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Trade, Financial Systems, and Economic Policies

The document discusses global trade and economic policies, emphasizing the importance of international trade, trade policies, and the impact of foreign aid on economic growth. It highlights the mixed effects of foreign aid, the challenges associated with it, and the relationship between political risk and economic stability. Key factors influencing these dynamics include governance quality, policy alignment, and the role of institutions in fostering a stable economic environment.

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Zack Alasow
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13 views17 pages

Trade, Financial Systems, and Economic Policies

The document discusses global trade and economic policies, emphasizing the importance of international trade, trade policies, and the impact of foreign aid on economic growth. It highlights the mixed effects of foreign aid, the challenges associated with it, and the relationship between political risk and economic stability. Key factors influencing these dynamics include governance quality, policy alignment, and the role of institutions in fostering a stable economic environment.

Uploaded by

Zack Alasow
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Trade, Financial

Systems, and Economic


Policies
Global Trade and
Economic Policies
Aisha Ahmed Mohamed
Global Trade and Economic
Policies
• Global Trade Definition
Global trade, also known as international trade:, is simply the import and export of goods and
services across international boundaries

• Imports and Exports


A product that is sold to the global market is called an export, and a product that is bought from
the global market is an import. Imports and exports are accounted for in the curren payments.

international trade and its importance?


International trade is the exchange of goods between nations. International trading is important
because it gives different countries the chance to get different products from local and
international markets.
trade policy is a government policy that affects the number of goods and services a country exports
and imports.
Free trade is when there are no government restrictions on trade.
Protectionism is when governments set trade restrictions to help domestic industries
International Trade Policy
• International trade policy refers to the regulations and
agreements governing the exchange of goods and services
between countries. It plays a crucial role in shaping global
trade dynamics and can have significant impacts on
energy consumption, greenhouse gas emissions, and other
related factors.
• Tariffs are taxes on imports to make foreign products
more expensive (and less competitive) than they would
otherwise be. Tariffs are often used to support domestic
producers, but they can also be levied punitively against
countries that carry out unfair economic and trade
practices.
ECONOMIC POLICY

• Economic policy covers a wide range of measures which governments use to


manage their economy. These include monetary policy (money supply and
demand), taxation, budget, job creation,
• the Treaty on European Union sets out the EU’s aims, which include balanced
economic growth, price stability, and economic and monetary union
• Treaty on the Functioning of the European Union (TFEU) gives the EU exclusive
responsibility for monetary policy for EU countries which belong to the euro area.
• Article 5 TFEU sets out that economic policies should be coordinated within the
Union.
Cont..….
The Effect of Foreign
Aid on Economic
Growth
Iman Abdirahman Abdi
Positive Effects &Negative Effects

1. Positive Effects
Promoting Political Stability and Governance
Macroeconomic Stability
2. Negative Effects
Weakening of Governance and Accountability
Inflationary Pressure
3. Empirical Evidence: Mixed Results
Studies with Positive Findings
Studies with Negative Findings
4. Key Factors Influencing Aid Impact
• Governance Quality
• Policy Alignment
• Sector-Specific Targeting
Alternative Approaches to Foreign Aid &
Challenges in Foreign Aid
1. Alternative Approaches to Foreign Aid
• South-South Cooperation
• Developing countries helping each other by sharing resources, knowledge, and expertise.
• Private Sector Partnerships
• Encouraging private investment through public-private partnerships (PPPs) to complement traditional aid.
• Aid for Trade
• Linking foreign aid to improving trade capacities, helping countries integrate better into global markets.
2.Challenges in Foreign Aid
• Corruption and Mismanagement
• Misallocation of aid due to corruption or lack of accountability.
• Aid Dependency
• The risk of countries becoming too dependent on aid, undermining long-term self-sufficiency.
• Political and Strategic Motivations
• Donor countries sometimes use aid for political leverage or strategic interests rather than development.
Conclusion
• Mixed Impact of Foreign Aid
• The relationship between foreign aid and economic growth is complex, with both positive and negative
effects.
• Aid Effectiveness Depends on Context
• Success depends on factors such as governance, policy alignment, and the targeting of aid to priority
sectors like infrastructure, education, and health.
• Future Directions
• More emphasis on sustainable development, capacity building, and reducing dependency. Greater focus
on integrating the private sector and encouraging South-South cooperation.
Political Risk and
Economic Stability
Salad Musse Ali
Political Risk and Economic
Stability
•Welcome to our deep dive on the intricate relationship
between political risk and economic stability.
•Explore how political factors influence economic
growth, investment, and the overall well-being of
nations.
Defining Political Risk and its
Impact on the Economy
Political Risk Economic Impact
Political risk refers to the potential impact of Political instability can lead to reduced investment,
political events on businesses and investment. disrupted trade, currency fluctuations, and economic
uncertainty.
Factors Influencing Political
Stability
Governance
Effective governance, rule of law, and democratic institutions
1
are essential for political stability.

Institutions
2 Strong institutions provide a framework for fair
competition, transparency, and economic
development.

Social Dynamics
3 Social cohesion, trust, and a sense of fairness
contribute to a stable political environment.
Assessing and
Mitigating Political
Risk
Risk Assessment Diversification
Conducting thorough Spreading investments
research on political across multiple countries
factors, including to reduce exposure to
elections, social specific political risks.
m ov ement s , and
policy changes.

Insurance Local Partnerships


Securing political risk Collaborating with local
insurance to mitigate partners to understand
potential losses due the political landscape
to political events. and navigate potential
challenges.
Economic Implications of
Political Instability
Investment
1 Political instability discourages foreign and domestic investment due to
uncertainty and potential risks.

Trade
2 Political turmoil can disrupt supply chains, increase tariffs,
and hinder international trade.

Growth
Political risk hampers economic growth by
3
reducing productivity, innovation, and overall
confidence.
Conclusion

Political risk remains a critical factor in assessing economic stability.


Understanding its historical context helps investors and policymakers
navigate the complexities of a rapidly changing global landscape.,
As we move forward, the interplay between political decisions and
economic outcomes will continue to shape the investment climate
worldwide.
Understanding both political risk and economic stability is crucial for
investors, policymakers, and businesses.
They must assess these factors to make informed decisions and develop
strategies to mitigate risks while capitalizing on potential opportunities.

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