...PETRODOLLARS AND ASIAN DOLLAR Introduction: A petrodollar is a United States dollar earned by a country through the sale of its petroleum to another country. The term was coined in 1973 by Georgetown University economics professor, Ibrahim Oweiss, who recognized the need for a term that could describe the dollar receiving by petroleum exporting countries (OPEC) in exchange for oil. The term, petrodollar, should not be confused with petrocurrency which refers to the actual national currency of each petroleum exporting country. It is the money that oil exporters receive from selling oil and then deposit into Western banks. Petrodollars refers to the money that Middle Eastern countries and members of OPEC receive as revenue from Western nations and then put back into those same nations' banks. For example if Libya were to receive money from the U.S. for oil and then put the money into a U.S. bank, that deposited money is referred to as petrodollars. We use the International Monetary Fund’s definition of oil exporters—those countries that currently derive the bulk of their export revenues from sales of fuel. Norway has been added because last year the country derived roughly 53 percent of export revenues from oil. Origin of petrodollar phenomenon: The Organization of the Petroleum Exporting Countries (OPEC) was founded in Baghdad, Iraq, with the signing of an agreement in September 1960 by five countries namely Islamic Republic of Iran, Iraq, Kuwait, Saudi Arabia and Venezuela...
Words: 1509 - Pages: 7
...countries such as Bangladesh in a number of ways. Firstly, it supplements domestic investment which is low due to lack of resources in these countries. Secondly, FDI is expected to generate employment, transfer, increase domestic competition and bring other positive externalities such as transfer of good practices. Bangladesh offers attractive investment opportunities to foreign investors and has adopted policies to attract FDI into the country. In fact Bangladesh seems to offer one of the most liberal FDI regimes in South Asia. The economic model was developed based on the past behavior of GDP and the external sector. It indicated that FDI is the sector having the most significant impact on GDP and aid the second most significant. While imports negatively affect economic growth, exports have played a very important role over the period. During the 1990s, notable progress was made in economic performance. Along with maintaining economic stabilization with a significantly reduced and declining dependence on foreign aid, the economy appeared to begin a transition from stabilization to growth. In the 1980s, per capita GDP had grown slowly at the rate of about 1.6 per cent per...
Words: 9177 - Pages: 37
...Introduction to Balance of payments The Balance of Payments (BOP) is a measure of all the financial transactions flowing between one country and all other countries during a specific period, usually a quarter or a year. It is also the name of the official record of these transactions. A positive, or favorable, balance of payments is one in which more payments have come in to a country than have gone out. A negative or unfavorable balance means more payments are going out than coming in. The BOP is a major indicator of a country's status in international trade, and a reflection of its economic well-being or vulnerability. The balance of trade is one component of the balance of payments. It is also a sign of the productiveness of a people and a reflection of whether they are primarily producers or consumers. Producing nations grow while consuming nations eventually deplete their resources and collapse as fewer people are able to access them. IMF Definition The IMF definition: "Balance of Payments is a statistical statement that summarizes transactions between residents and nonresidents during a period. The balance of payments comprises the current account, the capital account, and the financial account. "Together, these accounts balance in the sense that the sum of the entries is conceptually zero." The current account consists of the goods and services account, the primary income account and the secondary income account. The financial account records transactions that...
Words: 7239 - Pages: 29
...domestic currency which is caused by the demand for foreign currency exceeding its supply in the market. In such a situation one has to pay more than before to get units of foreign currency. This fall takes place in the market and on its own. Market determined exchange rate serves the purpose of aligning the domestic economy with the world economy was the price route. As consequences the domestic price gets linked up with those of the world price. With the liberalizations and globalization of the economy in recent years, imports are bound to increase. The lessening of restrictions on imports and lowering of tariff on imports which the economic reform implies, an increase in imports has in fact taken place. Again with trade having become an important element of the new strategy of growth. As per the basic laws of economics if the demand for USD in India exceeds its supply then it’s worth will go up and that of the INR will come down in that respect. It may be that importers are the major entities who are in need of the dollar for making their payments. Likelihood here could be that the Foreign Institutional Investors are retreating their investments in the country and taking them elsewhere. This can create a shortfall in supply of the dollar in India. This state of affairs can only be addressed by exporters who can bring in dollars in the system. If by some means the FIIs can be wooed back, then this imbalance can also be addressed to...
Words: 2290 - Pages: 10
...Foreign Trade in 2nd and 3rd Plan Development of Complex Regime Episode of trade Liberalization Economic Growth and Policy Framework of Foreign Trade Foreign Trade Policy Reforms after 1991‐92 Service Sector and Reform Export‐Import Growth Scenario Commodity Composition of Export and Import Basket Factor Intensity Analysis of Exports Factor Intensity Analysis of Imports Structural Weakness of India’s Foreign Trade Stability of India’s Comparative Advantage Rise of Service Sector Exports Relationship Between Economic Growth and Export Growth Relationship Between Trade and Employment Can India Skip Industrialization Phase? Conclusions List of Tables 1 2 3 4 5 Indicators of Long‐Term Indian Economic Performance, 1950‐2010 (Average annual growth) India’s Exports, Export Growth and Share in GDP Trade and Capital Account Balances (Million $) Evolution of India’s Trade Balances (Rs. Crores) SEZ Exports and India’s total Exports: A Comparison ~ ii ~ 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Exports, Imports, Trade Balance and Growth Rates for 1950‐51 to 1969‐70 (value in million US$ & percentages) Exports and Imports in 1970s and 1980s (Exports and Imports in million $ & growth in %) Export, Import and Balance Payments from 1990‐91 to...
Words: 33180 - Pages: 133
...impact on GDP. It involves economic models developed to determine the impact of each sector-Export, Import, Foreign Aid and Remittance, on GDP of Bangladesh. It also involves an analysis of the behavior of these factors in three SAARC countries and the application of the regression model developed. The economic model was developed based on the past behavior of GDP and the external sector. It indicated that Remittance is the sector having the most significant impact on GDP and aid the second most significant. While imports negatively affect economic growth, exports have played a very important role over the period. The remittance of Bangladesh has been increasing over the last few years. Hence, its impact on GDP has also been rising. In the span of 34 years export as percentage of GDP increased from 2.2% to 15.4%. Hence, performance was moderately good. The economy has been suffering from ever increasing trade deficits, despite several export promotional measures. Large import payments mainly account for this problem. Foreign aid shows large fluctuations over the period Finally, an analysis was conducted on the behavior of the external sectors in the SAARC countries using the regression model. Export was found to be the dominant sector in India, while imports had the minimum impact on GDP. Pakistan was found to be more dependent on export and foreign aid than on remittance and import. Sri Lanka’s economy is highly correlated to remittance, aids and export. 1 Literature Review ...
Words: 12238 - Pages: 49
...with recovery of growth in industry sector and the satisfactory performance of service sector. During this period, higher growth in revenue mobilisation and prudent budget management helped maintain macroeconomic stability and discipline in fiscal front. Furthermore, the increasing global demand for goods and services after recovery has helped achieving higher growth in foreign trade, while soaring global food and non-food prices has created inflationary pressure in the country. Alongside adopting various administrative and structural measures, monetary policy instruments have also been used to reduce the inflationary pressure. Moreover, slower growth in remittance inflows and higher import demand due to massive investment in infrastructure sector including the power sector, the current account balance and exchange rate was under pressure during the last quarter of FY2010-11. However, this situation did not emerge as a big challenge to the macroeconomic stability. The foreign exchange reserve remained steady at above US$ 10 billion during this period. Overseas job replacement and remittance inflows rebounded since January 2011. It is expected that, improved infrastructure and streamlined power sector would be conducive to domestic and foreign investment, which will lead the country to the higher growth trajectory.] Global Economic Scenario The world has come out of the recession of 2007-2009 stronger than anticipated. However, the recovery is marked by...
Words: 7602 - Pages: 31
...SPAIN COUNTRY REPORT 1. SPAIN – COUNTRY OVERVIEW Country Administrative information Official Country Name Kingdom of Spain Capital Madrid Government Parliamentary monarchy President of the government (current) Jose Luis Rodriguez Zapatero Demographic Factors Population (2010) 46,030,109 Median age 40.5 years Religion Predominantly Roman Catholicism Economic indicators Currency Euro(EUR) Real effective exchange rate index Base: 2005(100) Inflation rate 3.5% (As of May 2011) GDP per capita (2010) 30,782(US$ at PPP) Unemployment rate (2010) 20.1% Real GDP growth (2010) -0.1% 2...
Words: 3941 - Pages: 16
...rising prices for breeds, cars, haircut, rising wages, rent etc. Onwukwe (2003), on his side defines inflation as “a significant and sustained rise in the general price level or a declining value of the monetary units. The problem created by the rising prices of goods and services has become two difficult for government to solve. During inflationary period, fixed amounts of money buy less quantity of goods and services. The real value of money is drastically reduced i.e the purchasing power of consumers are reduced. The Impact of rapid inflation growth has led the federal government of Nigeria to adopt several sexual measures of inflation control. Paramount among these measures are monetary and credit policies formulated restore balance of payment to a health; position price and way policies formulated to check the growth of price and income. Inflation growth became more intensified since later eighty’s, inflation rate was...
Words: 4162 - Pages: 17
...Gradient Alliance M ont hly Bullet in: M arc h 2 0 1 6 In Economic news: • Sri Lanka to borrow another USD 3bn as govt runs out of options to bridge fiscal deficit. • Taxes galore as govt struggles to make ends meet. • Sri Lanka hit by Fitch downgrade and S&P lowering of outlook. • Sri Lankan economy grows a slow 4.8% in 2015. • Minimum wages for private sector workers comes into effect. • Port City back on, its official. • Sri Lanka happier in 2015, rises to 117th in the Happiness Index. • Inflation rises 1.7% YoY in February. • Rupee in March at 142.59/146.78 vs. USD (down 0.08% MoM). • Stock market closes at 6,071.88 in March (-11.9% YTD). In Business news: • Tourist arrivals up 19.4% YoY in Feb 2016 to 197,697 as China replaces India as the premier tourist sourcing location. In Consumer news: • Nielsen consumer confidence index falls to 65 (-5 pts MoM). • Vehicle registrations falls 25.4% YoY in Feb 2016. • Tea production drops to 22.9m kgs in Feb 2016. • CPC continues to make losses but LIOC rakes in mega profits; as Sri Lankan Airlines’ going concern nose dives. • Business sentiment index at 16 month low, 138 in Feb 2016.(-13 pts MoM). • Prima wheat flour prices increased. • Nestlé launches “out of home’ beverage provider. • Body Shop comes to Sri Lanka. Gradient Alliance M ont hly Bullet in: M arc h 2 0 1 6 In Economic news: Sri Lanka to borrow another USD 3bn as govt runs out of options to bridge fiscal deficit. The ...
Words: 4890 - Pages: 20
...Chapter 1 INTRODUCTION: GLOBALIZATION AND INTERNATIONAL TRADE We live in a world that is highly interconnected by a bewildering array of complex economic transactions, social and environmental problems, and international political collaborations and conflicts. Examples from global economics are found in the news everyday. A decision by American policymakers to subsidize the production of ethanol, a form of gasoline containing an additive produced from corn, is seen by many as a key reason that grain prices are high around the world. The spectacular emergence of China as a major exporter of manufactured goods has affected wages in both rich and poor countries. As large corporations, such as Microsoft, Intel, Toyota, General Electric, and Siemens have expanded their investments in affiliates in many nations around the world, they have built global production networks that share technological knowledge across locations to produce increasingly complex goods that could be sold anywhere. Today, a major cultural product, such as a Hollywood movie or a jazz band’s latest compact disk, is likely to employ creative personnel from around the world, with various components of the product recorded, mixed or edited in different locations. The importance of international connections in trade, investment, and skilled services can be illustrated by considering the apparently simple act of making and bringing to market an item of apparel, say a fashionable woolen men’s suit. The initial task...
Words: 10241 - Pages: 41
...insightful. We have tried our level best to prepare an effective & creditable report. The report contains detail description upon Inflation and the Price inflation in Bangladesh. Here we have gathered information through different sources. I honestly hope that this analytical assessment will identify the causes and impacts of price inflation of Bangladesh. Therefore we hope you will find this report worth all the effort we have put in it. Sincerely Yours, A.T.M. Golam Kibria Khan Executive Summary The current wave of inflation has been eroding purchasing power of the low and middle income people in Bangladesh, as they need to pay much higher bills for food grain and other commodities. The Exchequer of Bangladesh, which absorbs the petroleum price hike significantly, is also under severe pressure as oil prices hike in the international market. The concerned authorities in Bangladesh have taken several measures to contain the current inflation. However, some of their measures have proven to be countervailing and the ongoing inflation in the economy shows no sign of restrain. The relationship between inflation and economic growth is a...
Words: 12375 - Pages: 50
...Complete economics dictionary Complete Economics dictionary A B ABNORMAL PROFIT The surplus of revenue over costs enjoyed by a monopoly that is in excess of profit the same firm could expect to earn if it faced competition for its market. BALANCE OF PAYMENTS An accounting record of all monetary transactions between a country and the rest of the world. ABSOLUTE ADVANTAGE The ability of a country or region to produce a good or service at a lower average cost per unit than any other country or region is able to. ABSOLUTE POVERTY An economic condition of lacking both money and basic necessities needed to successfully live, such as food, water, education, health care and shelter. ADULT LITERACY RATE A measure of the number of people of working age as a proportion of the total population in a country who are able to read and write. AGGREGATE DEMAND The total demand for goods and services in an economy. It is determined by consumer spending, investment, public expenditure and spending by overseas residents on exports. AGGREGATE SUPPLY The total output or supply of all goods and services in an economy that all producers are willing and able to supply. ANCILLARY FIRMS Firms which provide goods and business services for other firms; they are often located near to their main business customers. APPRECIATION (in the value of a currency) A rise in the rate at which a national currency can be exchanged for another currency or currencies, i.e....
Words: 8352 - Pages: 34
...Balance Of Trade Difference in value over a period of time between a nation's imports and exports of goods and services. The balance of trade is part of a larger economic unit, the balance of payments, which includes all economic transactions between residents of one country and those of other countries. If a nation's exports exceed its imports, the nation has a favourable balance of trade, or a trade surplus. If imports exceed exports, an unfavourable balance of trade, or a trade deficit, exists. Current United States Balance of Trade The United States reported a balance of trade deficit equivalent to 44 Billion USD in September of 2010. The United States is the most significant nation in the world when it comes to international trade. For decades, it has led the world in imports while simultaneously remaining as one of the top three exporters of the world. Main exports are: machinery and equipment, industrial supplies, non-auto consumer goods, motor vehicles and parts, aircraft and parts, food, feed and beverages. U.S. imports non-auto consumer goods, fuels, production machinery and equipment, non-fuel industrial supplies, motor vehicles and parts, food, feed and beverages. Main trading partners are: Canada, European Union, Mexico, China and Japan. |Country |Interest Rate |Growth Rate |Inflation Rate |Jobless Rate |Current Account |Exchange Rate | [pic][pic][pic] |[pic][pic] to |[pic][pic] [pic] [pic][pic]...
Words: 10127 - Pages: 41
...Horowitz Lucille Buonocore Sujin Hong Amy Scholz Jesse Cruz Allison Morris Elena Santa Maria Harry Nolan Madelyn Lesure ©lightkey/iStockphoto This book was set in 10/12 Times Roman by Laserwords and printed and bound by R. R. Donnelley-JC. The cover was printed by R. R. Donnelley-JC. Copyright © 2013, 2010, 2007, 2004 John Wiley & Sons, Inc. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except as permitted under Sections 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc. 222 Rosewood Drive, Danvers, MA 01923, website www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030-5774, (201)748-6011, fax (201)748-6008, website http://www.wiley.com/go/permissions. Founded in 1807, John Wiley & Sons, Inc. has been a valued source of knowledge and understanding for more than 200 years, helping people around the world meet their needs and fulfill their aspirations. Our company is...
Words: 236413 - Pages: 946
