General principles of openness - International Economics

General principles of openness

Spontaneous openness, openness not only does not promote economic development, but, conversely, is a threat to the economic security of the country. Reasonable openness is built on three basic principles:

- efficiency;

- competitiveness;

- national security.

The principle of efficiency. This principle is fundamental and inextricably linked with the other two. Efficiency is primarily achieved through international specialization and cooperation.

■ International specialization of production - the form of the division of labor between countries, under which there is a differentiation of national industries engaged in the production of homogeneous products for sale both on the national and world markets.

Some economists (Yang, Keldor, etc.) believe that specialization is the main feature of progress and implies an increase in exports due to high productivity, which in turn implies an increase in industrial production.

Specialization leads to an increase in the number of branches, technical and managerial skills. But at the same time, specialization limits the assortment of output within a certain industry, which forces people to cooperate in the exchange of goods and services.

■ International production cooperation - cooperation of national economic complexes for the purpose of complementarity and coordination of production cycles.

The advantages of cooperation are an increase in the competitiveness of the industry, general rules for entities operating in the world market.

Cooperation exists in various forms: trade, investment, partnership, joint ventures, free trade associations, customs unions, multinational and transnational corporations.

The transition to a policy of openness, the reduction of duties and barriers restricting foreign trade, investment and the flow of capital both into and out of the country lead to a deepening of specialization and cooperation, and thus to an increase in labor efficiency.

The principle of competitiveness. The central place here is the idea of ​​the relationship between the four main parameters of the economy, forming a competitive macro environment in which firms operate in a particular country.

These parameters are as follows:

The factor conditions. Along with the traditional factors of production (labor, land, capital, entrepreneurial ability), factors such as the informational supply of scientific, technical, and market structures, the state of the transport system, the health care system, communication systems and even the provision of the population with housing are taken into account. Factors in the majority of countries are not inherited, but are created in the process of development (expansion) of production.

Conditions (parameters) of demand. First of all, this is the capacity of demand, the dynamics of its development, differentiation, the needs of other countries in certain goods, credit resources, investments.

Close and serving industries. The presence in the national economy of highly-developed related and supporting export-oriented firms is a prerequisite for creating and maintaining a competitive advantage in the world market.

The company's strategy and competition in the domestic market.

The government of the country plays an important role in shaping the national competitive advantage. With its monetary, fiscal and foreign trade policies, it directly affects the parameters of demand and factors of production.

In an open economy, the success of domestic producers in the external market stimulates the growth of their competitiveness in the domestic market. Conversely, successful firms hardened in the struggle on the domestic market use the competitiveness acquired in this struggle on tougher (and sometimes cruel) world markets. The more fierce the fight in the domestic market, the more likely that such firms will stand the test of time and will dominate abroad.

The principle of national security. National security is achieved through the activation of government regulation processes in national economies, as well as through various international agreements.

The main instruments of state regulation of foreign trade are:

- tariff methods - a combination of means of influencing foreign trade through economic restrictions (customs duties, duties, excises, etc.);

- non-tariff methods - a group of direct, administrative means of influencing foreign trade (through quotas, licensing, introduction of technical standards, sanitary norms, etc.).

Open economy implies reduction of tariff and non-tariff methods of regulation, i.e. liberalization of the foreign trade regime, which can significantly reduce the security of countries that support such a policy. In this regard, the importance of other types of interstate regulation, such as bilateral and multilateral agreements and arrangements, free trade zones, customs unions, various international organizations is growing.

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