International Finance and constraints in the Iraqi banking sector .. The causes and t
International Finance and constraints in the Iraqi banking sector .. The causes and treatments
Zia Rahim Mohsen
Internal growth models suggest that economic growth in the long term a specific policy and other variables require a redefinition of the concept of capital to include the human element, which can, thanks to the creative ideas that contribute to the creation of technological development, technical, and this variable is the only one able to stop the force of law of diminishing the yield on long-term as it came Rebelo Lucas 1988 and 1991 opposed the view that neoclassical IDE acknowledges that the flows will not contribute to the creation of long-term growth, but growth tends achieved during the short period to decline according to the law of diminishing returns. Proponents endogenous growth theory that there is a positive impact of total flows to grow and is divided into two effects:
A - one of them directly and for increasing domestic investment growth in the wake of the occurrence of direct investment flows provided it is accompanied this flow not to create internal competition leads to the exclusion of national companies and exit from the competition field, it is achieved in the case of funding to target the establishment of projects to produce goods for export or services for import substitution and it supports more local level of investment in the case of the adoption of foreign companies in Tamoanadtha the national companies shall be the relationship between the two complementary relationship
B - is the direct impact and produce this effect if funding flows led to the creation of positive externalities contribute to increasing the productivity of both labor and capital in the host countries, which can be achieved within the framework of the competition which will lead to increase the ability of national companies to use and exploit the technology and adapt it with changes due to what it faces competition, which calls for activating the training channel and the exploitation of human resources in the recipient countries to allow it to qualify this human capacity to become able to control modern technology and be better able to keep up with the changes, and provide them with another resource for technical and technical expertise resulting from the tradition of national companies in various practices by multinational companies in administrative and technical management field, and in this framework of the United Nations report in 2005 stressed the importance of the internationalization of Mtadh-national companies for research and development, allowing adapting their status with host countries' markets and be able to facilitate distribution outlets in Tllk countries, but new in the policies of multinational companies that was maligned by always retaining technology and scientific expertise of the countries home to the company, but this trend did not stay valid because she did a lot of these companies to set up laboratories, research and development in host countries; has reached the number of research units and development in China to 800 units, as she has many companies in various activities, whether it is industry aircraft or pharmaceutical products as générale Motors, which hired 2,400 people in India in industries that require scientific high-quality configuration, and WAFS in the same country many of the multi-competent national corporations in pharmaceutical products administered for medical research.
2-2 international financing risks
Openness is limited factor and financial liberalization imposed by the prescription of the International Monetary Fund structural adjustment programs to allow emerging economies to enter into the world economy in the most efficient became a place of resentment by many countries, particularly since the mid-nineties where erupted financial crises hit many emerging economies; in Latin America and some Asian countries in sync with the increasing foreign investment flows in various different forms after the adoption of these countries to the policies of financial liberalization of the capital account, have actually proved its unity in creating crises in the years 1994 -1995 Where was able to devastated the economies of Latin American countries and destabilized the growth and stability of starting in Mexico and then Argentina comes to the autumn of 1997, carrying a wave of financial collapses hit many Asian economies. These crises have produced a serious and negative impact on various economies hit by the results it did not stop there, but also extended to the sustainability of the crisis and the invasion of many other economies, to hit the stability sharply, which has been termed infection crises. Only reports of international bodies that 50% of crises occurred in emerging economies, which is mandatory reforms profound economic and financial summoned in order to raise banking supervision efficiency adequately especially the subsequent expensive costs incurred developed economies due to the growing importance of developing countries for industrialized economies of volume flows capital, which amounted to 40% of total global flows through the nineties and in terms of commercial importance, as it represents the volume of trade with the industrialized countries about 25%.
These phenomena have become controversial and of interest to researchers defended them to think in a systematic approach allows the application of financial liberalization policies of capital account be more safety and adjusts the timing of each stage, has borne the countries that suffered these crises to serious results; destroying its economy, which has made tremendous efforts to develop since collapsed organized by the banking and financial bankruptcy of many banks because of the foreigners or residents of depositors to withdraw their deposits under penalty of growing risks and increasing financial market losses in Argentina has financial system about $ 55 billion over a period of only 3 months (from December 23, 1994 to March 31, 1995) which led to the shrinking reserves of foreign currency, investors faced heavy losses in the aftermath exacerbate the crisis and the increased tendency of investors to waive the financial origins, and this size the massive supply of financial assets did not find what offset by the demand which led to the collapse in the prices of those assets, and the interaction All of these data with a high degree of risk and the growing concerns about the future of data has been a major breakdown occurred in the stock market capitalization increased by 30% with low Argentina Merval stock index to 25.7% during the period (19 Dissembr1994- late March 1995).
The same truth experienced by emerging countries in Asia. These countries known growth quickly arrived to 8% over a period of ten years prior to the year 1997 with a reduction in inflation and controlled small rates, and the economic growth a significant impact on the global economy as its contribution to 25% of world production was estimated and gained a tremendous ability to attract private investment which reliable to finance industrial projects and infrastructure projects, as defined allocation of a huge amount of resources arrived to 6% -8% of GDP (34) and increased the pace of the flow of foreign direct investment to them to allow the creation of more of the activity of activation financial markets to those countries; capitalization Alborsah of $ 146 billion in 1984, which represents 4% of global capitalization that reached 13% in 1995 and became the market occupies position in the world rose, for example, markets have become all of Korea, Malaysia and Thailand among the 15 market for the first shares in the world (35), these massive flows allowed the provision amount of foreign exchange reserves after pursuing financial liberalization policy, providing an area fertile for economic growth and to produce profits, but that the massive influx carries within it the threats occurrence of non-financial settled, which actually happened in the fall of 1997 where began a violent wave of speculation on the currency exchange rates starting from Aletilanda lackluster who collapsed value to 45.6% against the dollar in September 1997 to create this whirlwind on the currencies of other Asian countries, reinforced the doubts and concerns that occurred to most investors at the time that the major currencies in South Asia (Malaysia, Indonesia, the Philippines) have been affected by the situation itself came down all of their value, according to herd behavior, resulting in a negative impact on the equity markets and fell in sync asset values with the deterioration in the banks, and doubled the debt services to all countries in the region (36), and has spread This crisis is casting a negative outcome of the developed countries as well as the US stock market losses during the same period rose to 636.877 billion dollars and the Tokyo Stock Exchange losses amounted to 263.851 billion dollars (37). This trend has become enhanced to believe that all collapse in one of the variables would be worthwhile for the collapse of the other variables and in preparation for the occurrence of new falls or what is known infection crises.
This acute crises of concern and raises a lot of questions about why they occur Is it stems from the nature of international financial flows or is it due to the improper variables in the economic systems of the recipient countries was capitalist reagent flow from this fact?
The simultaneous massive capital flows with financial liberalization policies is something emitter of hope in the financing of development in developing countries in particular, but without forgetting that the size of this flow has to Aabos reassuring and raises the degree of risk because of the size of the rapid effects, as it could cause In imposing a state of economic instability due to the increased level of income and consumption dramatically prices so increase updated accelerating inflation and a rise accompanied by effective exchange rate is produced negative consequences on the balance of trade (37), and the balance of payments, which may create signs of an economic crisis have Ataatoagaf effects on the country, which emerged in which to exceed linked to other economies with it and causing the creation of the state of chaos in the global economy.