. Insurance documents include insurance policy and insurance certificate. Commodity and customs documents include: invoice, consular invoice, customs invoice, certificate of origin of goods, sanitary certificate, inspection certificate, analysis certificate, weight certificate, factory passport, etc. A bill of lading is a document issued by a charterer (carrier company) to a consignor (exporter or his transport agent) and certifying the acceptance of goods for transportation. The charterer undertakes to transport the goods and hand them over to the rightful owner of the bill of lading at the port of destination at the end of the carriage by sea. In addition, the bill of lading confirms that the charterer has loaded certain goods (on-board bill of lading) or accepted them for carriage (bill of lading for cargo accepted for carriage). If the onboard bill of lading testifies to the loading of goods on board, then the bill of lading for the cargo accepted for transportation only documents the acceptance of goods for transportation. The bill of lading for the cargo accepted for carriage can then be reissued into an onboard bill of lading. At the same time, the charterer's note ("Loaded on board") with the date and signature or initials is made on it. 36. Through, sea and warrant bills of lading A through bill of lading is a shipping document that confirms that the person issuing the document undertakes to deliver the accepted goods to the authorized owner of the bill of lading in the case when transportation from the place of loading to the destination is made using several vehicles (multimodal transport). A sea bill of lading is a bearer document, i.e. the rights arising from it are possessed by the one who, on the basis of a continuous chain of endorsements, is authorized to accept the goods. The maritime bill of lading is the right to dispose of the goods and gives its rightful owner a guarantee that the goods in question will be handed over to him at the end of the maritime transport. From an economic point of view, a sea bill of lading makes it possible to dispose of property that is in the process of sea transportation. In practice, most often there is an order bill of lading issued to an "order" with a blank endorsement. It is not recommended to issue a bill of lading to a specific "order" (for example, to the recipient), unless specifically required. The exporter is thereby deprived of the right to dispose of the goods, since in this case, if the exporter wishes to change his instructions regarding the goods in the future, the recipient's endorsement would be required. A complete set of bills of lading consists of originals, the number of which is always indicated in the bill of lading. As a rule, they are stamped "Original"; in other cases, they must be identified as the original by printing design. Copies signed by hand and not marked as copies are considered originals. Each copy of the original has independent force, i.e. the goods at the port of destination can be issued upon presentation of any copy of the original. Therefore, the copies of the original indicate that after the issuance of the goods for one of them, the remaining unpresented originals become invalid. It is recommended to issue "clean" bills of lading, i.e. they should not contain clauses or information that would characterize the condition of the goods or packaging as poor quality. 37. Certificate of loading, duplicate waybill A loading certificate, also called a river bill of lading, is an inland transport document. This document is subject to basically the same rules as the maritime bill of lading. Transport documents also include waybills of international rail, road and air traffic (duplicate waybills). A duplicate waybill is a document that indicates the actual transfer of the goods by the sender for shipment to the consignee indicated on the waybill. In addition, the issuance of a duplicate waybill means the consignor's irrevocable waiver of the right to dispose of the goods. Thus, the duplicate waybill acts as a blocking document, i.e. the consignor can realize the possibility of restoring the right to dispose of the goods only upon presentation of a duplicate waybill. The consignor loses the right to dispose of the goods from the moment the consignee has accepted the duplicate waybill (when using the railway waybill, the fourth copy of the waybill in the form of a typewritten copy is handed over to the consignor; when using the air waybill, the third original waybill) or the goods have been handed over to him. For cargo transportation by air, airlines issue a single waybill. It is filled in three original copies with an arbitrary number of copies. The first original remains with the airline, the second follows the goods and is intended for the consignee, and the third is signed by the airline and after acceptance of the goods is transferred to the consignor. The third original certifies the transfer of the said air cargo for shipment to the consignee indicated in the air waybill. As with the use of a duplicate waybill, the shipper has the right to subsequently restore his right to dispose of the goods at the point of shipment or destination, i.e. he can dispose of the goods if he receives a third original, and the goods have not yet been transferred to the consignee. The consignee does not need a copy of the air waybill to receive the goods. 38. Forwarding certificate and insurance documents The forwarding certificate of acceptance or dispatch of the goods certifies that the transport and forwarding company has accepted the goods with an irrevocable order to send it to the consignee or to transfer it to a third party. The certificate of acceptance of the goods, accepted by international transport and forwarding companies, provides, under certain conditions, the possibility of revocation or modification by the exporter of his orders. Thus, the dispatch order may be revoked or changed only upon return of the original certificate and only when the forwarding company that issued the certificate still has the right to dispose of the said cargo. An order to transfer the goods to a certain third party can only be withdrawn or changed until the moment when the freight forwarding company that issued the certificate has received confirmation of the transfer of the goods to the disposal of a third party. An insurance policy is a document by which an insurance company certifies the conclusion of an insurance contract. The insurance policy reflects the amount and nature of the insurance cover. When insuring transportation, one-time and general policies are distinguished. A one-time policy is issued for one transportation, while the general one is a long-term insurance contract, which provides permanent insurance protection. In the presence of a general policy, its owner can request documents for individual cargo transportation, called insurance certificates. Both policies and certificates are in most cases issued as documents to the bearer, less often - as warrant documents. Typically, insurance documents are issued in two or three copies and have the appropriate distinguishing features. In case of damage, payment is made upon presentation of one copy. Therefore, in insurance policies and certificates there is a record that after the payment of insurance compensation for one of the copies, the rest become invalid. 39. Commodity and customs documents, certificate of origin of goods Commodity documents include commodity invoice, customs invoice, consular invoice. A commodity invoice, or invoice, is issued on the exporter's invoice form and contains, as a rule, the following information: - name and address of the exporter; - name and address of the importer; - number and date of the invoice; - the quantity, type and marking, as well as the weight and, in some cases, the mass of the cargo; - the exact name of the product; - piece and total price, as well as additional costs; - terms of payment and delivery; - type and route of transportation; - vessel name, wagon number, etc. Since an invoice is often required in the importing country for various administrative procedures, it must be drawn up in strict accordance with the procedure accepted in that country. Timely receipt of information about these requirements from chambers of commerce, consulates and other competent institutions will save the exporter from delays in processing documents. The invoice must be signed by the seller. The consular invoice is drawn up by the exporter on the form accepted in the country of the importer and legalized by the consulate of his country. The consulate certifies that the invoiced value of the goods corresponds to its trade value in the country of the exporter, which is necessary, in particular, for the correct calculation of the customs duty. A customs invoice is generally similar to a consular invoice. At the same time, its legalization by the consulate is not required. However, it is often necessary to verify the exporter's signature on the invoice by a witness. Customs invoices are used primarily when exporting to EU countries, as well as to the USA. In these countries, they are called a special customs account. The certificate of origin of the goods is issued by the authorized body and certifies the origin of the goods. The certificate of origin of the imported goods must be issued by the administrative or other authorized body of the exporting country. A single international form of evidence of origin of goods has not yet been developed. 40. Forms of international currency and payment and settlement relations Currency relations are a form of international economic relations. These include: - currency transactions between participants of the currency market; - currency arbitrage, which allows using the difference in currency quotes in international and national currency markets; - implementation of currency restrictions and use of currency clearing; - other operations. International payment and settlement relations are the regulation of payments for monetary claims and obligations that are formed as a result of economic, political, scientific, technical and cultural relations between states, legal entities (companies, enterprises) and citizens of various countries. Settlements are made through commercial or specialized banks serving foreign trade, as a rule, by non-cash method. Banks use their overseas branches or correspondent relationships with foreign banks. Bank settlements are accompanied by the opening of correspondent accounts LORO (foreign banks in this bank) and NOSTRO (this bank in foreign ones). These relations include the procedure for settlements, the size of the commission, methods of replenishing the funds spent. Forms of international payments have the following historical features: - importers and exporters, as well as their banks, enter into certain relations related to documents of title and payment; - international settlements are regulated by regulatory legal acts, as well as banking rules; - international payments are unified and universalized on the basis of the international Bill (1930) and Check (1931) Conventions. The International Chamber of Commerce and the UN Commission on International Trade Law (UNISTRAL) are currently continuing their work on the unification of international settlement documents; - international settlements are documentary in nature, as they are set against financial and commercial documents. 41. Documentary forms of payment in foreign trade: documentary collection A feature of documentary payments in foreign trade is that the payment for goods by the importer and the delivery of goods by the exporter are linked to the transfer or receipt of certain documents. The exporter receives the agreed payment for the goods only if he certifies, by presenting or handing over documentation (usually shipping documents), that he has sent the goods to the importer. The importer receives the documents (and thus the right to claim the release of the goods) only when he has paid the agreed price (opportunity transaction). The nature of payments and deliveries between partners is always determined by the contract of sale between the exporter and importer. There are two types of documentary settlements: documentary collection and documentary letter of credit. Banks are instructed to collect documents when the exporter and importer agree on terms of payment such as "documents against payment" and "documents against acceptance". The importer, upon presentation of documents to him, depending on the type of payment terms, is obliged to either immediately pay (under the terms of payment "documents against payment"), or accept the bill of exchange drawn up in his name by the exporter and pay it off when the due date for payment (under the terms of payment "documents against acceptance"). Under the terms of payment "documents against payment", documents, as a rule, are subject to payment at first sight, that is, within the period accepted in international practice for these terms of payment - 24 hours. At the same time, at the discretion of the exporter, the period for the purchase of shipping documents may be arbitrarily extended. Unlike payment under a documentary letter of credit, an exporter with a collection form of payment does not have confidence that the documents will be redeemed (accepted by the importer). If the collection is not carried out within the agreed period, the correspondent bank immediately informs the exporter's bank about this. In this case, the exporter is forced to find another way to sell the delivered goods at his own expense. 42. Documentary forms of payment in foreign trade: documentary letter of credit A documentary letter of credit is a conditional abstract obligation of a credit institution to make, within a specified period, a payment at the expense of the payer of a certain amount to a specific payee against certain documents. A documentary letter of credit is currently the most common form of payment in the practice of international trade. In addition to a payment letter of credit, it can also perform a credit function; according to letter of credit schemes, it is possible to receive funds to complete export operations or loans before receipt of proceeds from the sale of imports. The exporter seeks to fix in the contract of sale a letter of credit form of payment in cases where the importer is not sufficiently known to him and he cannot assess his solvency. The letter of credit guarantees the receipt of payment, since the exporter only delivers when its payment is secured by the payment obligation of the credit institution. Thus, a documentary letter of credit gives the seller almost the same guarantees as an advance payment. The main advantages of using documentary letters of credit include: - applicability as a security tool in transactions with almost all countries of the world; - a high degree of risk protection for all participants in the transaction; - flexibility in terms of payment; - the possibility of using as a means of short-term financing; - fast and unhindered payment execution; - an alternative to advance payment; - international legal reliability. To facilitate work on letters of credit, unified international rules for working with documentary letters of credit have been developed. These rules regulate, in particular, the form and procedure for issuing letters of credit, the procedure for their processing and transfer, the guarantees and liability of the participants in the transaction, the content of the terms used, as well as the types and features of the documents used in letter of credit transactions. 43. Participants in letter of credit operations Participants in letter of credit operations - importer, letter of credit bank, advising authority, payment authority, payee. The importer is the holder of the letter of credit. He opens a letter of credit in his bank in favor of the exporter. Letter of credit bank - the bank of the importer, in which a letter of credit is opened in favor of the exporter. A letter of credit bank, on behalf of its client, gives an obligation to pay. An advising authority is a bank that informs the exporter about the opening of a letter of credit. It can be, for example, the exporter's bank or any third bank. The payment authority is a credit institution that accepts documents from the exporter and pays the appropriate amount to the payee. This is usually the exporter's bank. The payee is the exporter. The bank that opens the letter of credit undertakes to pay it under the letter of credit. The following legal relationships exist between the participants of a letter of credit operation: 1. The letter of credit and the recipient under the letter of credit conclude a contract of sale, taking into account the main conditions of the transaction. 2. The accreditor and the accrediting bank sign a contract of instruction to open a letter of credit. 3. The letter of credit bank and the advising/confirming bank conclude a contract of instruction for the implementation of letter of credit operations. 4. The letter of credit bank and the recipient under the letter of credit in the case of an irrevocable letter of credit give a conditional abstract payment obligation, which means that when the recipient of the payment fulfills the letter of credit obligations, the bank that opened the letter of credit is obliged in any case to make a payment in his favor. 5. Advising bank and the bank selected by the issuing bank for advising the documentary letter of credit to the beneficiary (exporter). The advising bank does not assume any payment obligations under the documentary letter of credit. The only obligation of the advising bank, if it agrees with the order of the issuing bank, is to check the authenticity of the letter of credit by external signs and advise it to the beneficiary. 44. Types of letters of credit Letters of credit may differ in the following ways: 1. By validity period: - urgent; - perpetual. 2. If possible, revocation by the accreditor: - revocable; - irrevocable (in the form of confirmed or unconfirmed letters of credit). 3. By terms of payment: - with payment on sight; - payable within a certain period after presentation. 4. If possible transfer to third parties: - transferred; - non-transferable. 5. By renewability: - non-renewable; - renewable (letter of credit is automatically renewed after use). 6. Special forms of letters of credit (commercial letter of credit, etc.). The most common form of letter of credit in the practice of international trade is an irrevocable letter of credit. An irrevocable letter of credit establishes a firm obligation of the credit institution that opened the letter of credit. If the payee is advised by another bank (advising bank) without its additional guarantee, this is an unconfirmed letter of credit. Irrevocable letters of credit must always be urgent. With a confirmed letter of credit, the letter of credit institution issues an additional contingent abstract promissory note to the payee. The recipient under the letter of credit may thus put forward claims against the bank that opened the letter of credit and against the bank that confirmed it. The recipient usually requires confirmation of a letter of credit by his bank when the bank that opened the letter of credit is unknown to him or when the state of the balance of payments of the importing country is doubtful (in some cases, if there is a risk associated with the transfer of currency from the importing country). Irrevocable letters of credit can only be changed or canceled with the consent of all participants. The term of the letter of credit is determined by the date of maturity of obligations. It must be fixed in such a way that the payee has enough time after shipment to send the documents. The letter of credit is usually realized and paid in the advising bank. The exporter receives the amount due to him immediately after the transfer of documents. 45. Instruments for the functioning of the world market: international price The main instruments for the functioning of the world market include the following economic elements: international price, interest rate, exchange rate. The most important part of the market mechanism is the pricing system. The pricing mechanism allows solving the main tasks related to production efficiency: - assessment of the conformity of the production of a particular product to international needs; - stimulating changes in production towards meeting the criteria of international needs. Thus, pricing acts not only as a regulator of production and exchange, but also as an organizer of social production on a global scale, which contributes to the balance of the global system of world trade. The value of the international value varies inversely with the productivity of export enterprises in a particular country. This usually results in it being above the national value of the commodity in developed countries and below its national value in less developed countries. Selling goods at world prices allows more developed suppliers and countries to make a profit, while economically less developed countries are forced to sell goods at prices below their national production price. As a result, through foreign trade exchange, part of the value created in economically less developed countries is pumped to industrialized more developed countries. In particular, monocultural developing countries are often forced to export their products on any terms in order to obtain foreign exchange funds to purchase the goods they need. It should be noted that supplies to foreign markets are carried out by the most competitive producers of exporting countries, which leads to a decrease in export prices. The use by a number of countries of explicit and implicit forms of support and subsidies for the export of their goods also contributes to a lower level of export prices compared to domestic prices for similar products. 46. Instruments for the functioning of the world market: lending interest rate and exchange rate Restrictions arising from the lack of capital of business entities are overcome with the help of a loan. The course of the reproduction process within the framework of the national economy largely depends on supply and demand in the loan capital market, the economic policy of credit associations. The balance of supply and demand in the credit market is achieved through the equilibrium interest rate. Within the framework of the national economy, a decrease in loan interest stimulates the demand for credit and expands the demand for investment and consumer goods. The rise in the cost of credit, on the contrary, reduces the demand for it, and hence the demand for means of production and consumer goods. In the world economy, the effect of discount rates is reversed. International economic transactions in most cases are associated with the exchange of one national currency for another. Exchange ratios between currencies form the exchange rate, i.e., the price of the national currency, expressed in the monetary units of other countries. Exchange rate fluctuations have a significant impact on changes in the physical volumes of exports and imports, the evolution of current account balances of payments, and the volume and direction of foreign investment. Currency depreciation provides an opportunity for the exporters of a given country to lower the prices of their products in foreign currency, receiving the same or a larger amount in national currency when it is exchanged. At the same time, imports are difficult, since foreign exporters are forced to raise prices in order to receive the same amount in their currency. Changes in exchange rates have a significant impact on the movement of entrepreneurial capital. The appreciation of the currency strengthens the incentives for foreign investment, increases investment in the economy of other countries, which is mainly caused by lower costs for the purchase of foreign securities. The depreciation of the exchange rate, on the contrary, makes domestic production more attractive and reduces incentives for foreign investment. 47. World prices The world market is a complex system that includes a large number of different industry markets for goods and services. For this reason, the level of world prices, their dynamics and pricing procedure are significantly influenced by various factors, both economic and political. World prices are the selling prices of goods on the world market. In international trade, world prices usually act as the prices of transactions between the largest sellers and buyers of a certain type of product or as the prices of the world's main trading centers (exchanges). A characteristic feature of the modern world market is a wide range of prices for the same goods. This is due to the action of a number of factors of a political and economic nature, the pricing policy of large monopolies, customs and tax barriers, special terms of trade in free economic and currency zones, etc. All this leads to the fact that at the same time the real price of goods in certain region may differ significantly from world prices. There are several types of world prices: - prices for commercial transactions with payments in freely convertible currency; - prices for commercial transactions with payments in non-convertible currency; - prices under clearing agreements; - prices for non-trading operations; - intracompany (transfer) prices. Transfer prices are used in settlements for the supply of goods and services within international associations, firms, companies and transnational corporations, including their branches and divisions located in different countries. They are used in the supply of semi-finished products, assemblies, parts, components, etc., and in the practice of firms, as a rule, they are the subject of trade secrets. Import and export prices differ depending on what additional costs are included in them as the goods move from the exporter to the importer: staying in the warehouse of the exporting country, being in the port, traveling abroad, warehousing abroad, etc. 48. Contract prices One of the most important conditions for the delivery of any product is the procedure for determining the price of the contract and the procedure for determining the price of individual goods supplied under the contract. There are several ways to determine the contract prices of goods in the process of concluding international contracts: 1. Firm price fixing in the contract, i.e. prices do not change during the period of its execution. This method is especially important during a period of declining world prices. 2. The contract fixes only the principle of determining the price, and then the specific price is set in the process of executing the transaction. This method is important in the presence of a tendency to increase world prices. 3. When concluding a contract, the price is firmly fixed, but may change if the market price exceeds the contract price by more than a certain percentage. 4. Moving price, which depends on the change in individual costs. 5. Mixed form, in which part of the price is firmly fixed, and the other part is sliding. During periods of high inflation, rapidly rising raw material costs and wage costs, many firms are forced to move away from fixed prices and switch to moving prices. The policy of including a sliding price clause in sales contracts is to protect the seller from losses (a sharp decrease in profits) due to inflation. This is especially important if deliveries under the contract are expected over a long period of time. The effectiveness of an international contract largely depends on the currency of the price and the currency of payment. The price currency is the currency in which prices are set for the product. In some cases, the contract price can be determined in several currencies. The payment currency is the currency in which the importer's obligation will be settled, and in conditions of exchange rate instability, prices are fixed in the most stable currency, and payment in the currency of the importing country. In this case, if the currency of the price and the currency of payment do not match, the contract specifies the conversion rate and its conditions. 49. Terms of payment Terms of payment are an important element of foreign economic transactions. There are the following types of payments: cash payments, settlements with a loan, a loan with a cash payment option. The concept of cash payments in international settlements implies payment for export goods after their transfer (shipment) to the buyer or payment against documents confirming the shipment of goods in accordance with the terms of the contract. However, in modern conditions, in most cases, the goods arrive in the importer's country before the documents payable, and the buyer can receive the goods before payment, as a rule, under a bank guarantee. Thus, the payment is actually made after the arrival of the goods at the port of destination, with the exception of payments against the notice of shipment of the goods. Depending on the type of goods, mixed payment terms are sometimes used: partially - payment against the delivery of commodity documents, and finally - after acceptance of the goods. In foreign trade operations on account of a commercial loan, the importer writes out debt obligations to repay the received loan in the form of a promissory note or gives written consent to payment (acceptance) on bills of exchange - drafts issued by the exporter. Payments for goods in the form of commercial credit can be combined with cash payments, where a certain percentage of the value is paid against the presentation of commercial documents, and the rest after a period of time specified in the contract. In addition to a commercial loan, at certain stages of the execution of a foreign trade contract, the parties may also be forced to lend to each other, for example, when making advance payments, the importer credits the exporter, and when making payments on an open account, the supplier credits the buyer. An alternative form of payment terms is a loan with a cash payment option. If the importer uses the right to defer payment for the purchased goods, then he loses the discount provided for cash payment. Settlements are carried out using various means of payment used in international circulation - bills of exchange, payment orders, bank transfers, checks, etc. 50. Terms of delivery under international contracts: FOB and FCA There are several main types of terms for the delivery of goods under international contracts, which are determined in accordance with international rules for the interpretation of trade terms (Incoterms). Terms of delivery FOB (free on board). The term "free on board" means that the seller has delivered when the goods have passed the ship's rail at the named port of shipment. This means that from now on, all costs and risks of loss or damage to the goods must be borne by the buyer. Under the FOB term, the seller is responsible for clearing the goods for export. This term can only be used when goods are transported by sea or inland waterways. If the parties do not intend to deliver the goods across the ship's rail, the FCA term should be used. Terms of delivery FCA (free carrier - "free carrier"). The term "free carrier" means that the seller delivers the cleared goods to the carrier named by the buyer at the named place. It should be noted that the choice of place of delivery will affect the obligation to load and unload the goods at that place. If delivery takes place at the seller's premises, the seller is responsible for shipping. If the delivery is made to another place specified in the FCA conditions, the seller is not responsible for the shipment of the goods. This term can be used for transportation by any mode of transport, including multimodal transport. The word "carrier" means any person who, on the basis of a contract of carriage, undertakes to carry out or procure the carriage of goods by rail, road, air, sea or inland water transport, or a combination of these modes of transport. If the buyer trusts another person who is not a carrier to accept the goods, then the seller is considered to have fulfilled his obligations to deliver the goods from the moment of its transfer to this person. 51. Terms of delivery under international contracts: EXW, DDU, DDP Terms of delivery EXW (ex works - "ex works"). The term "ex works" or EXW terms of delivery means that the seller is deemed to have fulfilled his obligation to deliver when he places the goods at the disposal of the buyer at his premises or at another named place (for example, plant, factory, warehouse, etc.). P.). The seller is not responsible for loading the goods onto the vehicle, as well as for customs clearance of the goods for export. The term thus imposes minimal obligations on the seller and the buyer must bear all costs and risks in connection with the carriage of the goods from the seller's premises to the destination. Terms of delivery DDU (delivered duty unpaid - "delivery without payment of duty"). The term "delivery duty free" means that the seller delivers the goods, uncleared and unloaded from the arriving means of transport, at the disposal of the buyer at the named place of destination. The seller must bear all costs and risks associated with transporting the goods to this place, with the exception of any fees collected for importation in the country of destination (the word "fees" means the responsibility and risks for carrying out customs clearance, as well as for paying customs formalities, customs duties, taxes and other fees). Such fees must be the responsibility of the buyer, as well as other costs and risks incurred due to the fact that he was not able to clear customs for import in time. Terms of delivery DDP (delivered duty paid - "delivery duty paid"). The term "delivery duty paid" means that the seller delivers the goods, cleared for customs and not unloaded from the arriving means of transport, at the disposal of the buyer at the named place of destination. The seller must bear all costs and risks associated with the transport of the goods, including, where applicable, any fees for importation into the country of destination. While the EXW term represents the minimum obligation for the seller, DDP represents the maximum obligation. 52. Terms of delivery under international contracts: CIF and CIP Terms of delivery CIF (cost, insurance and freight - "cost, insurance and freight"). The term "cost, insurance and freight" means that the seller has delivered when the goods have passed the ship's rail at the port of shipment. The seller must pay the costs and freight necessary to bring the goods to the named port of destination, but the risk of loss or damage to the goods, as well as any additional costs incurred after the goods have been shipped, is transferred from the seller to the buyer. Under the terms of the CIF term, the seller is also obliged to purchase marine insurance in favor of the buyer against the risk of loss and damage to the goods during transport. The buyer should note that under the terms of the CIF term, the seller is required to provide insurance with only minimal coverage. Under the terms of the CIF, the seller is also responsible for clearing the goods for export. This term can only be used when goods are transported by sea or inland waterways. Terms of delivery CIP (carriage and insurance paid to - "freight / transportation and insurance paid to"). This term means that the seller will deliver the goods to the carrier named by him. In addition, the seller must pay all costs associated with the carriage of the goods to the named destination. The CIP also obliges the seller to provide insurance against the risks of loss and damage to the goods during transport in favor of the buyer. The buyer should note that under the terms of the CIP term, the seller is required to provide insurance with a minimum coverage. The word "carrier" means any person who, on the basis of a contract of carriage, undertakes to provide for himself or organize the transport of goods by rail, road, air, sea and inland water transport or a combination of these modes of transport. In the case of transportation to the destination by several carriers, the transfer of risk will occur when the goods are handed over to the first carrier. Under the terms of the CIP term, the seller is responsible for clearing the goods for export. 53. World Commodity Prices In accordance with the classification of the UN statistical office, the group of commodities includes energy resources (oil, coal, etc.), minerals, agricultural products, fertilizers, and non-ferrous metals. The most important feature of the formation of world prices for raw materials is that they do not depend on the magnitude of internal costs, but on the action of other factors. The main ones are: - the ratio of supply and demand in the commodity market; - a combination of prices of major exporting producers and exchange quotations as world prices for most commodities; - the multiplicity of prices of the main exporting producers (and sometimes stock quotes), which play the role of world money, under the influence of the use of various currencies to express prices, the imbalance of supply and demand for commodities, etc.; - the special role of the state or their groups - the leading exporters and (or) importers of the relevant goods in the formation of world prices. Groups of states (main producers and exporters) function in the form of interstate associations of producers that influence the formation and dynamics of world prices. For example, the OPEC Association of Petroleum Exporting Countries, which arose back in the 70s. XX century, still plays a significant role in the formation of world oil prices. In most economically developed countries, the state in one way or another influences the markets, and the government often regulates even free competition markets, and not only by imposing taxes, providing subsidies, but also in other ways. Usually, the policy of national monopolies is supported by the state, which helps to maintain a high level of prices in the domestic market (by guaranteeing producers the level of selling prices and subsidizing production costs), and in the external market - lower prices for export goods to increase the competitiveness of monopolies. 54. Dumping prices Dumping is the sale of goods in foreign markets at prices significantly lower than domestic ones. Commodity dumping arose even before the First World War. At that time, enterprises used their own savings to conquer foreign markets. Dumping prices can be not only lower than production prices, but also lower than prime cost, and the difference, i.e., the loss from dumping, is covered by the excess profits of the monopolies received from the sale of goods on the domestic market. At the same time, as monopolies merge with the state, the difference between domestic and export prices is more and more often eliminated, mainly at the expense of the state budget. In conditions of inflation, when the external depreciation of the currency is ahead of the internal one, conditions arise for currency dumping, the essence of which is that the exporter buys goods on the domestic market at high (due to inflation) prices and sells them on the foreign market at prices below the world average, but for a more stable currency. The exchange rate difference arising from the exchange of a more stable currency received for a depreciated national currency makes it possible to reduce export prices, and exporters' excess profits are ensured by the mass export of goods. Prolonged use of dumping exacerbates the contradictions between countries. In countries exporting goods at dumping prices, the profits of exporters increase, but prices rise, and the standard of living of the population decreases. In the countries - objects of dumping, local industry cannot compete with cheap imported goods, production is curtailed, unemployment is growing. For this reason, in 1967, the International Anti-Dumping Code was adopted, which provides for the application of special sanctions when dumping is used. Despite this, in relations between countries (especially the leading economically developed ones), various anti-dumping scandals regularly arise, affecting the supply of certain goods from one country to another. 55. Marketing strategy in pricing When planning prices for products supplied to foreign countries, an enterprise must, first of all, decide on the following key issues: - whether the prices for the supplied products will have a single level; - at what level and in what currency they should be established in each country; - what terms of delivery to offer to potential buyers. Price standardization is a difficult task, especially for a company that does not operate within a specific common market like the European Union, since it incurs additional costs associated with international marketing. When setting a certain price level, enterprises take into account local economic conditions, in particular, the size of GNP per capita. In practice, for this reason, many firms keep prices low in developing countries by selling them simplified versions of goods or using local cheaper labor. At the same time, prices in economically developed countries reflect the quality of products and the added costs of international marketing. Lower prices abroad are set in order to increase their market share or as a weapon in the competition. If a firm sells goods abroad at a price below the exporter's domestic prices or below production costs, dumping takes place, and protective duties may be imposed on such goods. The next important decision of the firm must be the currency in which prices are set when exporting goods. Defining prices in local currency is preferable because they are easier to control and the risk of foreign currency devaluation passes to the buyer. However, such a strategy is not always feasible because the foreign government may insist that the transaction be carried out in its own currency. In addition to these key issues, the enterprise must also determine the conditions of sale, such as types of discounts for intermediaries, forms of payment, etc. 56. International currency relations International monetary relations - a set of social relations that develop during the functioning of the currency in the world economy and serve the mutual exchange of the results of the activities of national economies. The development of international monetary relations is due to the growth of productive forces, the creation of a world market, the deepening of the international division of labor, the formation of a world economic system, the internationalization and globalization of economic relations. International monetary relations mediate international economic relations, which relate both to the sphere of material production, i.e., to primary production relations, and to the sphere of distribution, exchange, and consumption. There is a direct and inverse relationship between currency relations and reproduction. Their objective basis is the process of social reproduction, which gives rise to the international exchange of goods, capital, and services. The state of currency relations depends on the development of the world economy, the political situation, the balance of power between countries on the world stage. Since the whole set of economic and political relations between countries is intertwined in foreign economic relations, including currency relations, currency relations occupy a special place in the national and world economy. The inclusion of the world market in the process of circulation of capital means the transformation of part of money capital from national money into foreign currency, and vice versa. This happens in international settlement, currency, credit and financial transactions. Although currency relations are secondary to the process of reproduction, they are relatively independent and have the opposite effect on it. Under the conditions of internationalization of economic life, the instability of international monetary relations, currency crises have a negative impact on the process of reproduction on a national and global scale. 57. World and national currency system International monetary relations in the process of historical development have acquired certain forms of organization based on the internationalization of economic ties. The monetary system is a form of organization and regulation of foreign exchange relations, enshrined in national legislation or interstate agreements. There are national, world, international (regional) currency systems. Historically, in the beginning, national currency systems arose, fixed by national legislation, taking into account the norms of international law. The national currency system is an integral part of the country's monetary system, although it is relatively independent and goes beyond national borders. The national monetary system is inextricably linked with the world monetary system - a form of organization of international monetary relations, fixed by interstate agreements. The world monetary system took shape by the middle of the XNUMXth century. The nature of the functioning and stability of the world monetary system depend on the degree to which its principles correspond to the structure of the world economy, the alignment of forces and the interests of the leading countries. When these conditions change, periodic crises of the world monetary system occur, which end with its collapse and the creation of a new monetary system. Although the world monetary system pursues global economic goals and has a special mechanism for functioning and regulation, it is closely connected with national monetary systems. This connection is carried out through national banks serving foreign economic activity, and is manifested in interstate currency regulation and coordination of the monetary policy of the leading countries. The interconnection of national and world monetary systems does not mean their identity, since their tasks, conditions of functioning and regulation, and the impact on the economy of individual countries and the world economy are different. 58. National, world and reserve currency The basis of the national monetary system is the national currency - the legally established monetary unit of the state. In international settlements, a foreign currency is usually used - the monetary unit of other countries. Foreign currency is an object of purchase and sale in the foreign exchange market, is used in international settlements, is stored in bank accounts, but is not legal tender in the territory of this state. However, during periods of high inflation and a crisis in the country, the national currency can be replaced by a more stable foreign currency. The world monetary system is based on the functioning of world money. World money is money that serves international relations. The evolution of the functional forms of world money repeats the path of development of national money - from gold to credit money. Currently, the world monetary system is based on one or more national currencies of the leading countries or an international currency unit (SDR). A special category of convertible national currency is the reserve currency, which performs the functions of an international means of payment and reserve, serves as the basis for determining the exchange rate and exchange rate for other countries, is widely used for foreign exchange intervention in order to regulate the exchange rate of countries participating in the world monetary system. The objective prerequisites for acquiring the status of a reserve currency are: - dominating positions of the country in world production, export of goods and capital, in gold and foreign exchange reserves; - a developed network of credit and banking institutions, including those abroad; - an organized and capacious loan capital market, the liberalization of foreign exchange transactions, the free circulation of the currency, which ensures the demand for it from other countries. The status of a reserve currency both gives advantages to the issuing country (for example, the ability to cover the balance of payments deficit with the national currency), and imposes certain obligations in the form of the need to maintain the relative stability of this currency. 59. Convertibility of currencies and elements of the monetary system There are the following types of currencies according to the degree of convertibility: - freely convertible currencies that can be exchanged for any foreign currencies without restrictions. In fact, the currencies of countries where there are no currency restrictions on current operations of the balance of payments are considered to be freely convertible. Basically, these are industrialized countries and individual developing countries where world financial centers have developed or which have committed themselves to the IMF not to introduce currency restrictions; - partially convertible currencies of countries where currency restrictions remain; - non-convertible currencies of countries where residents and non-residents have numerous restrictions related to the circulation of currencies. An element of the monetary system is the currency parity - the ratio between the two currencies, established by law. Under monometallism (gold or silver), the base of the exchange rate was monetary parity - the ratio of monetary units of different countries according to the content of the precious metal. Under gold monometallism, the exchange rate was based on gold parity, that is, the ratio of currencies according to their official gold content. The exchange rate regime is also an element of the currency system. There are fixed exchange rates, which fluctuate within a narrow range, and floating rates, which vary depending on market demand and supply of currency. The exchange rate with fiat credit money gradually broke away from the gold parity, since gold was forced out of circulation into a treasure. This was due to the evolution of commodity production, monetary and currency systems. Until the mid 70s. In the XNUMXth century, the exchange rate was based on the gold content of currencies (the official price scale) and gold parities, which were fixed by the IMF after World War II. After the cessation of the exchange of the dollar for gold at the official price in 1971, the gold content and the gold parities of currencies became a nominal concept. With the abolition of official gold parities, the concept of monetary parity also lost its meaning. In modern conditions, the exchange rate is based on the exchange parity between the currencies of different countries. 60. The concept of the exchange rate An important element of the monetary system is the exchange rate, since the development of international economic relations requires measuring the cost ratio of the currencies of different countries. The exchange rate is required for the following operations: - mutual exchange of currencies in trade in goods, services, in the movement of capital and loans. The exporter exchanges the proceeds of foreign currency for the national one, since the currencies of other countries cannot circulate as legal means of purchase and payment on the territory of this state. The importer exchanges national currency for foreign currency to pay for goods purchased abroad. The debtor acquires foreign currency for national currency to pay off debt and pay interest on external loans; - comparison of prices of world and national markets, as well as cost indicators of different countries, expressed in national or foreign currencies; - Periodic revaluation of foreign currency accounts of firms and banks. The exchange rate is the "price" of the monetary unit of one country, expressed in foreign monetary units or international currency units. Externally, the exchange rate is presented to the participants of the exchange as a coefficient of conversion of one currency into another, determined by the ratio of supply and demand in the foreign exchange market. However, the cost basis of the exchange rate is the purchasing power of currencies, which expresses the average national levels of prices for goods, services, investments. This economic (value) category is inherent in commodity production and expresses production relations between commodity producers and the world market. Since value is a comprehensive expression of the economic conditions of commodity production, the comparability of the national monetary units of different countries is based on the value relation that develops in the process of production and exchange. Producers and buyers of goods and services use the exchange rate to compare national prices with prices in other countries. As a result of the comparison, the degree of profitability of the development of any production in a given country or investments abroad is revealed. 61. Factors affecting the exchange rate Like any price, the exchange rate deviates from the cost basis (purchasing power of currencies) under the influence of the supply and demand of the currency. The ratio of such supply and demand depends on a number of factors. The multifactor nature of the exchange rate reflects its relationship with other economic categories - cost, price, money, interest, balance of payments, etc. The formation of the exchange rate is a complex process due to the interconnection of the national and world economy and politics. Therefore, when forecasting the exchange rate, various exchange rate factors and their ambiguous influence on the ratio of currencies are taken into account, depending on the specific economic and political situation. Among the main factors affecting the exchange rate are: - The extent to which a particular currency is used in international transactions. The higher the share of a currency in international settlements, the higher the demand for it and the higher its exchange rate against other currencies, other things being equal. - Acceleration or delay in international payments - also affect the exchange rate of currencies. In anticipation of a depreciation of the national currency, importers seek to speed up payments to counterparties in foreign currency so as not to incur losses when the exchange rate increases. When the national currency strengthens, on the contrary, their desire to delay payments in foreign currency prevails. - Monetary policy. The ratio of market and state regulation of the exchange rate affects its dynamics. The formation of the exchange rate in the foreign exchange markets through the mechanism of supply and demand of currency is usually accompanied by sharp fluctuations in exchange rates. The market develops a real exchange rate - an indicator of the state of the economy, money circulation, finance, credit and the degree of confidence in a particular currency. State regulation of the exchange rate is aimed at its increase or decrease, based on the objectives of the monetary and economic policy. For this purpose, a certain monetary policy is being pursued. 62. Factors affecting the exchange rate: inflation rate The ratio of currencies in terms of their purchasing power (purchasing power parity) reflects the operation of the law of value, so the rate of inflation affects the exchange rate. The higher the rate of inflation in a country, the lower the rate of its currency, unless other factors counteract. Inflationary depreciation of money in a country causes a decrease in purchasing power and a tendency for their exchange rate to fall against the currencies of countries where the inflation rate is lower. This trend is usually observed in the medium and long term. The dependence of the exchange rate on the inflation rate is especially high in countries with a large volume of international exchange of goods, services and capital. This is explained by the fact that the closest relationship between the dynamics of the exchange rate and the relative rate of inflation is manifested when the exchange rate is calculated on the basis of export prices. The wholesale price index is acceptable for such a calculation only for developed countries, where the structure of wholesale domestic trade and exports largely coincide. In other countries, this index does not include many exported goods. Such a calculation based on retail prices may give a distorted picture as it includes a number of non-globally traded services. Ultimately, in the world market there is a spontaneous alignment of national currency rates in accordance with real purchasing power. The real exchange rate is defined as the nominal rate (for example, the ruble against the dollar) multiplied by the ratio of price levels in Russia and the United States, respectively. This is due to the fact that international settlements are carried out by buying and selling the necessary foreign currency by participants in foreign economic relations. If the exchange rate of a currency tends to fall, then firms and banks sell it in advance to more stable currencies, which worsens the position of a weakened currency. Currency markets quickly respond to changes in the economy and politics, to fluctuations in exchange rates. Thus, they expand the possibilities of currency speculation and the spontaneous movement of "hot" money. 63. Factors affecting the exchange rate: balance of payments, interest rates, degree of confidence in the currency The state of the balance of payments has a direct impact on the dynamics of the exchange rate. An active balance of payments contributes to the appreciation of the national currency, as the demand for it from foreign debtors increases. A passive balance of payments generates a downward trend in the exchange rate of the national currency, as debtors sell it for foreign currency to pay off their external obligations. The instability of the balance of payments leads to an abrupt change in the demand for the respective currencies and their supply. In modern conditions, the influence of international capital movements on the balance of payments and, consequently, on the exchange rate has increased. The impact of the difference in interest rates in different countries on the exchange rate is explained by two main circumstances. First, a change in interest rates in a country affects, other things being equal, the international movement of capital, primarily short-term capital. An increase in the interest rate stimulates the inflow of foreign capital, and its decrease encourages the outflow of capital, including national capital, abroad. The movement of capital, especially speculative "hot" money, increases the instability of the balance of payments. Second, interest rates affect the operations of the foreign exchange and capital markets. When conducting operations, banks take into account the difference in interest rates in the national and world capital markets in order to make profits. They prefer to get cheaper loans in the foreign capital market, where interest rates are lower, and to place foreign currency in the national credit market, if interest rates are higher there. The degree of confidence in the currency in the national and world markets is determined by the state of the economy and the political situation in the country, which affect the exchange rate. The exchange rate can be affected not only by data on economic growth rates, inflation, the level of purchasing power of the currency, the ratio of demand and supply of currency, but also the prospects for their dynamics. 64. The impact of changes in the exchange rate on international economic relations Acting as an instrument of communication between the cost indicators of the national and world markets, the exchange rate plays an active role in international economic relations. When a commodity is sold on the world market, the product of national labor receives universal recognition on the basis of an international measure of value. Based on the exchange rate ratio of currencies, taking into account the share of this country in world trade, the effective exchange rate is calculated. Sharp fluctuations in the exchange rate increase the instability of international economic, including monetary and financial relations, and cause negative socio-economic consequences in individual countries. When the national currency depreciates, if other factors do not counteract, exporters receive an export premium when they exchange the proceeds of a more expensive foreign currency for a cheaper national currency and have the opportunity to sell goods at prices below the world average. As a result, exporters increase their profits by exporting goods in bulk. But at the same time, the depreciation of the national currency increases the cost of imports, which stimulates a rise in prices in the country, a reduction in the import of goods and consumption, or the development of national production of goods instead of imported ones. The depreciation of the exchange rate reduces the real debt in the national currency, increases the severity of external debts denominated in foreign currency. The export of profits, interest, dividends received by foreign investors in the currency of host countries becomes unprofitable. These profits are reinvested or used to purchase goods at domestic prices and then export them. As the exchange rate rises, domestic prices become less competitive, export efficiency falls, which can lead to a reduction in export industries and national production as a whole. Imports, on the contrary, are expanding. The influx of foreign and national capital into the country is stimulated, and the export of profits from foreign investment is increasing. The real amount of external debt denominated in depreciated foreign currency is decreasing. 65. Currency dumping The gap between external and internal currency depreciation, i.e., the dynamics of its exchange rate and purchasing power, is important for international economic relations. If the internal inflationary depreciation of money outstrips the depreciation of the currency, then other things being equal, the import of goods is encouraged in order to sell them on the national market at high prices. If the external depreciation of the currency overtakes the internal one caused by inflation, then conditions arise for currency dumping - mass export of goods at prices below the world average, associated with the fall in the purchasing power of money lagging behind the depreciation of their exchange rate, in order to force out competitors in foreign markets. For currency dumping, the following processes are characteristic: - the exporter, buying goods on the domestic market at prices that have increased under the influence of inflation, sells them on the foreign market for a more stable currency at prices below the world average; - the source of the decrease in export prices is the exchange rate difference arising from the exchange of the proceeds of a more stable foreign currency for a depreciated national one; - the export of goods on a mass scale provides super-profits for exporters. The dumping price may be lower than the production price or cost. However, too low prices are unprofitable for exporters, since competition with national goods may arise as a result of their re-export by foreign counterparties. Currency dumping, being a kind of commodity dumping, differs from it, although they share a common feature - the export of goods at low prices. But if during commodity dumping the difference between domestic and export prices is repaid mainly at the expense of the state budget, then with currency dumping it is due to the export premium (exchange difference). Commodity dumping arose before the First World War, when enterprises relied mainly on their own savings to conquer foreign markets. Currency dumping first began to be practiced during the world economic crisis of 1929-1933. 66. Purchasing power parity theory Purchasing power parity theory is based on nominalistic and quantitative theories of money. The main provisions of this theory are the assertion that the exchange rate is determined by the relative value of the money of the two countries, which depends on the price level, and the latter - on the amount of money in circulation. This theory is aimed at finding an "equilibrium rate" that would support the equilibrium of the balance of payments. This determines its connection with the concept of automatic self-regulation of the balance of payments. The most complete theory of purchasing power parity was first substantiated by the Swedish economist G. Kassel in 1918. This theory denies the objective cost basis of the exchange rate and explains it based on the quantitative theory of money. Proponents of the purchasing power parity theory argue that the equalization of the exchange rate according to the purchasing power of currencies is carried out without hindrance under the influence of factors that automatically come into play, since a change in exchange rates affects money circulation, credit, prices, the structure of foreign trade and the movement of capital in such a way that equilibrium is restored automatically. The development of state regulation revealed the inconsistency of the idea of a spontaneous market economy with its thesis of automatic restoration of equilibrium. Further development of the theory of purchasing power parity went along the line of adding additional factors that affect the exchange rate and bringing it into line with the purchasing power of money. Among them are trade and currency restrictions imposed by the state, the dynamics of credit and interest rates, etc. Purchasing power parity theory exaggerates the role of spontaneous market factors and underestimates government methods of regulating exchange rates and the balance of payments. It has become an integral element of monetarism, whose supporters exaggerate the role of changes in the money supply in the development of the economy and inflation, as well as the role of market self-regulation. 67. Theory of regulated currency The Keynesian theory of regulated currency arose under the influence of the world economic crisis of 1929-1933, when the neoclassical school, which advocated free competition and non-intervention of the state in the economy, was found to be untenable. In the 50-60s. In the XNUMXth century, Keynesianism dominated Western economics. In contrast to the theory of the exchange rate, which allowed for the possibility of its automatic alignment, on the basis of Keynesianism, the theory of regulated currency was developed, which is represented by two main directions. The theory of moving parities, or a maneuverable standard, was developed by I. Fisher and J. Keynes. The American economist Fisher proposed to stabilize the purchasing power of money by maneuvering the golden parity of the monetary unit. His project of "elasticity" of the dollar was calculated on the gold currency. Unlike Fisher, Keynes defended elastic parities for fiat money and paper money because he considered the gold standard a relic of the past. Keynes recommended depreciating the national currency in order to influence prices, exports, production and employment in the country, to fight for foreign markets. The second direction - the theory of equilibrium rates, or neutral rates, replaces purchasing power parity with the concept of "rate equilibrium". The exchange rate corresponding to the state of equilibrium of the national economy is neutral. Considering the exchange rate only as the embodiment of exchange proportions that depend on the supply and demand of the currency, supporters of the theory of neutral rates, based on the relationship of various factors, build systems of equations to assess changes in exchange rates under their influence. The theory of neutral exchange rates also emphasizes the impact on the exchange rate of factors that cannot always be measured. Among them are customs duties, currency speculation, the movement of "hot" money, political and psychological factors. 68. Theory of key currencies The historical basis for the emergence of this theory was the change in the balance of power in the world in favor of the United States on the basis of increased uneven development of countries. As a result of World War II, the United States occupied a dominant position in world production, international trade, and accumulated huge gold reserves. At the same time, the economies of most Western European countries and Japan were undermined by the war, which weakened the positions of their currencies and led to a reduction in gold and foreign exchange reserves. The essence of the theory of key currencies is based on the following provisions: 1. The need to divide all currencies into key, hard and soft, or "exotic" currencies that do not play an active role in international economic relations. 2. Assertion of the leading role of the US dollar as opposed to gold. 3. Carrying out a coordinated monetary policy of all countries with a focus on the dollar and supporting it as a reserve currency, even if this is contrary to the national interests of these countries. The continuity of the theory of key currencies with the theory of regulated currency is manifested in the fact that J. Keynes back in the early 20s. XX century advocated a world monetary system based on two regulated currencies - the pound sterling and the dollar. However, defending the interests of Great Britain, which was gradually losing its leading role in currency relations, Keynes criticized in 1923 the US desire to establish a dollar standard. The theory of key currencies reflects the policy of hegemony of the dollar as opposed to gold. This idea influenced the evolution of the world monetary system. The theory of key currencies was the rationale for the principles of the Bretton Woods system, which was based on gold and two reserve currencies and obliged the IMF member countries to carry out foreign exchange interventions in order to support the dollar. The crisis of the Bretton Woods system has shown the inconsistency of the assertions about the superiority of the dollar over other currencies. The American currency proved to be just as unstable as other national fiat money. 69. The theory of fixed rates and the normative theory of the exchange rate Supporters of the theory of exchange rates recommended establishing a regime of fixed parities of currencies, allowing them to change only in case of a fundamental disequilibrium of the balance of payments. Based on economic and mathematical models, they came to the conclusion that changes in the exchange rate are an ineffective means of regulating the balance of payments due to the insufficient response of foreign trade to price fluctuations in world markets, depending on exchange rates. This theory influenced the principles of the Bretton Woods system based on fixed parities and exchange rates. The theory of fixed rates was based on the principle of contractual parity established by states through an agreement on the exchange of currencies at a fixed rate. The crisis of the Bretton Woods system showed the inability of the theory of fixed exchange rates to cope with economic and currency crises, inflation. As a result, this led to the strengthening of the position of supporters of monetarism, who prefer freely fluctuating exchange rates. The normative theory of the exchange rate considers the exchange rate as an additional tool for regulating the economy, recommending a flexible exchange rate regime controlled by the state. This theory is called normative, since its authors believe that the exchange rate should be based on parities and agreements established by international bodies, since the exchange rate policy of one country can have a negative impact on the economies of other countries. At present, most of the ideas of the theory of floating rates have not been implemented, since it is not possible to achieve automatic balancing of balances of payments, effective protection against the spontaneous movement of speculative "hot" money, suppression of the international spread of inflation, etc. 70. The theory of floating exchange rates The essence of the theory of floating exchange rates is to substantiate the following advantages of the regime of floating exchange rates compared to fixed ones: - the possibility of automatic alignment of the balance of payments; - free choice of methods of national economic policy without taking into account external economic pressure; - curbing currency speculation, since with floating exchange rates it takes on the character of a zero-sum game: some lose what others win; - stimulation of world trade; - the assertion that the foreign exchange market is better than the state determines the exchange rate ratio of currencies. According to monetarists, the exchange rate should fluctuate freely under the influence of market demand and supply, and the state should not regulate it. Supporters of this direction believe it is possible to stabilize the economy through market regulation of the exchange rate and the transformation of floating rates into an automatic regulator of international payments. The theory of floating exchange rates has many disadvantages. The reaction of the balance of payments to changes in the exchange rate is slow, and freely fluctuating exchange rates cannot dampen speculative capital flows. The idea of a complete refusal of the state from the regulation of currency relations is unrealizable. For this reason, there are currently no foreign exchange markets in which the state does not interfere directly or indirectly. The instability of floating exchange rates undermines the confidence of economic agents, so the regime of managed floating exchange rates is preferred. Contrary to the negative approach of monetarists to foreign exchange interventions, in practice they are periodically carried out, and relatively free floating of exchange rates, based on a combination of market and state regulation, prevails. 71. Gold Coin Standard The first world monetary system spontaneously formed in the 1867th century after the industrial revolution on the basis of gold monometallism in the form of a gold coin standard. Legally, it was formalized by an interstate agreement at the Paris Conference in XNUMX, which recognized gold as the only form of world money. In conditions when gold directly performed all the functions of money, the national and world monetary systems were identical, with the difference that coins, entering the world market, were accepted as payments by weight. The Paris Monetary System was based on the following principles: 1. The basis of the monetary system was the gold standard. 2. All currencies had a gold content, according to which their gold parities were established. Currencies were freely convertible into gold. Gold was used as universally recognized world money. 3. A regime of freely floating exchange rates has taken shape, taking into account market demand and supply. If the market exchange rate fell below the parity based on their gold content, then the debtors preferred to pay off their international obligations in gold rather than in foreign currencies. The gold standard played, to a certain extent, the role of a spontaneous regulator of production, foreign economic relations, money circulation, balance of payments, and international settlements. The gold coin standard was relatively effective until the First World War, when the market mechanism was in place to equalize the exchange rate and balance of payments. Countries with a deficit balance of payments were forced to pursue a deflationary policy, to limit the money supply in circulation when gold was poured abroad. Gradually, the gold standard (in the form of gold coins) became obsolete, as it did not correspond to the scale of increased economic ties and the conditions of a regulated market economy. The First World War was marked by the crisis of the world monetary system. The gold coin standard ceased to function as a monetary and currency system. 72. Gold exchange standard The immediate cause of the emergence of the gold exchange standard was the First World War and its consequences. To finance military spending, along with taxes, loans, inflation, gold was used as world money. Exchange restrictions were introduced, and the exchange rate became coercive and therefore unrealistic. With the outbreak of the war, the central banks of the warring countries stopped exchanging banknotes for gold and increased their emission to cover military spending. After a period of currency crisis that arose as a result of the First World War, a gold exchange standard was established based on gold and the leading currencies convertible into gold. Means of payment in foreign currency, intended for international settlements, began to be called mottos. The second world monetary system was legally formalized by an interstate agreement reached at the Genoa International Economic Conference in 1922. The Genoese monetary system functioned on the following principles: 1. The basis of the monetary system was gold and mottos (foreign currencies). National credit money began to be used as international payment and reserve funds. However, during the interwar period, the status of a reserve currency was not officially assigned to any currency. 2. Gold parities were kept. 3. The regime of freely fluctuating exchange rates has been restored. 4. Currency regulation was carried out in the form of an active monetary policy, international conferences, meetings. In 1922-1928. there was a relative stabilization of the currency. But its fragility was as follows: - instead of the gold coin standard, truncated forms of gold monometallism were introduced in the monetary and currency systems; - the process of stabilization of currencies dragged on for a number of years, which created the conditions for currency wars; - stabilization of currencies in most countries was carried out with the help of foreign loans and in many cases on unfavorable terms. The functioning of the gold exchange standard was disrupted in 1929 with the onset of the global economic crisis and the subsequent World War II. 73. Bretton Woods Monetary System At the UN monetary and financial conference in Bretton Woods (USA) in 1944, the rules for organizing world trade, currency, credit and financial relations were established and the Third World Monetary System was formalized. The articles of the Agreement (the IMF Charter) adopted at the conference determined the following principles of the Bretton Woods Monetary System: 1. A gold exchange standard was introduced, based on gold and two reserve currencies - the US dollar and the pound sterling. 2. The Bretton Woods agreement provided for four forms of using gold as the basis of the world monetary system: - the gold parities of currencies were preserved, and their fixation was introduced in the IMF; - gold continued to be used as an international means of payment and reserve; - relying on its increased monetary and economic potential and gold reserves, the United States equated the dollar to gold in order to secure the status of the main reserve currency for it; - The US Treasury continued to exchange the dollar for gold to foreign central banks and government agencies at the official price established in 1934, based on the gold content of its currency (35 dollars per 1 troy ounce, equal to 31,1035 grams). 3. The exchange rate ratio of currencies and their convertibility began to be carried out on the basis of fixed currency parities, expressed in dollars. Devaluation over 10% was allowed only with the permission of the IMF. A regime of fixed exchange rates was established, and the market exchange rate could deviate from parity only within narrow limits. To comply with the limits of currency fluctuations, central banks were required to conduct foreign exchange intervention in dollars. 4. For the first time in history, the international monetary and credit organizations of the IMF and IBRD were created. Under pressure from the United States within the framework of the Bretton Woods system, the dollar standard was established - a world monetary system based on the dominance of the dollar. The dollar - the only currency convertible into gold - has become the base of currency parities, the predominant means of international settlements, the currency of intervention and reserve assets. 74. Crisis of the Bretton Woods Monetary System From the end of the 60s. XX century came the crisis of the Bretton Woods monetary system. Its structural principles, established in 1944, no longer corresponded to the conditions of production, world trade and the changed balance of power in the world. The essence of the crisis of the Bretton Woods system lies in the contradiction between the international, global nature of international economic relations and the use of national currencies subject to depreciation for their implementation. The following factors acted as the reasons for the crisis of the Bretton Woods monetary system: 1. Instability of economic development. The beginning of the currency crisis in 1967 coincided with a slowdown in economic growth. The global cyclical crisis swept the economy of Western countries in 1969-1970, 1974-1975, 1979-1983. 2. Increased inflation had a negative impact on world prices and the competitiveness of companies and encouraged speculative transfers of "hot" money. Different rates of inflation in different countries influenced the dynamics of the exchange rate, and the decrease in the purchasing power of money created conditions for "exchange distortions." 3. Instability of balances of payments. The chronic balance deficit of some countries (especially Great Britain, the USA) and the surplus of others (Germany, Japan) intensified the sharp fluctuations in the exchange rates, respectively, down and up. 4. Inconsistency of the principles of the Bretton Woods system with the changed balance of power in the world arena. The monetary system, based on the international use of national currencies subject to depreciation - the dollar and partly the pound sterling, came into conflict with the internationalization and globalization of the world economy. The principle of American-centrism, on which the Bretton Woods system was based, ceased to correspond to the new alignment of forces with the emergence of three world centers: the USA, Western Europe and Japan. The use by the United States of the status of the dollar as a reserve currency to expand its foreign economic and military-political expansion, export inflation and cover the balance of payments deficit increased interstate disagreements and contradicted the interests of developing countries. 75. Jamaican currency system The structure of the modern international monetary system was officially discussed at the IMF conference in Kingston (Jamaica) in January 1976. The basis of this system are floating exchange rates and a multi-currency standard. The transition to flexible exchange rates involved the achievement of three main goals: - equalization of inflation rates in different countries; - balancing the balance of payments; - expansion of opportunities for conducting an independent domestic monetary policy by individual central banks. The Jamaican monetary system is characterized by the following main features: 1. The system is polycentric, i.e. based not on one, but on several key currencies. 2. Monetary parity for gold has been cancelled. 3. Freely convertible currency, as well as SDRs and reserve positions in the IMF, became the main means of international settlements. 4. There are no limits to exchange rate fluctuations. The exchange rate is formed under the influence of supply and demand. 5. Central banks of countries are not required to intervene in the foreign exchange markets to maintain a fixed parity of their currencies. However, they carry out foreign exchange interventions to stabilize exchange rates. 6. The country itself chooses the exchange rate regime (fixed, floating or mixed), but it is forbidden to express it through gold. 7. The IMF monitors countries' exchange rate policies; IMF member countries should avoid manipulating exchange rates to prevent actual balance of payments adjustments or to gain unilateral advantages over other IMF member countries. An important role in the framework of the Jamaican monetary system is played by special drawing rights - SDRs. SDRs have become a measure of international value, an important reserve holding, one of the means of international official settlements. At present, all countries - members of the IMF are its members. At the same time, SDRs function only at the official, interstate level, at which they are put into circulation by central banks and international organizations. 76. Monetary policy and foreign exchange regulation In the system of regulation of a market economy, an important place is occupied by monetary policy - a set of measures taken by the state in the field of international monetary relations in accordance with the current and strategic goals of the country. One of the means of implementing monetary policy is currency regulation - regulation by the state of international payments and the procedure for conducting foreign exchange transactions; carried out at the national, interstate and regional levels. Direct currency regulation is implemented through legislative acts and actions of the executive branch, indirect - using economic, in particular, currency and credit, methods of influencing the behavior of economic agents of the market. The globalization of economic relations contributed to the development of interstate currency regulation. It pursues the following goals: regulation of the structural principles of the world monetary system, coordination of the monetary policy of individual countries, joint measures to overcome the currency crisis, harmonization of the monetary policy of the leading powers in relation to other countries. Regional currency regulation is carried out within the framework of economic integration associations, for example, in the EU, in regional groupings of developing countries. Monetary policy determines the preparation, adoption and implementation of decisions on foreign exchange problems. Regulation of currency relations includes several levels: - private enterprises, primarily national and international banks and corporations, which have huge foreign exchange resources and are actively involved in foreign exchange transactions; - the national state (Ministry of Finance, Central Bank, currency control authorities); - interstate level. At present, an absolutely autonomous national economic policy, including monetary policy, is incompatible with the development of countries' interdependence and their integration into the world economy. 77. Forms of monetary policy There are two main forms of monetary policy - discount policy and motto policy. Discount (accounting) policy is a change in the discount rate of the Central Bank, aimed at regulating the exchange rate and balance of payments by influencing the international movement of capital, on the one hand, and the dynamics of domestic loans, money supply, prices, aggregate demand, on the other. With a passive balance of payments in conditions of relatively free movement of capital, an increase in the discount rate can stimulate the inflow of capital from countries with a lower interest rate and restrain the outflow of national capital. By lowering the official rate, the central bank is counting on the outflow of national and foreign capital in order to reduce the surplus balance of payments and depreciate its currency. Motto policy is a method of influencing the exchange rate of the national currency through the purchase and sale of foreign currency by state bodies (motto). In order to increase the exchange rate of the national currency, the Central Bank sells, and to reduce it, it buys foreign currency in exchange for the national one. The motto policy is carried out mainly in the form of foreign exchange intervention, that is, the intervention of the Central Bank in operations on the foreign exchange market in order to influence the national currency rate by buying and selling foreign currency. As part of the motto policy, the following measures are also used: - diversification of foreign exchange reserves - the policy of states, banks, TNCs, aimed at regulating the structure of foreign exchange reserves by including different currencies in their composition in order to ensure international settlements, foreign exchange intervention and protection against foreign exchange losses; - the regime of currency parities and exchange rates, which is the object of national and interstate regulation; - devaluation and revaluation. Devaluation - depreciation of the national currency in relation to foreign currencies or international currency units. Its objective basis is the overvaluation of the official exchange rate compared to the market one. Revaluation - an increase in the exchange rate of the national currency in relation to foreign currencies or international currency units. 78. State currency regulation and currency control State currency regulation in the field of foreign trade provides for a set of measures and regulations established in the legislative or administrative order and aimed at regulating capital flows into and out of the country. Currency control is a set of measures carried out by the currency control authorities and aimed at ensuring foreign exchange transactions in accordance with the current regulatory framework. Currency control operations are divided into export and import. The purpose of export currency control is to control the provision of full and timely receipt of export foreign exchange earnings to the accounts of enterprises engaged in the export of goods. Import currency control involves monitoring the compliance of the amount of funds transferred for imported goods with the cost of goods actually imported into the customs territory of the country. One and the same bank servicing foreign trade transactions can carry out both export and import currency control. This provides for the existence of correspondent relations between banks, each of which serves one of the parties to the contract (exporter or importer). An important element of export-import operations in a commercial bank is that they are carried out on the basis of registration of transaction passports. The drafting of export contracts by Russian enterprises is accompanied by the opening of transaction passports in authorized banks. If the cash proceeds for the products shipped in accordance with the transaction passport are not received, then the client will be responsible to the tax and other regulatory authorities. Therefore, the latter is interested in receiving the full proceeds within the period specified in the contract. Authorized banks also open the passport of the import transaction and track the entry of the relevant goods into the country. 79. Types of currency control Depending on the time of the currency control is divided into preliminary, current and subsequent. Preliminary control by the bank over export-import operations is carried out at the stage of drawing up a transaction passport (export and import) on the basis of a contract submitted to the bank. Current control is carried out by the bank for export-import operations during the execution of the contract. If legal issues prevail in the process of preliminary control (correct execution of the contract, mandatory conditions that the contract must contain, etc.), then current control is carried out during the actual operations under the contract (transfer and receipt of funds, registration and presentation of cargo customs declaration to the bank, etc.). Some monitoring principles are common to export and import contracts. The main thing is to control the timely submission by exporters and importers of cargo customs declarations. If exporters or importers fail to meet the deadlines for submitting copies of cargo customs declarations to the bank, they are subject to a fine, which is levied upon the presentation of banks where these organizations have issued transaction passports. Another element of the current control over export-import operations by the bank is the control over the total amount of submitted cargo customs declarations. This amount should not exceed the amount specified in the transaction passport, and therefore in the contract. The excess of the amount of imported goods over the contracted amount can occur if, with a large amount of the contract, the goods are processed in small lots and at various customs posts. The situation when more goods are imported than specified in the contract is a violation of the law. The main point in the current control of export contracts is the control over the receipt of export foreign exchange earnings. Subsequent control over export-import operations consists mainly in monitoring the provision by importers and exporters of currency control documents, as well as the correctness of their completion. 80. Currency restrictions As one of the forms of monetary policy, currency restrictions are periodically used - legislative or administrative prohibition, limitation and regulation of operations of residents and non-residents with currency and other currency values. This is an integral part of currency control, which ensures compliance with currency legislation by checking the currency transactions of residents and non-residents. With currency restrictions, the process of currency control checks the availability of licenses and permits, compliance by residents with the requirements for the sale of foreign currency on the national foreign exchange market, the validity of payments in foreign currency, the quality of accounting and reporting on foreign exchange transactions. Currency restrictions as a kind of monetary policy pursue the following goals: - alignment of the balance of payments; - maintaining the exchange rate; - concentration of currency values in the hands of the state to solve current and strategic tasks. Currency restrictions are discriminatory in nature, as they contribute to the redistribution of currency values in favor of the state and large enterprises at the expense of small and medium-sized entrepreneurs, making it difficult for them to access foreign currency. Therefore, the non-monopolized sector usually opposes their introduction. Currency restrictions are usually an integral part of the policy of protectionism and discrimination of trading partners. Political motives play an important role in their implementation. In order to put pressure on other countries, the leading powers apply a currency blockade. This is an economic sanction in the form of unilateral currency restrictions of one country or group of countries in relation to another state, preventing the use of its currency values in order to force it to comply with certain requirements and aimed at undermining its monetary and economic position. The essence of the currency blockade is to freeze the currency values of this state, stored in foreign banks, and the application of discriminatory currency restrictions. 81. Exchange restrictions Currency restriction measures include: 1) regulation of international payments and capital transfers, repatriation of export earnings, profits, movement of gold, banknotes and securities; 2) prohibition of free purchase and sale of foreign currency; 3) concentration in the hands of the state of foreign currency and other currency values. Among them are also payment documents (checks, bills of exchange, letters of credit, etc.), securities denominated in foreign currency, precious metals. There are the following principles of currency restrictions that determine their content: - centralization of foreign exchange operations in the Central and authorized banks; - Licensing of foreign exchange transactions - the requirement of prior permission of the foreign exchange control authorities for the purchase by importers or debtors of foreign currency; - full or partial blocking of currency accounts; - limiting the convertibility of currencies. There are also two main areas of currency restrictions: current operations of the balance of payments and financial transactions. For current operations of the balance of payments, the following forms of currency restrictions are practiced: - blocking the proceeds of foreign exporters from the sale of goods in a given country, limiting their ability to dispose of these funds; - obligatory sale of foreign exchange earnings of exporters in whole or in part to the Central and authorized banks that have a foreign exchange license of the Central Bank; - limited sale of foreign currency to importers; - restrictions on forward purchases by importers of foreign currency; - prohibition of the sale of goods abroad in the national currency; - prohibition of payment for imports of certain goods in foreign currency; - regulation of terms of payments for export and import. Sometimes advance payments of importers to foreign exporters are controlled, limited periods are set for the exporters to exchange foreign currency for national currency so that these funds are not used for speculative operations against the national currency; - multiplicity of exchange rates - differentiated exchange rate ratios of currencies for various types of transactions, commodity groups and regions. 82. Currency clearing State intervention in the sphere of international settlements is manifested in the periodic use of currency clearing - agreements between the government of two or more countries on the mandatory mutual offset of international claims and obligations. Currency clearing differs from internal interbank clearing. Offsets for internal clearing between banks are made on a voluntary basis, and for currency clearing - on a mandatory basis. If there is a clearing agreement between countries, exporters and importers do not have the right to evade clearing settlements. The reasons for the introduction of currency clearing in the 30s. The twentieth century was characterized by economic instability, imbalance in the balance of payments of various countries, uneven distribution of gold and foreign exchange reserves, the abolition of the gold standard in domestic money circulation, inflation, currency restrictions, and increased competition. The goals of currency clearing are different depending on the monetary and economic situation of the country: - alignment of the balance of payments without spending gold and foreign exchange reserves; - obtaining a preferential loan from a counterparty with an active balance of payments; - response to discriminatory actions of another state; - irrevocable financing by a country with an active balance of payments of a country with a passive balance of payments. A characteristic feature of currency clearing is the replacement of foreign exchange turnover with foreign exchange settlements in the national currency with clearing banks, which carry out the final offset of mutual claims and obligations. Clearing is the main, but not the only, type of payment agreement. Payment agreements between states regulate various issues of international settlements, in particular, the procedure for using foreign exchange earnings, the state of the balance of payments and its individual items, the mutual provision of currencies for current payments, the regime of limited currency convertibility, etc. 83. Forms of currency clearing Forms of currency clearing are diverse and can be classified according to the following main features: - depending on the number of participating countries, unilateral, bilateral, multilateral and international clearings are distinguished; - in terms of the volume of transactions, there is a distinction between full clearing, covering up to 95% of the payment turnover, and partial clearing, covering certain transactions; - according to the method of regulating the balance of the clearing account, there are: 1) clearings with a freely convertible balance; 2) clearings with conditional conversion, for example, after a certain period after the formation of the balance; 3) non-convertible clearings, the balance of which cannot be exchanged for foreign currency and is repaid mainly by commodity deliveries. The debt limit on the clearing account balance depends on the size of the turnover and is usually fixed at the level of 5-10% of its volume, as well as on seasonal fluctuations in commodity deliveries (in this case, the limit is higher). This limit determines the possibility of obtaining a loan from a counterparty. Clearing credit is, in principle, mutual, but in practice unilateral lending by countries with a positive balance of payments to countries with a passive balance of international settlements prevails. The volumes of trade turnover and clearing almost never coincide. Various combinations are possible depending on the type of clearing. With partial clearing, the turnover exceeds the volume of clearing settlements; with full clearing - on the contrary, since the current and financial transactions of the balance of payments, including transactions with securities, go through clearing. Currency clearings have a twofold effect on foreign trade. On the one hand, they mitigate the negative effects of foreign exchange restrictions, enabling exporters to use foreign exchange earnings. On the other hand, in this case, it is necessary to regulate foreign trade turnover with each country separately, and foreign exchange earnings can only be used in the country with which a clearing agreement has been concluded. Therefore, for exporters, currency clearing is unprofitable, since instead of proceeds in convertible currency, they receive the national currency. 84. Clearing settlements within economic unions Mutual settlements of countries participating in monetary and economic unions are regulated by agreements on clearing, payments or currency union. At present, such alliances are mainly characteristic of countries with economies in transition and developing countries. The clearing agreement regulates joint operations of the participating countries on the basis of mutual offset of claims, which facilitates international settlements and saves official foreign exchange reserves. The use of clearing implies a relative balance of payments and receipts in the balance of payments of each country. However, if additional export opportunities arise, countries experience difficulties in implementing them, since exports are limited by the imports of currency clearing participants. To a certain extent, the payment union compensates for this lack of currency clearing, since the balance of operations carried out within its framework is covered by mutual bank loans or through a special fund created at the expense of contributions from member countries. The goal of a payment union of developing countries is to ensure the mutual convertibility of their currencies and mutual lending to cover the balance of payments deficit. The operations of a payment union are usually carried out through an authorized bank or a specially created fund. Unlike the clearing and payment union, the monetary union of developing countries involves closer monetary cooperation, including the creation of an interstate Central Bank to regulate monetary circulation and international settlements. In order to maintain the exchange rate of national currencies for mutual settlements, a joint fund of foreign currencies is created by combining part of the official foreign exchange reserves of the participating countries. Clearing and payment unions reduce the dependence of developing countries on foreign capital, help them collectively overcome the difficulties of development, and partly solve monetary and economic problems. 85. Balance of payments The balance of payments is the value expression of the entire complex of international economic relations of the country in the form of a ratio of indicators of export and import of goods, services, capital. The balance sheet of international operations is a quantitative and qualitative cost expression of the scale, structure and nature of the country's foreign economic operations, its participation in the world economy. In practice, it is customary to use the term "balance of payments", and the indicators of foreign exchange flows for all operations are referred to as payments and receipts. Published balances of payments cover not only payments and receipts that are actually made or are subject to immediate execution on a certain date, but also indicators of international claims and obligations. This practice is explained by the fact that the majority of transactions, including trading operations, are carried out on a credit basis. In addition to the balance of payments, which contains information about the movement of value flows between countries, a balance of international assets and liabilities of the country is compiled, reflecting its international financial position in stock categories. It shows at what stage of integration into the world economy the country is. It reflects the ratio of the value of loans received and provided by the country, investments, and other financial assets. Indicators of the international financial position and balance of payments are interconnected. According to the economic content, the balance of payments differs on a certain date and for a certain period. The balance of payments for a certain date cannot be fixed in the form of statistical indicators; it exists as a day-to-day ratio of payments and receipts. The balance of payments for a certain period (month, quarter, year) is compiled on the basis of statistical indicators of foreign economic transactions made during this period and allows you to analyze changes in the country's international economic relations, the extent and nature of its participation in the world economy. 86. Equilibrium of the balance of payments, structure of the balance of payments Balance of payments indicators for a certain period are associated with aggregate indicators of economic development (gross domestic product, national income, etc.) and are subject to state regulation. The state of the balance of payments for a certain period is closely related to the state of the national currency in the long term, the degree of its stability or the nature of changes in the exchange rate. From an accounting point of view, the balance of payments is always in equilibrium. But in its main sections, there is either a surplus if receipts exceed payments, or a passive balance if payments exceed receipts. Therefore, the methods of compiling the balance of payments and measuring the balance of payments play an important role in the correct analysis of indicators characterizing the country's foreign economic operations. The indicators of the balance of payments in statistical data are often given without explaining their economic content, despite the fact that these indicators in individual years may fundamentally differ in their economic content and it is incorrect to compare them with each other in absolute value. The term "balance" is used in international payments relations to express a number of concepts, including a balance sheet account, balance or account balance, account balance, balance sheet balance, etc. Therefore, the balance of payments is not only the account of a country's international transactions, the two sides of which balance each other each other, but also a certain state of these operations, including the qualitative and structural characteristics of its main elements. The structure of the balance of payments consists of the following main sections: - trade balance, i.e. the ratio between the export and import of goods; - balance of services and non-commercial payments; - the balance of current transactions, including the movement of goods, services and unilateral transfers; - balance of movement of capitals and credits; - transactions with official foreign exchange reserves. 87. Balance of trade and balance of services Historically, foreign trade is the original form of international economic relations, linking national economies into a single world economy. Thanks to foreign trade, an international division of labor is formed, which deepens and improves with the development of foreign trade and other international economic transactions. The ratio of the value of exports and imports of goods forms the balance of trade. The economic significance of a trade deficit or surplus in relation to a particular country depends on its position in the world economy, the nature of its relations with other countries and the general economic policy. For countries lagging behind the leaders in terms of economic development, an active trade balance is necessary as a source of foreign exchange funds to fulfill their international obligations. The balance of services includes payments and receipts for transportation, insurance, electronic, telegraph, telephone, postal and other types of communications, international tourism, the exchange of scientific, technical and industrial experience, expert services, the maintenance of diplomatic, trade and other missions abroad, the transfer of information , cultural and scientific exchanges, various commission fees, advertising, fairs, etc. Services are a dynamically developing sector of world economic relations, its role and influence on the volume and structure of payments and receipts is constantly increasing. According to the rules adopted in world statistics, the "Services" section includes payments and receipts of income on investments and interest on international loans, although in terms of economic content they are closer to the movement of capital. The balance of payments also singles out items for the provision of military assistance to foreign states, military spending abroad and unilateral transfers from one country to another (mainly through economic assistance and contributions to international organizations). These items are also adjacent to the balance of services items. 88. Balance of payments, balance of movement of capital and loans Services transactions, investment income flows, military transactions and one-way transfers are called "invisible" transactions, since they do not relate to the export and import of goods, that is, tangible values. The current account balance of payments includes the trade balance and "invisible" transactions. Some balance of payments methodologies single out unilateral government transfers as a separate item and do not include it in the current account balance. These transactions began to be called current in order to separate world trade in goods and services from the international movement of financial resources in the form of capital and loans. The balance of movement of capital and loans expresses the ratio of export and import of public and private capital, granted and received international credits. According to the economic content, these operations are divided into two categories: the international movement of entrepreneurial and loan capital. Entrepreneurial capital includes foreign direct investment (acquisition and construction of enterprises abroad) and portfolio investment (purchase of securities of foreign companies). Direct investment is the most important form of export of long-term capital and has a great impact on the balance of payments. They do not create debt because they mean the purchase of property. As a result of these investments, international production develops, which integrates national economies into the world economy at a higher level. The international movement of loan capital is classified on the basis of urgency: 1. Long-term and medium-term operations include public and private loans and credits granted for a period of more than one year. 2. Short-term operations include international loans for up to a year, current accounts of national banks in foreign banks (assets), the movement of money capital between banks. 89. Factors affecting the balance of payments The balance of payments gives an idea of the country's participation in the world economy, the scale, structure and nature of its foreign economic relations. The balance of payments reflects: - Structural disproportions of the economy, which determine different export opportunities and the need to import goods, capital and services; - changes in the ratio of market and state regulation of the economy; - market factors (degree of international competition, inflation, exchange rate changes, etc.). A number of factors affect the state of the balance of payments: 1. Uneven economic and political development of countries, international competition. The evolution of the main items of the balance of payments reflects changes in the balance of power of various states in the world economy. 2. Cyclical fluctuations in the economy. Fluctuations, ups and downs in economic activity in the country find expression in the balance of payments, since its foreign economic operations depend on the state of the domestic economy. 3. The growth of foreign government spending, which pursue a variety of economic and political goals. 4. Militarization of the economy and military spending. The indirect impact of military spending on the balance of payments is determined by their impact on the conditions of production, economic growth, and the extent to which resources are withdrawn from civilian sectors that could be used for investment, in particular, in export industries. 5. Strengthening international financial interdependence, which, in turn, increases currency and credit risks. 6. Changes in international trade. 7. Negative impact of inflation on the balance of payments. This happens if the increase in prices reduces the competitiveness of national goods, makes it difficult to export them, encourages the import of goods and contributes to the "flight" of capital abroad. 8. Extraordinary circumstances - crop failure, natural disasters, catastrophes, etc. - adversely affect the balance of payments. 90. Balance of payments regulation The balance of payments is one of the objects of state regulation. This is due to several reasons. First, balances of payments are inherently unbalanced, manifested in long-term and large deficits in some countries and excessive surpluses - other's. The instability of the balance of international payments affects the dynamics of the exchange rate, the migration of capital, the state of the economy. Secondly, after the abolition of the gold standard in the 30s. Since the XNUMXth century, the spontaneous mechanism for equalizing the balance of payments through price regulation is currently operating extremely weakly. Therefore, the alignment of the balance of payments requires targeted government measures. Thirdly, in the context of the globalization of economic relations, the importance of the balance of payments in the system of state regulation of the economy has increased. The task of its regulation is included in the circle of the main tasks of the economic policy of the state, along with ensuring the pace of economic growth, curbing inflation and unemployment. The material basis for regulating the balance of payments is: - official gold and foreign exchange reserves; - national income redistributed through the state budget; - direct participation of the state in international economic relations as an exporter of capital, creditor, guarantor, borrower; - regulation of foreign economic operations with the help of regulations and state control bodies. State regulation of the balance of payments is a set of economic, including foreign exchange, financial, monetary and credit measures of the state aimed at the formation of the main items of the balance of payments, as well as covering the existing balance. There are certain methods of regulating the balance of payments, aimed either at stimulating or restricting foreign economic operations, depending on the monetary and economic situation and the state of the country's international settlements. 91. Adjustment of the balance of payments deficit Countries with a deficit balance of payments usually take the following measures to stimulate exports, curb the import of goods, attract foreign capital, and limit the export of capital. 1. Deflationary policy. Such a policy aimed at reducing domestic demand includes limiting budgetary spending mainly for civilian purposes, freezing prices and wages. One of its most important tools are financial and monetary measures: reducing the budget deficit, changing the discount rate of the Central Bank, credit restrictions, limiting the growth of the money supply. 2. Devaluation. The depreciation of the national currency is aimed at stimulating exports and curbing imports of goods. However, the role of devaluation in regulating the balance of payments depends on the specific conditions for its implementation and the accompanying general economic and financial policies. Devaluation stimulates the export of goods only if there is an export potential of competitive goods and services and a favorable situation on the world market. Raising the cost of imports, devaluation can lead to an increase in the production costs of domestic goods, an increase in prices in the country and the subsequent loss of the competitive advantages gained with its help in foreign markets. 3. Currency restrictions. Blocking foreign exchange earnings of exporters, licensing the sale of foreign currency to importers, concentrating foreign exchange transactions in authorized banks are aimed at eliminating the balance of payments deficit by limiting the export of capital and stimulating its inflow, and curbing the import of goods. 4. Financial and monetary policy. To reduce the balance of payments deficit, budget subsidies to exporters, protectionist increases in import duties, the abolition of taxes on interest paid to foreign holders of securities for the purpose of capital inflow into the country, monetary policy, especially accounting policy and money supply targeting, are used. 5. Special measures of state influence on the balance of payments in the course of the formation of its main items. 92. Trade balance regulation An important object of regulation is the trade balance. In modern conditions, state regulation covers the sphere of not only circulation, but also the production of export goods. Stimulation of exports at the stage of selling goods is carried out by influencing prices (providing tax and credit benefits to exporters, changing the exchange rate, etc.). To create a long-term interest of exporters in the export of goods and the development of foreign markets, the state provides targeted export loans, insures them against economic and political risks, introduces a preferential regime for depreciation of fixed capital, and provides them with other financial and credit benefits in exchange for the obligation to carry out a certain export program. In the context of increased competition in world commodity markets, special attention is paid to the regulation of export production by deepening intra-industry specialization and cooperating national firms with foreign ones. In order to deepen international specialization, the state stimulates the export activities of small and medium-sized firms. Measures are being taken to increase the role of agricultural exports, and the expansion of the sale of machinery and equipment is also encouraged. The state strongly orients enterprises to foreign markets, creating advantages for them and transferring resources to export production from industries that produce products for the domestic market. State regulation of exports extends to all stages of the movement of goods - from studying a foreign market to after-sales service abroad. Export promotion methods are being applied more and more comprehensively. They include currency, credit, financial, organizational forms of support for exporters, including advertising, information support, and training. With a passive balance of payments, imports are regulated by reducing them and developing national production of goods in order to replace imports. 93. Migration and export of capital The export of capital is the movement of capital abroad in order to obtain additional profit through the use of local production, material and labor resources. The modern world economy and international economic relations are characterized by increased exports and capital migration. The process of intensifying the export of capital is currently determined by the following factors: - the development of the world market and the participation of an increasing number of countries in it; - further concentration and centralization of capital in national economies; - overaccumulation of capital in the national capital markets of industrialized countries; - the interest of individual countries in the inflow of foreign capital due to the lack of domestic financial resources. The main form of capital export is the export of capital, carried out in the form of investments in industry, trade, and transport. At the same time, direct investments (investments) are distinguished, which give the right to control the enterprise, and portfolio ones, which provide only participation in the activities of the enterprise, and not control. The form of income can be profit from the activities of the enterprise or profit in the form of dividends. The second form of capital export is the export of loan capital, which differs in terms (short-term, long-term), form (commercial, banking), nature of collateral (secured, unsecured) and subject. The export of loan capital can be carried out in the form of international loans for various periods provided by both the private sector and states, as well as in the form of investments in securities (stocks and bonds). An international short-term loan acts in the form of a commercial, bank loan, as well as current accounts in foreign banks. The main exporters of capital are industrialized countries, and the main importers are developing countries, states with economies in transition. 94. Relationship between international production and export of capital International production refers to the production of goods and services with the participation of foreign entrepreneurial capital in the form of direct and portfolio investments. Direct investments include investments in companies in the amount of at least 10% of the share capital, which give the right to economic entities of other countries to exercise a significant influence on the formation of the board of directors and the management of the company's production activities. Foreign investments in securities that do not provide the right of control are classified as portfolio investments. International production is determined by a number of indicators, including the volume of accumulated foreign direct investment (FDI), their dynamics and relative values. The export of IPK increased sharply in the 80-90s. XX century. Opportunities for increased outward investment were created by the increased openness of national markets. Technological advances in the field of transport and communications, as well as in the dissemination of information, contribute to the strengthening of the international activity of companies. This has expanded the scope for international production by medium-sized companies. As a result, the volume of IPC, as well as the number of transnational companies, increased significantly. The main exporters of productive capital are TNCs from developed countries. The share of only five countries - the USA, Japan, Great Britain, Germany, France - accounts for 60-70% of the export of foreign direct investment. The export of capital is carried out not only by the leading developed countries, it is also exported from the most economically developed countries of Asia and Latin America (Brazil, India, Mexico). The largest companies in these countries export capital in order to expand their areas of activity, use labor resources or scientific and technological achievements of the host countries. Since the mid 70s. large volumes of capital are exported from the countries of the Near and Middle East - major oil exporters. 95. Impact of the IPC on the functioning of the world economic system The movement of foreign direct investment (FDI) and the international production based on them are the basis for the internationalization of the entire circulation of capital within the world economy. International production raises the level of international socialization of labor in material, technical, economic and legal aspects. Thus, international production is a system that strengthens internal ties in the world economy. The profit strategy of multinational companies is based on the use of differences in national systems of economic regulation. In order to reduce the damage, states strive to smooth out differences in national tax, customs, credit and other areas, as far as possible, which expands the basis for interaction between capital-exporting and capital-importing countries. The movement of entrepreneurial capital and the development of international production create an asymmetry in the economic power and influence of individual countries and regions. The transfer of production abroad leads to the fact that the shares of individual regions in the location of world production and in control over it do not coincide. The companies of the leading developed countries control more production facilities than those located in their national territories. Therefore, the actual balance of power between developed and developing countries is far from corresponding to the size of GDP and industrial production. The latter do not reflect the fact that GDP includes products that, although created in these states, actually belong to other countries. Accounting for the scale of foreign production introduces noticeable adjustments to the ideas about the real positions of countries in the modern world economy. Countries leading in terms of economic power can ensure the sustainability of their development at the expense of economically weaker partners 96. International funding International financing is an economic relationship that arises on the basis of the provision and receipt of capital necessary for the reproduction of profits, forming a system of transactions with foreign assets and settlements on them, in which residents of several countries participate. The structure of international financing is considered by market entities (institutions or institutions) and market instruments. Under the instruments, or goods of international capital markets, is understood any financial requirement, designated in foreign currency (currency, bonds, shares, bills of exchange, etc.). Some of the instruments are securities certifying loan relationships. The other part is titles of ownership, confirming the owner's participation in the ownership of the enterprise (mainly shares). The third part of the instruments is a derivative of the first two and insures these transactions. These are derivatives, the economic basis of which is stocks, bonds, and not real capital. Market instruments are certain forms of capital movement. The main forms of capital movement are loan capital (international bonds, bank loans, etc.), entrepreneurial capital (portfolio and direct investment - shares), as well as economic assistance. The bulk of financial resources operate in the form of loan capital, which is capital in cash and commodity forms, presented on the basis of urgency, repayment and payment. In the structure of loan capital, the leading place is occupied by bonded loans. There is also a division of capital according to the forms of ownership - private and state capital. Economic assistance occupies a leading place in the movement of state capital. Until the mid 70s. XX century, financial transactions were closely linked with the development of production and foreign trade. At present, they are largely self-developing, loosely linked to the material economy. 97. Centers for international financing The fulfillment of the international function of redistribution and the movement of capital is more characteristic of countries and territories where preferential regimes for regulating the financial activities of non-residents have been created to attract capital from foreign banks and companies. Credit institutions specializing in transactions with foreign legal entities and individuals carry out them on the basis of special (external) accounts, separated from the accounts of residents of the domestic market and providing the holders of these accounts with tax rebates, exemption from currency control and other benefits. Thus, the domestic capital market is isolated from the external - international one, and credit institutions located on the territory of the country and engaged in international operations are not an integral part of its economy. While staying in the receiving territory, they conduct transactions external to it with non-residents, and in some cases with residents, if the latter is allowed by the rules of currency control. Therefore, these centers of international financing are called offshore, that is, extraterritorial. Until the middle of the XNUMXth century, a developed national banking system, a large stock exchange and a stable monetary unit were necessary for the emergence of an international financial center. In recent decades, it is most often sufficient to have flexible financial legislation, the right to open foreign banking branches and branches, the absence of income tax or its preferential nature, simplification of the procedure for conducting exchange and banking operations, etc. Now, along with such traditional extraterritorial centers as New York, London, Tokyo, Paris, Zurich, Singapore, Hong Kong, Bahrain, Cyprus, Panama and others play an important role in international financial markets. Despite the emergence of new centers of international financing, New York, London and Tokyo hold the leading position. At the same time, the United States is the world center of financial activity and largely determines the dynamics and structure of international financial transactions. 98. Characteristics of the international capital market The modern international capital market took shape by the early 60s. XX century. According to the urgency of the mobilized funds, it is divided into the market of short-term capital, or the money market, and the markets of medium-term and long-term capital, which make up the capital market. International money markets include deposit and loan transactions from one day to one year. Medium-term loans cover a period of up to five to seven years. The differences between short-term and medium-term loans are gradually losing their significance, as in practice short-term loans are converted into medium and long-term loans. The market for short-term loans is the fastest growing sector of the global financial system. International transactions usually involve foreign exchange transactions for at least one of the parties involved in the transaction. Operations with foreign currency form the foreign exchange market, so the money market operates in close connection with the foreign exchange markets. Many currency transactions are purely financial, speculative in nature. This is facilitated by both the system of state management of the exchange rate, common in many countries of the world, and the practice of margin (collateral) trading in the foreign exchange markets, when it is not necessary to deposit money in the amount of the full value of the contract to conclude a transaction. In addition to the money and foreign exchange markets, there is also a stock market, which differs in that it attracts funds through the issuance of securities of various types and durations. It is divided into markets for bonds, stocks, commercial bills and other securities. They belong to the primary market. An important role in its composition is played by the segment of international bonds. As a source of medium-term and long-term capital, it exceeds the volume of transactions with shares by several times. The secondary market has been developed, in which an important place is occupied by the market of financial derivatives, or financial risk trading instruments. The prices of these instruments are linked to another financial or real asset. 99. International credit relations In the sphere of international economic relations, credit relations arise in the following cases: - in connection with lending to foreign trade; - as a result of the movement of loan capital within the world market; - in connection with international settlements. Foreign trade lending includes export and import lending. The significance of lending lies in accelerating the circulation of capital between the exporter and importer, i.e., its transformation from a commodity form into a monetary one. The lending process is carried out on the basis of commercial and bank loans. One of the varieties of credit relations is an international loan, which is divided into private, public and private-public. The main providers of loan capital at present are commercial and investment banks. The growth in the scale of operations of transnational companies requires their constant lending and investment services, the main share of which was also taken over by transnational commercial and investment banks. At the same time, the activities of corporations and banks are not always effective. In some cases, these institutions are engaged in currency speculation, transfer short-term capital ("hot" money) from one country to another, receive additional profit due to high interest rates, conduct speculative transactions with securities, especially derivatives, which undermines the stability of the capital market. and foreign exchange markets. Along with private international credit, there are also intergovernmental loans. Interstate loans are usually provided at the expense of the state budget or funds of specialized state and semi-state banks. In addition to these forms of credit, it should also be noted the international loan provided by the IMF to stabilize the economic situation of various countries facing economic problems, as well as World Bank loans to finance various socio-economic projects, which is usually carried out on a parity basis with the country - the recipient of the loan. 100. Importance of international credit International credit is the movement of loan capital in the sphere of international economic relations, associated with the provision of foreign exchange and commodity resources on the terms of repayment, urgency and payment of interest. Lenders and borrowers are private enterprises (banks, firms), government agencies, governments, international and regional monetary and financial organizations. International credit was one of the levers of primitive capital accumulation. The objective basis for its development was the expansion of production beyond the national framework, the strengthening of the internationalization of economic ties, the international socialization of capital, the specialization and cooperation of production, scientific and technological revolution. International credit participates in the circulation of capital at all its stages: - when converting money capital into production capital by acquiring imported equipment, raw materials, fuel; - in the process of production in the form of crediting for work in progress; - when selling goods on world markets. The sources of international credit are the part of the capital temporarily released from enterprises in the process of circulation in cash, as well as the cash savings of the state and the private sector, mobilized by banks. The objective need for an international loan in the course of the reproduction process arises due to the action of the following factors: - features of the circulation of funds in the economy; - features of production and sale; - differences in the volume and terms of foreign economic transactions; - the need for simultaneous large investments in order to expand production. Although international credit mediates the movement of goods, services, capital in external circulation, the movement of loan capital outside national borders is relatively independent in relation to goods produced at the expense of borrowed funds. This is due to the need to repay the loan, as well as the use of the loan for non-commercial purposes. 101. Principles and functions of international credit The connection between international credit and reproduction is manifested in the following principles: 1. Loan repayment. If the funds received are not returned, then there is an irretrievable transfer of money capital, i.e. financing. 2. The principle of urgency ensures the repayment of the loan within the terms established by the loan agreement. 3. The principle of payment reflects the operation of the law of value and is a way to implement differentiated loan conditions. 4. The material security of the loan is manifested in the guarantees of its repayment. 5. The target nature of the loan - the definition of specific objects of the loan, its application, primarily in order to stimulate the export of the creditor country. The principles of international credit express its connection with the economic laws of the market and are used to achieve the current and strategic objectives of market entities and the state. International credit performs the following functions, reflecting the specifics of the movement of loan capital in the field of international economic relations: 1. Redistribution of loan capital between countries to meet the needs of expanded reproduction. Through the mechanism of international credit, loan capital rushes to those areas that are preferred by economic agents in order to ensure profits. 2. Saving distribution costs in the field of international payments by developing and accelerating non-cash payments, replacing cash foreign exchange turnover with international credit operations. On the basis of international credit, credit means of international settlements arose - bills of exchange, checks, as well as bank transfers, certificates of deposit, etc. Saving time for the circulation of loan capital increases the time for the productive functioning of capital, ensuring the expansion of production and profit growth. 3. Accelerating the concentration and centralization of capital. Thanks to the attraction of foreign loans, the process of capitalization of surplus value is accelerated, the boundaries of individual accumulation are pushed apart, the capitals of entrepreneurs in one country increase by adding funds from other countries to them. 102. The role of international credit in the development of production The positive role of international credit is to accelerate the development of productive forces by ensuring the continuity of the reproduction process and its expansion. International credit helps to accelerate the reproduction process in the following areas: 1. Credit stimulates the country's foreign economic activity. This creates additional demand in the market to maintain the situation. Foreign trade on credit has become an international norm, especially for goods with a long production cycle, consumption and high cost. In the context of rising prices for products and an increase in the share of machinery and equipment in world trade, importers and exporters are interested in using foreign trade credits. The construction of enterprises abroad is also carried out at the expense of a loan used to pay for imported equipment, especially technological and energy equipment. 2. International credit creates favorable conditions for foreign private investment, as it is usually associated with the requirement to provide incentives to investors in the creditor country; is used to create the infrastructure necessary for the operation of enterprises, including foreign and joint ventures; contributes to strengthening the positions of national enterprises, banks associated with international capital. 3. The loan ensures the continuity of international settlement and currency transactions serving the country's foreign economic relations. 4. Credit increases the economic efficiency of foreign trade and other types of foreign economic activity of the country. The negative role of international credit is to exacerbate the objective contradictions inherent in a market economy. First of all, disproportions in the structure of the economy are deepening. International credit speeds up the overproduction of goods, redistributing loan capital between countries and facilitating an abrupt expansion of production during periods of economic recovery. International credit increases the disproportions in social reproduction, facilitating the development of the most profitable industries and delaying the development of industries that do not involve foreign capital. 103. Forms of international credit The main forms of international credit can be classified according to several main features that characterize certain aspects of credit relations. According to the sources of credit, domestic, foreign and mixed lending and financing of foreign trade are distinguished. These forms of credit are closely interconnected and serve all stages of the movement of goods from the exporter to the importer. According to the purpose of the loan, there are: - commercial loans directly related to foreign trade and services; - financial loans used for any other purpose, including direct investment, construction of investment facilities, purchase of securities, repayment of external debt, foreign exchange intervention; - "intermediate" loans intended for servicing mixed forms of export of capital, goods and services, for example, in the form of contract work. According to the form of granting a loan, there are commodity loans provided mainly by exporters to their customers, and foreign currency loans issued by banks in cash. In some cases, a foreign currency loan is one of the terms of a commercial transaction for the supply of equipment and is used to credit local costs for the construction of a facility based on imported equipment. The loan currency distinguishes between international loans provided in the currency of the debtor or creditor country, in the currency of a third country, and also in international currency. By terms, international loans are divided into short-term (up to 1 year), medium-term (from 1 to 5 years), long-term (over 5 years). In terms of collateral, secured and unsecured loans are distinguished. Goods, documents of title and other commercial documents, securities, bills of exchange, real estate and valuables usually serve as collateral. The pledge of goods for obtaining a loan is carried out in three forms: a solid pledge (a certain commodity mass is pledged in favor of the bank); pledge of goods in circulation (the balance of goods of the corresponding assortment for a certain amount is taken into account); a pledge of goods in processing (products can be made from the pledged goods, but on condition that they are pledged to the bank). 104. Commercial loan Trade credit is a loan made by a firm, usually an exporter, in one country to an importer in another country in the form of a deferred payment. A commercial loan is usually issued by a promissory note or provided on an open account. A bill of exchange credit provides that the exporter, having concluded an agreement on the sale of goods, issues a bill of exchange (draft) to the importer, who, having received commercial documents, accepts it, i.e., agrees to pay within the period indicated on it. Open account credit is provided by an agreement between the exporter and the importer, under which the supplier writes to the buyer's account as his debt the cost of goods sold and shipped, and the importer undertakes to repay the loan within the prescribed period. An open account loan is practiced with regular deliveries of goods with periodic repayment of debts in the middle or end of the month. A variety of corporate loans is an advance payment by the importer, which, upon signing the contract, is made by the importer in favor of a foreign supplier, usually in the amount of about 30% of the delivery cost. An advance payment serves as one of the forms of international settlements and export credits and at the same time a means of securing the obligation of a foreign buyer, since the importer must accept the ordered goods. If the contract is not fulfilled due to the fault of the person who provided the advance, it is subject to return minus losses, in contrast to the deposit, which in this case is lost. If the contract is not fulfilled due to the fault of the person who received the deposit, then he is obliged to return it with coverage of losses to the buyer. Although a company loan expresses the relationship between a supplier and a buyer, it is usually combined with a bank loan. When selling expensive machinery and equipment, a commercial loan is usually provided for a long period, so the exporter is forced to resort to bank loans or refinance his loan from banks. 105. Bank loan Bank lending for exports and imports takes the form of loans secured by goods, commodity documents, bills of exchange. Sometimes banks provide large exporting firms with which they are closely associated with a blank loan, that is, a loan without formal collateral. Bank loans in international trade have advantages over commercial loans. They enable the recipient to use funds more freely for the purchase of goods, freeing him from the need to apply for a loan to supplier firms. A bank loan is provided by banks, banking houses, and other credit institutions. To coordinate operations for lending to foreign economic operations, mobilize large credit resources and evenly distribute risk, banks organize consortiums, syndicates, banking pools. Banks provide export and financial loans. An export credit is a loan issued by a bank in an exporting country to a bank in an importing country for lending to the supply of machinery, equipment, etc. Bank loans are issued in cash and are "tied" in nature, since the borrower is obliged to use the loan exclusively for the purchase of goods in creditor country. Financial credit allows you to purchase goods in any market and, therefore, on the most favorable terms. Often, a financial loan is not related to the supply of goods and is intended, for example, to pay off external debt, support the exchange rate, replenish accounts in foreign currency. Large banks provide acceptance credit in the form of draft acceptances. In this case, the exporter agrees with the importer that the payment for the goods will be made through the bank by accepting the latter drafted by the exporter. One of the forms of export crediting is an acceptance-reimbursement credit based on a combination of acceptance of the exporter's bills by the bank of a "third country" and transfer (reimbursement) of the bill by the importer to the accepting bank. 106. Interstate loans The following forms of long-term (for a period of 10-15 years or more) interstate loans are distinguished at the expense of appropriations from the state budget. 1. Bilateral government. On a large scale, interstate long-term credit originated during the First World War and developed in the postwar period. During the Second World War, intergovernmental loans did not play a significant role. Deliveries of military and other materials were carried out mainly on the terms of "lend-lease" (for rent) without credit obligations. 2. Loans from international and regional monetary and financial organizations. 3. In the line of providing assistance, which, along with technical assistance, gratuitous gifts, subsidies, includes loans on preferential terms. Often a mixed type of international credit is practiced, for example, the usual forms of export credit are combined with the provision of assistance. A new form of international lending has become the so-called co-financing of large projects by several credit institutions, mainly in the infrastructure sectors. The initiators of joint financing are international financial institutions that involve private commercial banks in these operations, usually lending on preferential terms (below market interest rate) the most profitable part of the project. Two forms of co-financing are practiced: - parallel financing, in which the project is divided into component parts, credited by different creditors within the quota established for them; - co-financing, in which all lenders provide loans during the implementation of the project. One of the lenders (bank manager) coordinates and controls the preparation and implementation of the project. Joint financing provides certain benefits to the borrower, opening him access to soft loans. But the main beneficiaries are lenders, since such lending provides an additional guarantee of timely repayment of the loan by the debtor and increases the dependence of developing countries on creditors. 107. Project finance Project financing is a modern form of long-term international lending. The specifics of project financing lies in the fact that the main stages of the investment cycle are interconnected and fall within the competence of a certain banking syndicate headed by a bank manager. The bank organizing project financing distinguishes six stages of the investment cycle: 1. Search for objects for investment. 2. Estimation of profitability and risk of the project. 3. Development of a credit scheme. 4. Conclusion of interconnected agreements with project financing participants. 5. Implementation of the production, commercial and financial program until the full repayment of loans. 6. Evaluation of the financial results of the project and their comparison with the planned indicators. Therefore, project financing is a type of bank lending to investment projects, in which the lender takes on part or all of the risks associated with their implementation. In this case, the loan is repaid exclusively or mainly at the expense of income from the implementation of the project; assets related to the investment project can serve as additional collateral. A loan is usually provided to a special structure established for the implementation of the project - a project company. Thus, if in ordinary lending operations the bank attaches paramount importance to studying the borrower's credit history, assessing its financial and economic situation, including the assessment of property used as collateral, then project financing focuses on project analysis. The object of the analysis is the project documentation (primarily the feasibility study of the project), and the purpose of such an analysis is to substantiate the financial and economic efficiency of the investment project, identify sources of financing, assess risks, etc. 108. International leasing Leasing is a commercial operation in which the lessor provides material assets to the lessee for rent. A leasing transaction can be concluded in respect of any property, including buildings, structures, equipment, vehicles and other movable and immovable property that can be used for business activities. There are two main types of leasing in the leasing services market: financial and operational (operational). Under financial leasing is understood the lease of property with subsequent redemption. Operating lease, on the other hand, does not involve the purchase of property after the expiration of the lease agreement. At the same time, the lessee avoids the risks of using the equipment, since the object of the leasing transaction remains the property of the lessor. Based on the characteristics of the organization of relations between the lessee and the lessor, direct and indirect leasing are distinguished. Direct leasing takes place when the manufacturer or owner of the property himself acts as a lessor, and indirect leasing takes place when leasing is carried out through a third party. According to the method of lending, fixed-term and renewable leasing are distinguished. In case of urgent leasing, a one-time lease is carried out, and in case of renewable (rollover) leasing agreement is renewed after the expiration of the first term of the agreement. International leasing operations affect the state of the balance of payments. Lease payments paid to foreign leasing companies increase the country's external expenditures, and their receipts positively affect the balance of payments. Acquisition of property after the end of the leasing agreement is tantamount to import. In this regard, international leasing operations have become the object of state regulation. Despite the assistance of the state, the development of international leasing encounters difficulties due to intense competition in the world market, inconsistencies in national legislation, methods for calculating lease payments, taxation systems, etc. 109. International factoring Factoring is one of the forms of international credit in the form of the purchase by a specialized financial company of the exporter's monetary claims against the importer and their collection. By advancing funds to the exporter before the due date of the importer's payment requirements, the factoring company actually provides credit to the exporter. The amount of the loan varies from 70 to 90% of the amount of the invoice, depending on the creditworthiness of the client. The remaining 10-30%, after deducting the interest for the loan and commission for services, are credited to the exporter's account after the date of payment by the importer for the delivered products in accordance with the contract. Thanks to factoring services, the company does not deal with scattered buyers, but with a factoring company that regularly sends account statements to its client, receiving a fee for services. The company charges a predetermined commission (0,5-2% of the client's turnover) depending on the reliability of customers, the type of services, the quality of debt requirements, as well as interest on loans for these requirements. Interest for a factoring loan is usually 2-4% higher than the official discount rate, providing high profits for factoring companies. Despite the relative high cost, the exporter is interested in factoring, as it is accompanied by collection, trust and other services. The factoring agreement increases the creditworthiness of the exporting firm and makes it easier for it to obtain a loan from a bank. Factoring companies carefully check the acquired claims in terms of the solvency of the buyer with the help of their reference departments and banks. In addition to credit and accounting and control operations, factoring companies provide legal, warehouse, information, and advisory services. They have considerable information about world markets. This is facilitated by close business ties between factoring companies and banks, which are usually the initiators of their creation and provide them with financial support. Factoring is most beneficial for large exporting firms with a solid clientele, significant deferred payments for clients and insufficient cash. 110. International Forfaiting In banking practice, forfeiting means the purchase by a forfeiter on predetermined terms of bills and other debt obligations of the exporter. At the same time, the buyer of claims assumes all commercial risks without the right of recourse (turnover) of these documents to the exporter. The forfaitor acquires debt claims minus interest for the entire duration of the debt. Thus, the export transaction turns from a credit into cash, which is beneficial for the exporter. Bills are discounted at a fixed rate indexed to LIBOR or to the rate of a certain country. The size of the discount (discount) depends on the risk of non-payment, payment currency, term of the bill, etc. Thus, export forfaiting is a non-recourse accounting of the exporter's claims against a foreign importer for a predetermined amount. Forfaiting complements traditional methods of foreign trade lending and state export credit insurance, as it involves additional risks. For this reason, the forfaitor prefers debtors from countries with a high international rating. Forfeiting as a form of lending to foreign trade gives some advantages to the exporter: early receipt of foreign currency earnings in cash; improvement of liquidity indicators; its partial release from receivables; non-payment risk insurance; savings on managing debt claims, etc. Forfaiting differs from leasing in that it is easy to document and non-recourse (i.e. the exporter does not bear the risk of default by the importer). Unlike export factoring, which is used for future transactions that are not yet fully determined, forfeiting is used for existing international obligations, and for a longer period, and materialized in the form of bills, as well as with a wider scope of risk coverage (non-payment, currency risk, etc.). d.). 111. Financial crises The development of world monetary and credit relations is accompanied by outbreaks of financial crises. Before the formation of the world economy, financial shocks covered the national systems of individual countries. In the twentieth century, they began to acquire an international character. To a large extent, financial crises have become a reflection of ongoing structural changes in the world economic system. The possibilities of financial crises are embedded in the nature of the forms of capital movement and in the functioning of the market. Transactions in the capital markets mean financing future value that has yet to be created. Therefore, cash flows serve the "expectations" of future income during the real gap between the actual (advanced) and future value (profit). This is due to the fact that in the financial market the requirements for the ownership of financial assets (instruments) are documented long before the property that can generate income appears. Claims are drawn up between a large number of market participants, who are often involved in many financial transactions simultaneously. The gap between future earnings and the search for liquidity poses a threat to the risk of non-repayment of funds to the creditor. Since the risk insurance system is imperfect, a gap in one link causes the disruption of many other transactions, often leading to crises in national and international markets. The international financial crisis is understood as a disruption in the functioning of the credit and financial systems in a number of countries, leading to sharp disproportions in the international monetary and credit systems and to the instability of their functioning. The financial crisis usually, to one degree or another, simultaneously covers various areas of the global financial system. The center of financial crises is money capital, and the immediate sphere of manifestation is credit institutions and public finances. 112. Forms of manifestation of financial crises The financial crisis includes the following phenomena: - landslide drop in exchange rates; - a sharp increase in interest rates; - withdrawal by banks in mass order of their deposits in other credit institutions, restriction and termination of the issuance of cash from accounts (banking crisis); - destruction of the normal settlement system between companies through financial instruments (settlement crisis); - monetary crisis; - debt crisis. Many factors determine the emergence and development of financial crises. Typically, the condition of financial crises are violations in the ratio of different types of assets in certain parts of the financial system. The widespread use of information technology leads to the fact that crises that arise in national financial markets quickly acquire an international character. In recent decades, the internal prerequisites for financial crises have been superimposed by external ones, associated with huge capital flows crossing borders, which can undermine the financial position of the country due to the weakening of state regulation. The internationalization of the movement of capital, the development of offshore operations, the decline in the regulatory role of the state have increased the possibility of purely speculative activities in the global financial system. These include operations aimed at extracting excess profits through the deliberate use of financial indicators (exchange rate, stock prices, discount rates). Financial crises are a reflection of the instability of world economic development, its hierarchy, as well as structural imbalances in the field of mobilization and placement of capital, management of foreign exchange reserves in crisis countries. The most important reason for the emergence of financial crises is the massive attraction of foreign loan capital, especially in the short term. Financial crises show the need to restructure the global financial system, introduce greater openness, improve reporting, and strengthen national economic policies. 113. Demographic development of the world The demographic situations that develop in individual countries and regions largely affect the state and prospects of their economic and social development, the alignment of economic and political forces on a regional and global scale. Demographic development consists of long periods of evolution and relatively short qualitative shifts or periods of demographic transition and demographic revolutions. The demographic transition is understood as a change in the types of population reproduction. It coincides with the transformation of the pre-industrial system of productive forces into an industrial one. The demographic revolution is an integral part of the demographic transition. The term "demographic revolution" or "population explosion" means an unprecedentedly high rate of natural population growth, which exceeds the growth rate of previous decades. The population explosion is a consequence and manifestation of the process of modernization of the traditional type of population reproduction, during which the demographic balance is maintained due to extremely high birth and death rates. A characteristic feature of this order is the rapid change of generations, barely surviving to 40 years. The transformation of the traditional type of natural reproduction began with a decrease in mortality. By the middle of the XNUMXth century, mankind began to have effective and relatively cheap means of combating mass diseases, which led to a sharp decrease in mortality. The demographic transition in the industrialized countries of the West ended in the 50s. XX century. Improved living conditions have increased life expectancy, reduced fertility and increased the proportion of older people. At present, in many developing countries, improvements in health and well-being, which can lead to a significant increase in life expectancy and a decrease in child mortality, will play a more important role in reducing population growth than in Western countries. 114. Population growth and economic growth There are several approaches to the analysis of the relationship between population growth and economic development. One of them proceeds from the fact that rapid population growth reduces the growth of savings and savings, increases the growth of the labor force and makes it difficult to use it, lowers the quality of labor resources due to lower education and health spending, weakens technical innovation, reduces the amount of resources per person and, ultimately, slows the growth of GDP per capita. Historically, this approach is associated with the theory of the English priest and economist T. Malthus, who contrasted two factors - population and natural resources. In his writings, he argued that population growth, if it is not limited, tends to increase exponentially, while the supply of food tends to increase only in arithmetic progression. Having postulated the boundless and unchanging desire of people to reproduce, T. Malthus interpreted demographic growth as an independent variable, which is only corrected by the action of "destructive" (wars, epidemics, famine) and "precautionary" (celibacy, etc.) social factors. Since the beginning of the XNUMXth century, the Malthusian "trap" has often been used to show that population growth creates a problem for humanity due to the lack of food, raw materials and habitat. Accordingly, the central problem for mankind is the question of how to get out of this situation. Another approach is that demographic factors act as a function of social and economic development. This approach is consistent with the provisions of A. Smith, who believed that population growth can accelerate economic development, contributing to technical innovation. Wealth may lead to an increase in the number of children, but the use of their labor may cover the cost of their maintenance and education. At the same time, wealthy people tend to have fewer children, while poverty is often accompanied not only by high birth rates, but also by high death rates. 115. Use of labor force, unemployment The situation in the labor markets is determined by the peculiarities of socio-economic development, changes in the technological base of production, and the demographic situation in a given country. New technologies affect the change in the structure of demand for labor. At the present stage in developed countries, the demand for labor is provided primarily by the non-productive sector, the employment dynamics in which is determined by the rapid expansion of consumer spending and higher labor intensity. The service sector gives in Western countries from 80 to 100% increase in employment. At the same time, the share of employment in industry is declining, reflecting faster growth in labor productivity. According to the definition of the International Labor Organization (ILO), the unemployed are those who are unemployed, actively looking for one and ready to start working within a specific period. This definition includes the underemployed, involuntary unemployment and those in temporary circumstances. Recording of the unemployed is carried out through household surveys, registration of the unemployed or registration of unemployment payments. Many countries use a method of registration in which the unemployed are those who are registered with the state labor bureaus for the purpose of looking for work and do not have one at the time. There are significant differences between countries in the way in which the unemployed are registered. Unemployment is the result of structural changes in the economy and has a long-term character. Unemployment has become the main factor in increasing the instability of the socio-economic situation of individual states. In many countries, it has acquired severe forms, becoming chronic. Unemployment is a serious problem as it has direct economic, social and psychological consequences. It potentially reduces the production of GDP, and for the unemployed leads to a direct loss of income and makes it necessary to look for alternative material support. Socially, unemployment deepens inequality in society. 116. Features and types of international migration A great influence on the size and composition of the population of countries, their labor force is exerted by external migration, i.e., emigration and immigration, or, accordingly, the departure of the able-bodied population from a given country and entry into it. External migrations have played and are playing a multifaceted role in the development of mankind, acting as a form of adaptation of a person to the changing conditions of his existence. As a result of international migration, a commodity of a special nature moves abroad - labor power. Its fundamental difference from other factors of production lies in the fact that it itself is a factor in the production of other factors, the creator of surplus value. The following types of international migration are distinguished: irrevocable, temporary-permanent (from one to six years), seasonal, pendulum (daily, weekly moving to work in a neighboring country). International migration is caused by reasons of economic and political, military order. The former are more or less permanent in nature, the latter are associated with critical political events in individual countries, as well as with wars that give rise to forced migrants - refugees, displaced persons. The main role in the modern international movement of the population is played by labor migration. Its scale is constantly growing, and almost all countries are involved in this process. International labor migration has acquired a large scale and is becoming a typical phenomenon in the socio-economic life of the modern world. The possibility of international labor migration is created by national differences in incomes and living standards. The labor force moves from countries rich in labor resources to countries richer in capital. More than half of international migrants come from developing countries, two thirds of them migrate to industrialized countries. The influx of new masses of migrants to developed countries is associated with qualitative disproportions in the labor markets of various countries. 117. Socio-economic consequences of labor migration The emigration of labor resources is the movement of the most valuable factor of production. Households, local administrative units, states invest heavily in their creation. Migration does not produce a corresponding return to the countries that leave. Most often, as a result of emigration, countries lose the most qualified labor force, and the resulting vacancies are replaced by less trained workers, which affects the efficiency of production. Migration of the labor force, based on differences in levels of economic development, at the same time contributes to the weakening of a number of problems of the countries of emigration. In particular, for some particularly small countries, emigrants' remittances play an important role as a source of their foreign exchange earnings. Remittances stimulate domestic demand, which can lead to increased output and employment. In the social sphere, the positive effect of migration is usually associated with an increase in the well-being, if not of the entire society, then at least of some part of it. The introduction of temporary migrants to more advanced technologies used in countries of immigration, higher standards of work ethics can also have a positive impact. The international migration of labor resources has little effect on the redistribution of income in the world economy and, moreover, on equalizing the levels of economic development. The labor force is still an immobile factor of production compared to capital, which moves more freely in the world economic system. The overall effect of international migration for exporting countries is much lower than those in trade and capital flows. Migrant remittances account for only over 1% of global merchandise exports. Such a situation is predetermined by the policy, first of all, of industrial countries, which has a pronounced immigration character. 118. Economic growth and scientific and technological progress The use of world production resources finds its quantitative and qualitative expression in economic growth. Economic growth acts as a result of the interaction of factors of production and external conditions - economic, political, social. Production and economic growth can be stimulated by investment. They increase and modernize the means of production through innovations and technical changes that not only improve labor productivity, but also create competitive advantages for new products and services. Scientific and technological progress, which affects all elements of the productive forces, has a great influence on economic growth and the structure of the world economy. Technological progress in some cases involves the process of innovation, while it is assumed that new production technologies provide the output of existing goods and services using less capital and labor. In other cases, it involves updating a product, creating a new product, or improving the qualities of an old product. Scientific and technological progress can also be understood as an increasing amount of technical and managerial knowledge used in production and marketing. Part of this knowledge is embodied in machines, the other - in human skills, management methods, organizational structures. Technological progress is often viewed as an independent factor in increasing production. Technological improvement leads to several interrelated effects, which can be divided into neutral, labor-saving and capital-saving. The labor-saving effect leads to a reduction in production costs in labor-intensive industries, and the capital-saving effect in capital-intensive industries. The neutral effect provides a simultaneous increase in both factors of production. 119. Impact of modern technologies on economic growth Advances in technology affect economic growth in several ways: - improvement of technology allows the national economy to increase output at the same level of costs by increasing the productivity of production factors; - modern technologies contribute to economic growth through the production of new goods with higher added value and higher income elasticity; - the influence on the economic growth of scientific and technical and educational and qualification potentials is increasing. Innovations and related processes of management and improvement of the quality of the labor force provide a decisive contribution to economic growth; - scientific and technological progress leads to major changes in the objects of labor. Among them, a huge role is played by various types of synthetic raw materials that have desired properties that do not exist in natural materials. They require significantly less labor costs for processing. Therefore, the current stage of scientific and technical progress relatively reduces the role of natural materials in economic development and weakens the dependence of the manufacturing industry on mineral raw materials; - under the influence of scientific and technological progress, changes in the means of labor occur. In recent decades, they are associated with the development of microelectronics, robotics, information and biotechnology. Information technology makes it possible to mechanize the service sector. The use of electronic technology in combination with machine tools and robots has led to the creation of flexible production systems in which all operations for the machining of a product are performed sequentially and continuously. Flexible production systems significantly expand the possibilities of automation, they are able to quickly adapt to the production of new product models, including small-scale production. Their use significantly increases labor productivity as a result of increasing the utilization rate of equipment and reducing the time spent on auxiliary operations. 120. The concept of sustainable development In 1987, the International Commission on Environment and Development, established by the UN General Assembly, put forward the concept of sustainable development, which is based on the idea of environmentally friendly development. It covers not only the issues of environmental protection, but also a number of other problems: financial, social, demographic. Thus, sustainable development involves meeting the needs of society without prejudice to future generations and requires the resolution of a number of interdependent problems. Sustainable development can only be achieved through political and economic means. Changing the direction of the world economy towards sustainable development requires fundamental reforms at the international and national levels. In 1992, the UN Conference on Environment and Development in Rio de Janeiro adopted the Declaration on Sustainable Development. It affirms new principles of environmental quality management and economic development, notes the inextricable link between socio-economic development and environmental conservation, emphasizes the impossibility of solving environmental problems in isolation, in isolation from the general process of development of human civilization. Most countries have signed the Convention on Climate Change and the Convention on Biological Diversity. Industrialized countries were tasked with reducing greenhouse gas emissions to 1990 levels. In subsequent years, international conferences concretized and expanded the scope of environmental regulation. An intensive increase in industrial production within the framework of the economic growth model existing on an international scale leads to a sharp differentiation in the standard of living of the Earth's population and is accompanied by enormous damage to the natural environment. The new development model should be based on the common interests of the world community with the goal of more balanced growth and environmental protection. Author: Smirnov P.Yu.
▪ Analysis and diagnostics of financial and economic activity. Crib
Artificial leather for touch emulation
15.04.2024 Petgugu Global cat litter
15.04.2024 The attractiveness of caring men
14.04.2024
▪ section of the site Stories from the life of radio amateurs. Selection of articles ▪ article Grab fate by the hair. Popular expression ▪ article digger. Standard instruction on labor protection ▪ article Cane and flowers. Focus Secret
Home page | Library | Articles | Website map | Site Reviews
www.diagram.com.ua |
We recommend interesting articles Section 
See other articles Section 
Latest news of science and technology, new electronics:
All languages of this page