Foreign Debt

In: Business and Management

Submitted By wt4787
Words 289
Pages 2
Since 1982 when the Mexican government declared its inability to service its foreign debt, the debt crisis of Latin America has become increasingly more alarming to foreign investors who began limiting their investments in this volatile region (49). The less developed Asian countries actually began to surpass Latin America as a potentially productive site for MNE operations (49).
Ironically, due to the debt crisis, Latin American countries were forced to become more open to foreign investment. Significantly, the debate as to what are the proper boundaries for public and private sector activities has intensified. Given the distinctive personalities of each country involved, the issues are handled differently in each host country. Since government-owned countries compete with and often actually preclude the operation of MNEs, Grosse sketches how public policy influences Latin America's potential international business growth. Grosse surveys foreign manufacturing MNEs in Venezuela and the restrictive regulatory practices enforced by the Andean Pact countries from 1971 to 1987.
In discussing managerial issues, a study of Fortune 500 companies is offered as a means of investigating inter-company rivalry as opposed to company-government relations. Grosse includes a compelling study of foreign MNEs strategies in Peru which reflect inter-industry difference in strategy in structure. In his fourth and final section, Grosse offers a comprehensive view of MNE activity in Latin America. Specifically, two specific types of MNEs, chemical companies and government-owned MNEs are scrutinized in an attempt to glimpse the future.
What is most appealing about Grosse's well-balanced and exhaustively detailed research is his concern that foreign investors must more clearly recognize that the rules of doing business operate differently in Latin America. Grosse attempts to prepare…...

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