Chapter 4 Geopolitical Analyses of Regional Markets John S. Hill.
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Transcript of Chapter 4 Geopolitical Analyses of Regional Markets John S. Hill.
Chapter 4Chapter 4Geopolitical Analyses of Geopolitical Analyses of
Regional MarketsRegional Markets
John S. Hill
Figure 4-1: Geopolitical Analyses of Figure 4-1: Geopolitical Analyses of Regional and National Markets: Topic Regional and National Markets: Topic
OverviewOverviewGeopolitical Analyses of Regional
Markets
North America
Latin America
Western Europe
Eastern Europe
Middle East and Africa
Asia
Regional Markets: Geopolitical Analyses
Geographic CharacteristicsHistorical & Cultural PerspectivesCommercial Characteristics
Regional Development in the Worldwide Context
Chapter OutlineChapter Outline
Introduction: The Importance of Geopolitical Studies
Regional Development in the Worldwide Context
North America Latin America Western Europe Eastern Europe Middle East and Africa Asia
The Importance of Geopolitical The Importance of Geopolitical
StudiesStudies Recognizing how historic factors have
affected regional development and the impact of geography on national economic and cultural development within the regional context
Understanding regional and national ethnic and linguistic compositions
Understanding how climate and topography affect country and regional communications and infrastructure development
World and Regional Analyses: Gross Domestic Products and PopulationsWorld and Regional Analyses: Gross Domestic Products and Populations 1998 GDP
Billions of $
AverageGDP per Capita
($)
Range per Capita ($)
Population Projections(Millions)
2000 2010 2020
Africa $4681.5%
$672 $100 (Ethiopia) to $3,730 (Mauritius)
6969.7%
1,009 1,230
Middle East $4211.4%
$2,661$280 (Yemen) to $17,870 (UAE)
2144.0%
Asia$7,80225.5%
$2,210 $210 (Nepal) to $32,350 (Japan)
3,12258.8%
4,075 4,495
North America
$10,64534.8%
$25,138$19,170 (Canada) to $29,240 (U.S.)
2905.5%
330 358
Latin America
$1,8326.0%
$3,404 $410 (Haiti) to $8,030 (Argentina)
4668.8%
583 642
Western Europe
$8,49627.8%
$17,220$3,160 (Turkey) to $39,980 (Switzerland)
4438.3%
523 521
Eastern Europe
$6092.1%
$3,543 $370 (Tajikistan) to $9,780 (Slovenia)
2394.5%
307 317
Australasia $2750.9%
$17,584 $14,600 (NZ) to $20,640 (Australia)
210.4%
33 37
Totals $30,548(100%)
5,309(100%)
6,862 7,601
NORTH AMERICANORTH AMERICA
Geographic Characteristics
NORTH AMERICANORTH AMERICA
GeographyGeographically large (Canada #2, US #4)Canada’s latitude gives cold climate and
population concentrations in southUS’s climate varies from cold north to sub-
tropical south; benign topographyGood natural resource base—agriculture,
minerals and energy
NORTH AMERICANORTH AMERICA
Historical and Cultural Perspectives Prior to 15th and 16th centuries, North America was
inhabited solely by Indian tribes and Inuit 1492, Columbus “discovered” the new continent Immigrants began from Mayflower in 1620;
established Anglo Saxon culture and English as the major language
Liberation war from the British in 1776 Civil War of 1861-1865 united nation 1823 Monroe Doctrine asserted national sovereignty
confirmed US independence from Europe US accounts for approximately 5 percent of the
world’s population, but it is responsible for over a quarter of the world’s gross domestic product (GDP)
NORTH AMERICANORTH AMERICA
Commercial History Early North American settlements were
agriculturally based In 1869, the first trans-US railroad opened; by
1900 the telegraph facilitated trans-continental communications.
The US industrial revolution occurred between 1870 and 1920
By 1914, US output exceeded that of Britain, France and Germany combined
By the 1920s, it produced 40 percent of the world’s coal and half its manufactured goods
LATIN AMERICA LATIN AMERICA
Geographic Characteristics
LATIN AMERICALATIN AMERICA
GeographyGeographically largeProximity to equator results in hot, tropical
climate over much of region (rain forests)Excellent agriculture, minerals, and energy
LATIN AMERICA LATIN AMERICA
Historical and Cultural Perspectives Many Latin American countries had Indian
civilizations predating 15th and 16th centuries (Aztecs, Mayas, Incas)
Modern Latin American history dates from the early 1500s, when the Spanish colonized most of the region and the Portuguese occupied Brazil
Independence was won from 1810 to 1824 US interest in Latin America increased in the early
twentieth century Southern European influence on Central and South
America is evident in language; religion and social class
LATIN AMERICA LATIN AMERICA
Commercial History Early interest in the region was spawned with the
discovery of silver at Potosi In the 17th century, tobacco, hardwood and coffee
crops became extensively cultivated in the Caribbean and Brazil
Slavery contributed to agricultural development The collapse of the global economy in the 1930’s
caused civil unrest throughout the region In the 1980s, privatization and movements
towards market blocs followed democratization trends and opened up Latin markets to trade and investment
WESTERN EUROPE WESTERN EUROPE Geographic Characteristics
WESTERN EUROPEWESTERN EUROPE
Historical and Cultural Perspectives Romans established Europe-wide empire from 100 BC to
400 AD; built regional infrastructures and established trade Colonizing activities of 16th through 19th centuries
established the region as political and economic leaders worldwide
Britain was first country to industrialize (between 1750 and 1830)
The 1930s economic slump left its mark on European society and politics
To pay for Western Europe’s mixed economy, personal tax rates are high compared to those of non-European countries
Continue to maintain national distinctions, but significant similarities exist among Europeans
Feudal history and heredity monarchs have contributed to
WESTERN EUROPEWESTERN EUROPE
GeographyNorthern latitude means temperate rainy
climate; good for agricultureGeographically compact (trade,
communications, infrastructure)Extensive coastlines (naval expertise)
WESTERN EUROPEWESTERN EUROPE History
Romans built roads, formalized trade routes, made region-wide laws, established a common currency
Monarchies/aristocracies establish hereditary social class system
By 15th century, superior sails, rudders, compasses, and maps enabled ships to sail longer distances
Colonization establishes trading routes and global reach17th century – British, German, Belgian, and Dutch banking
systems establish financial infrastructuresBy 1914, region was the center of world commerce1930s depression highlights needs for social welfare
systems and mixed economies1950s-70s: de-colonization and trade bloc formed
WESTERN EUROPEWESTERN EUROPE Commercial History
1952 European Coal and Steel Community formed 1957 Treaty of Rome establishes European Economic
Community—6 original members 1960 European Free Trade Association formed 1973 European Community expands to 9, then to 15 by
1995 (became the European Union), then to 25 by 2004 1992 Abolition of non-tariff barriers within the EC 1999-2002: establishment of Euro as common currency European multinationals account for about half of the
world’s $7.1 trillion of FDI Trend toward privatization and deregulation picked up
pace during the 1990s.
EASTERN EUROPE EASTERN EUROPE
Geographic Characteristics Eastern Europe includes the Central European
countries of Poland, the Czech and Slovak republics, Hungary, the Balkan countries, Russia, and the other states of the former Soviet Union
Russia dominates as world’s largest country (11 time zones); northern latitude means colder climates
Minerals and energy in good supply Agriculture problematic
EASTERN EUROPE EASTERN EUROPE Historical and Cultural Perspectives Much of Eastern Europe’s post 1500 history is tied to
Russia Early attempts to modernize were made by Peter the
Great (1672-1725); feudalism dominant into 20th century Russian Revolution of 1917-18 engineered by Vladimir
Ilyich Ulyanov, known as Lenin, and Leon Trotsky 1945 Yalta Conference establishes Iron Curtain Communism and cold war dominate until 1980s when
perestroika (restructuring) and glasnost (openness) occur
1991: USSR dismantled--1990s saw the countries of Central and Eastern Europe implement democratic reforms
2004 Many eastern bloc nations join EU
EASTERN EUROPE EASTERN EUROPE
Commercial History In 1924 Joseph Stalin collectivized agriculture and
initiated comprehensive industrialization programs
In 1992, Hungary, Poland, and the Czech and Slovak republics signed a Central European Free Trade Agreement
In 1994, the EU completed free trade agreements with the Baltic States of Latvia, Lithuania, and Estonia
Privatization of former state-owned businesses has been brisk, with an estimated $200 billion of assets returned to private shareholders
MIDDLE EAST AND AFRICA MIDDLE EAST AND AFRICA
Geographic Characteristics Middle East: harsh desert climate; some
agriculture though rainfall is variable; OIL dominates regional economy
Africa: large land mass; situated on equator; hot, humid climate means tropical vegetation and difficulties in establishing infrastructures; other parts of Africa desert-like with crop-raising problems; major source of minerals
MIDDLE EAST AND AFRICA MIDDLE EAST AND AFRICA Historical and Cultural Perspectives The Middle East and North Africa: Key event was
establishment of Islam 7th century and its spread throughout Middle East and North Africa. Ottoman Empire major influence until 1918; colonial interest heightens with oil discoveries; many nation states established in 20th century. Internal tensions over Palestine; external tensions with western powers
Africa: Source of slaves 16th-19th centuries; colonized 19th century (1884 Berlin Conference) and major interests in mineral deposits in 20th century; de-colonization after 1945 and many ethnic tensions cause problems establishing democracies; AIDS virus major problem in 21st century
MIDDLE EAST AND AFRICA MIDDLE EAST AND AFRICA Commercial History Middle East major trader with Asia via the Silk
Road 6th century onwards From the 1870s to 1918, agricultural produce was
the major Middle Eastern export, mainly to Europe The 1930’s depression devastated Middle Eastern
economies with major declines in raw material and commodity prices
Since the 1950s, oil has been dominant in the Middle Eastern economies; tensions over oil price rises
African economic progress has been slowed by ongoing internal conflicts and deflated world prices for commodity exports; trade blocs starting to form (COMESA, SADC)
ASIA ASIA Geographic Characteristics
ASIAASIA
GeographyLarge geographic area dominated by Pacific
Ocean; island states of Philippines, Indonesia
Large nation states of India (1 billion people) and China (1.2 billion)
Climatically variable: sub-tropical, monsoons, earthquakes
ASIAASIA Historical and Cultural Perspectives Dominant religions: Buddhism, Hinduism, Islam,
Confucianism and Taoism China an early civilization, with Confucius as a
major influence on Chinese government and society for nearly 2000 years; imperial dynasty overturned 1911
In India, Hindu religion dominates history and economic development
Japan: Island status insulated nation from western influences until 1868 Meiji Restoration; modernization and imperial aspirations caused problems until 1945
Colonization by Europeans a major influence on many Asian nations
ASIAASIA Commercial History China an early innovator (iron, gunpowder, compass) Asia from the 15th century was a source of silks and
spices China and Japan reluctant to open to west until 19th
century Japan dominates Asia as the first to industrialize.
Resurgence after 1945 as the country surged into world markets after the 1960s
Asian economic growth in the latter half of the 20th century was powered first by Japan, then by South Korea, Hong Kong, Singapore and Taiwan
More recently, China, India, Malaysia, Thailand, Indonesia, and the Philippines have joined the Asian economic resurgence
Key PointsKey Points
Geopolitical studies
North America Latin America Western Europe Eastern Europe Middle East and
Africa Asia
Key PointsKey PointsGeopolitical studies are important
to international business people as they provide key insights into regional and national development and valuable background in understanding current policies and problems.
Key Points (Americas)Key Points (Americas) North American development progressed out of
European colonization, with religious freedom and non-hereditary social-class systems as hallmarks of the new American society. Pioneering and westward expansion contributed to societal characteristics of self-reliance and individualism.
Latin America was colonized by the Spanish and Portuguese. Their language, religion, and hereditary social-class system are still apparent today.Independence occurred between 1810 and 1824. Instability characterized the next 150 years until major movements toward democratization and market-forces economies during the 1980s and 1990s.
Key Points (Western Europe)Key Points (Western Europe)
Western Europe’s compact geography and temperate climate significantly aided the region’s industrialization and trading efforts, and historic monarchies and feudal background laid the foundations of a hereditary social-class system.
European colonization gave the region worldwide influence up to the mid-20th century. World wars and common historical heritages formed the basis for today’s economic and political integration.
Key Points (Eastern Europe)Key Points (Eastern Europe)
Eastern Europe’s geographic size and climate significantly shaped its development.
Russian influence through the communist revolution of 1917-18 and the Yalta Agreement were major influences on world politics up to the 1980s, when democratization and market-forces economies have emerged to re-shape regional destinies.
Key Points (ME & Africa)Key Points (ME & Africa)
Development was greatly influenced by geographic size, climate, natural resource deposits.
Both regions were heavily affected by European colonizing efforts.
Present day development has been hindered by politics and religion (Middle East) and by ethnic compositions (Africa).
Key Points (Asia)Key Points (Asia)
Modern history has been influenced through European colonization activities.
Ethnic, cultural, and religious diversity is apparent over much of Asia and has affected regional development.
Japan has historically been the dominant regional power, though China’s economic ascendancy has altered the regional, political, and economic balance.
Key PointsKey Points
Geography and history are primary shapers of regional and national cultures.
Geographic size, climate, and topography affect commercial interactions within markets and with the outside world.
History records how peoples have responded to their geographic and environmental circumstances and provides key insights into current cultures and behaviors.