International Politics.

Presented by : M.Amir Sohail Roll # 59

Political System: A political system is basically of politics and government in a country. It governs a complete set of rules regulations institutions and attitudes.

Changing political system

The political environment of countries is critical concern for the international marketers.

International law recognize the right of nation to allow or deny the foreign firm to do the business.

Political Factors Effecting on IBPolitical and legal differencesPolitical and legal forcesTrade and investment RestrictionsRestraining ForcesGovernment policies and restrictionsPolitical environment.

Examples Of Changing Political Systems

USSR:The economy of USSR is moving from command economy advocated by the communist ideology to the market driven economy.

China: China is realizing that it must walk a fin line b/w commitment to its current philosophy and the need to attract the outside investment. It wants to attract foreign capital to ensure that is economic engine continues to work efficiently.

Political Ideologies and Economics

Ideology:A set of integrated beliefs, theories and doctrines that helps to direct the actions of a society is called ideology.

Types of Ideologies:The ideologies that help to explain the nations economic policies are given belowPolitical SystemsEconomic Systems.

Political Systems:1) Democracy: A system of government in which the people either directly or through their elected officials decide what is to be done.

Features Of Democracy:Right to express opinions freelyElection of representatives for limited terms of office Independent court system that protects individual

property and rightsRelatively non-political bureaucracy and defense

infrastructure.

Political Systems:2) Totalitarianism:

A system of government in which one individual or party maintains complete control and either refuse to recognize other parties or suppresses them.

Types Of Totalitarianism:There are many types of totalitarianism, out of which three main types are given belowCommunismTheocratic TotalitarianismSecular Totalitarianism

Political Systems:Communism:

A political system in which the government owns all property and makes all decision regarding production and distribution of goods and services.

Theocratic Totalitarianism:A system of governance in which a religious group exercises total power and repress or persecutes non-orthodox factions.

Secular Totalitarianism:A system of governance in which the military controls everything and makes decision which it deems to be in the best interest of the country.

Economic Systems There are three basic system, ( capitalism, socialism

and mixed). For the purpose of analysis we classify the system in

terms of

a) Resource Allocation (market driven v/s centrally determined) b) Property Ownership ( private v/s public)

Economic SystemsMarket-Drive Economy:

An economy in which goods and services are allocated on the basis of consumer demand.

Centrally Determined Economy: An economy in which goods and services are allocated based on a plan formulated by a committee that decides what is to be offered.

Economic SystemsMixed Economy:

Economic systems characterized by a combination of market and centrally driven planning.

Govt. Control Of AssetsThe process of selling government assets to private buyers.

Privatization:

Contract management:A process by which and organization transfers operating responsibility of an industry without transferring the legal title and ownership.

Govt. Control Of AssetsReasons for Privatization:

More efficient to have the goods and services provided by private business than by government

Change in political culture brings about a desire to sell off these assets The company is making money and the govt. feels that there is more to

be gained by selling now than by holding on the purchase price can be used to reduce the national debt Company is losing money and govt. has to assume the losses out of the

national treasury The company needs research and development funds in order to

maintain a competitive stance International funding agencies are making assistance to the country

conditional on reduction in the size of govt.

Govt. Control Of Assets

Reasons for Nationalization: Promoting economics development Earning profits for national Treasury Preventing companies from going bankrupt and closing their

doors Enhancing programs that are in national interest Increasing the political or economic control of those in power Ensuring goods and services to all citizens regardless of their

economic status

Nationalization:A process by which the government takes control of business assets, Sometimes with remuneration of the owners and other times without such remuneration.

Economics Integration Economics Integration is the establishment transnational rules and regulation that enhance economic and cooperation among countries.