COMMERCE 4SA3 Study Guide - Final Guide: Individualism, Labour Market Flexibility, Double Taxation
3 Feb 2017
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Gnp/capita less than ,905 (world bank 15) Unequal distribution of income (high gini index) Majority of population working in agricultural sector. High rate of illiteracy and insufficient educational facilities. Low savings rates and inadequate banking facilities. Maintain standards of living and quality of life. Stimulate national development, especially of fledgling industries. Reduce capital flight in situations where foreign exchange reserves are low. To react to domestic lobby groups, both corporate and citizen. As a political tool to show displeasure with actions of foreign government. Financial incentives (free land or buildings, tax holidays, loans or loan guarantees, etc. Non-financial incentives (guaranteed government purchases, protective tariffs or quotas, local content requirements, etc. ) Decentralization lets decisions be made closer to the information source. May help achieve experience curve and location economies. Possible lack of control over marketing reps. Provide capital maybe not available to locals. Can increase competition, lower prices, improve quality, broaden range of products available if mnc not a monopoly.
