Japan's Globalization

Globalization has been an on-going process in the modern world. In Japan's economy has rebounded and is growing again. Japan ranks as the world's 3rd largest economy and is a leader in the fields of IT-related industries, automobiles, and also animation like cosplay and other stuff in comics. It also has showed the world in high tech exports, microelectronic products or gadgets. Japanese companies have invested all over the world. Toyota for example, has invested in an automobile plant in France with all of its labour laws.

Some argue that Japan's market has unique vulnerabilities, and as analysts see it, the plunge reflects to a large extent foreign investors desertion of a Japan that now appears to have poor prospects fot growth and prosperity in the future. But on the other hand Japan's modernization process now can be viewed as a globalization process as well. Japan's adoption of European imperialism resulted in total devastation of both the country and many traditional values. 

Japan has characteristics of the economic development especially in the period after the 1990s. The first characteristic is the changes in exchange rates and their economic impact. After Japan making the transition to a floating exchange rate system. Japan was faced with a precipitous appreciation of the yen although its simple, in the early 1990s.  Because of the exchange rate changes had a substantial impact on the Japanese economy. Secondly, with the advancement of Japan's industrial and trade structure, the focus on the US as a trading partner and direct investment destination gradually shifted to the East Asian region. Thirdly, regarding Japan's financial and capital transactions, equity investments from abroad have recently increased, but it can't be said that Japan's international financial and capital transactions have accelerated, except in the bubble economy period. Fourthly, Japanese's economy's international ties are not as deep as those of European and North American countries. This means that even though globalization in Japan is presumably advancing, it may not be the case when compared to the Europeqan and North American countries. 

Globalization is not a choice but a necessity for survival. In order to move forward with globalization Japanese companies must open up their closed labor market, an undertaking equivalent to a "cultural revolution" to overturn Japan Inc.'s human resource management style. 

Mega Indah Putri U.

1801404251

Investment and business culture in spain

I Made Danan Jaya (1801406622)

Spain, which covers 195.000 square miles, is located on the Iberian Peninsula at the southwest corner of Europe. Its southernmost tip is directly across from Marocco. The country has a population of approximately 40.5 million and a gross domestic product of about $1.1 trillion ($27.400 per capita). Spain has an international business platform and the economy ranked 9^th largest in the world and top five countries with huge economies in the European Union. Spain economic freedom score is 67.6, making its economy the 49^th freest in 2015 index. Spain has a strategic location, they belongs to European Union and on the gateway to North Africa and Latin America. And the export and import activity have grown quickly.

            Spain has an majority investment. The first one in aerospace sector, spain aerospace industry is the 5^th in Europe in terms of turnover and unemployeement and 80% of the 60 million tourist that visited spain in 2013 did so by plane. This is very interested the investor to invest their capital in aerospace sector. The second is automotive sector, spain is the second car manufacturer in Europe and eleventh worldwide. The third is biotechnological, pharmacy, and life sciences. Spain is tenth world scientific power and fifth by scientific production in EU 15 and biotech companies are growing faster in spain than other countries. The fourth is ICT (informational and Communication Technology) sector, sapin have modern and telecommunication infrastructures, couples with an extensive network of scientific and technology parks and higher education canter and spain has storng government support in this sector, through specific sector plans to all activities aimed at fastering the development of the information society. And the last, fifth is tourism sector, spain has a rich history and cultural heritage and spain is the number two tourist destination in revenue and number three in number of visitors.

As we know that, the Spanish culture in one that places a great deal of emphasis on pride. When people work together, they try to avoid situations that will taint the relationship through criticism or cause either party embarrassment. Spanish business culture will affect the decision-making in negotiations with investor by controlling a business that can generate prosperity and benefit. Than, the Spanish are not known to be risk takers, and approach ventures with caution because they don’t want either party loss. So the time to take a decision will be long. Because to achieve mutual benefits needed both for collective bargaining. Thus, the resulting decision will be much better. 

The Impact of Foreign Direct Investment in Indonesia

The main points that must be done in the implementation of Indonesia's foreign policy is the effort to achieve the urgent national interest, namely tackling the economic situation. To implement the necessary capital not less, although in this case the aid or investment capital from foreign party is just a complementary. 

The relationship in the economic field between the Republic of Indonesia to the other social state at this time has been going well in an atmosphere of mutual friendship and without interfering in the internal affairs of each party and also as long as no harm and will not affect the freedom of Indonesia.
In Foreign Direct Investment there must be procedurs and instructions for foreign direct investment policy implementation to advanced Indonesia. And by that Indonesia wants priority in the framework of the government's economic policy to achieve economic stabilization and rehabilitation.

There are also the positive and negative impact of FDI in Indonesia. First I'll explain the positive impact, namely: 
1. The increase in production and national income target countries.
2. Foreign-direct investment will not burden the balance of payment because there's no obligation to pay the debt and interest. Because the transfer of profits based on the success of foreign companies to invest.
3. Encouraging the develompment regional and sectoral

And the negative impact, namely:
1. May occur against the home government intervention by MNC. So it is possible the policy tend to protect the MNC's made from a variety of threats, including investment and domestic industries.
2. The emergence of the dominance of the industry, which is potentially turn off the domestic industry loses in terms of capital

And nowadays, Foreign Direct Investment in Indonesia increased to 82100 Billion IDR in the first quarter of 2015 from 78700 Billion IDR in the fourth quarter of 2014.

Mega Indah Putri Utami
1801404251

Whether Indonesia is ready to Face AFTA?

I Made Danan Jaya (1801406622)

          AFTA (ASEAN Free Trade Area) is an example of a free trade area of ​​southeast asia are. AFTA itself will begin at the end of December 2015. Look of readiness traders in Indonesia itself is lacking, even they do not know what it AFTA and they tend not to approve the AFTA agreement. On the other hand relevant government authorities also lack the socialization of AFTA and governments also lack the structures - means that support for the exercise of AFTA in Indonesia, such as the lack of road infrastructure, the distribution of goods that are still disrupted and many more. In terms of products, product quality - Indonesian products can still be offset, even better than the product nine other ASEAN countries. AFTA could also have a positive impact for Indonesia, which is where the AFTA could be an opportunity for traders to market their products abroad with ease. But to achieve a positive impact, the government should play an active role in the preparation towards this afta, such as by creating a strategy or policy that can make Indonesia ready and assist Indonesia in AFTA.
 

          We know that it has now entered the era of globalization in which one example is the free trade diakannya. In Southeast Asia alone there is an agreement on free trade, known as the ASEAN Free Trade Area (AFTA). AFTA was established with the aim to make the ASEAN region as a competitive production that ASEAN products have strong competitiveness in the global market, attract more Foreign Direct Investment (FDI), increase trade between ASEAN member countries (intra-ASEAN Trade) (accessible from www .tarif.depkeu.go.id / Others /? hi = AFTA, on 25 January 2015 at 14:31). Seeing the course of AFTA who lived a few months longer (late December 2015) Indonesia as not too concerned with such activities. It can be seen from the perpetrators kesiaapan economy, especially small and medium-sized traders located in Tanah Abang Market which is the biggest wholesale market in Southeast Asia. Even just a few merchants there who knew what and when AFTA AFTA activities will take place, they prefer to think of the advantages - advantages that they can now think about the problem of the future. And if you do not prepare well AFTA can make them more difficult to compete in terms of trade and can shut down their business little by little. So it can be concluded by the trader opinion that Indonesia is still not ready to face AFTA and the government in terms of the lack of attention in this regard.
 

          AFTA (ASEAN Free Trade Area) is an agreement made by the state - Southeast Asia 'countries to make the region free of Commerce in order to improve the competitiveness of southeast asia region. Indonesia, which is part of the ASEAN will face the AFTA which will be held late 2015's. But from kesiapaan itself can be seen that Indonesia is not ready to deal with it. It can be seen from the many small traders / medium which is still less concerned with the AFTA itself and they also assume that AFTA is not necessary. And if they are ready, AFTA could be a golden opportunity they can get to promote their businesses and market their products - their products to the international market. From the government side also give less attention to the readiness of AFTA, the government should create a strategy that can support activities such as revamping the infrastructure sector and provide assurance / protection against product - Indonesian products so as not to be imitated. AFTA Indonesia can serve as an early learning in terms of free trade. So for years - in the future Indonesia will be more prepared to deal with the scope of free trade is far greater.

Why State Do Trade ?

I Made Danan Jaya (1801406622)

Why State Do Trade ?

Today, trade is an important economic activity. Many peoples, companies, and state do this activity right now. And world have some organization in this sector who called WTO (World Trade Organization). So why state do international trade?  We can saying that when state do international trade it is a part of some international relations,  making a good relationship with other state, or  to fill the needs each other. It is no problem when we say that. But when we see more deeply we can find another reason why state do international trade. But international trade itself is a trade process between each country to fill their necessary which is based on they agreements before. And there are many factors why state do international trade. Like other state have a resources which some state do not have it, can get a cheaper labour, production cost will be cheaper, state policies, etc. And the benefit that the county get it from the international trade are the state can get a relations with other state, creating jobs for their citizens, the state can exchange their knowledge or technology, the state can expand their market or product to other state so they will increase their foreign exchange, the state can gets goods or services that can not produce themselves. There are few examples for the benefit that state can get it when they do international trade.

When we talk about international trade, there is few basic theories of it. Many theories discuss about the international trade itself and become a reason to the state why they do the international trade. Mercantilism is one of few theories. Mercantilism itself is a political system which is consider in international trade to increase the assets and capital of the state.  Like one of benefit that we know before about why state do international trade is the state can expand their market or product to other state so they will increase their foreign exchange. Its like an example from mercantilism theory. When state can increase their foreign exchange its same they can icrease their capital dan the assets. So they can fill their state needs and make their people prosperous. The negative impact from this theory is the dominant state can make some exploitation that could harm other state for their national economy interest, like imperialism or colonialism. Others theories is absolute advantage theory and comparative advantage theory. Absolute advantage theory is the theory from Adam Smith. The absolute advantage theory its like when state have advantage like they can produces goods or services that can not be produce by other state. So international trade will happen when a state exchange their needs in accordance with previous agreements. The comparative advantage theory from David Ricardo. Comparative advantage theory is when some state did not have absolute advantage in goods production compared with other state, but the international trade mutually beneficial to both state as long as country to specialize the goods productions that have smallest relative cost of other state. On the other word, every state can get beneficial  when they do some specialize in produce and export which can they production with cheap cost and they can import their product with expensive cost. Its tell us why some state which have a complete resources choosing import or export than they produce to they use itself. The negative impact from this theory is it can make some state becomes dependent on other state.

From the three theories we can know why state do international trade. Because from mercantilism we can learn that the state can expand their market or product to other state so they can icrease their capital dan the assets. Although this theory have a negative impact. From absolute advantage theory, state can exchange their knowledge or technology to complement each other. And Comparative advantage theory, every state can get beneficial  when they do some specialize in produce and export which can they production with cheap cost and they can import their product with expensive cost. But may be comparative advantage theory more suitable for developed contries.

Fuel prices in Indonesia

Author : Delvia Erfani Olii (1801405424)

The first item on the to-do list of Indonesia's president-elect is one that successive leaders have struggled with, and could be his toughest. how to wean the country off fuel subsidies that make gasoline almost as cheap as bottled water. Even though Fuel prices increased up to 44 percent across Indonesia after the government reduced some of the costly subsidies that have kept pump prices in Southeast Asia's largest economy among the world's lowest, Each year the subsidies cost Indonesia billions of dollars that economists agree would be better spent on creating jobs and building badly needed roads, schools and hospitals in Southeast Asia's largest economy.

Indonesia was once an oil exporter and OPEC member, but now imports crude oil and refined fuel to meet demand. It pays overseas fuel suppliers around 11,500 rupiah ($0.98) per liter, but sells it to Indonesians at 6,500 ($0.55) per liter. That's close to the cost of a liter of bottled drinking water, which range in price from 3,500 to 10,000 rupiah depending on brand and outlet. Cheap fuel also encourages consumption as can be seen in the still-widespread habit of Indonesian drivers to run their engines for several minutes to "warm up" their car before departing on a journey. Fuel imports add to the country's trade deficit, leaving the rupiah vulnerable to sudden and potentially destabilizing weakness.

The problem for President Jokowi Widodo is that Indonesians are accustomed to some of the cheapest fuel in the world. The subsidies also indirectly keep the cost of public transport and basic foodstuffs affordable, an important consideration in a country where about half of the 240 million people survive on $2 a day. The subsidies are a significant drain on the country's budget. The budget approved sets the 2013 fuel subsidy at $20.2 billion - nearly 4 percent of total economic output. By comparison, the government aims to spend $20 billion on infrastructure in 2013. Cuts in fuel prices, liquefied petroleum gas (LPG) and cement announced by the government, would have limited impact on the economy in the short-run as overall inflation was likely to stay high. However, economists say the lower prices would not significantly boost the people’s purchasing power or economic growth, as overall inflation is unlikely to return levels before the fuel-price hike.

Currency War

Author : Carnesia Deswara Chandra - 1801400480

   Yes, just like the title said, there's a currency war going on. As we know that, 2014 was the year of the U.S dollar, certain currencies gained value against the dollar. Now a strong dollar is a good news for anyone who's planning a trip overseas but of course it's not the same for anyone who's planning to sell stuff out there. Why it's rising? The simplest explaination is; the stronger your economy, the stronger your currency. Many local currencies lost value against the dollar. The most tragic one is EURO.

credit goes to www.slate.com

   As we can see there, U.S dollar started a strong move in the beginning of 2015 makes the EURO came to its lowest level. The rapid decline of the EURO raise the possibilities of parity between EURO and U.S dollar. Among the 52 world currencies that the IMF monitors, the fastest devaluating currencies happpened in Russian ruble that lost value reached until 21.1% of change which is more than 7% difference with Indonesian Rupiah lost value against U.S dollar in 2014. Seems likeUkraine and Crimea issues made Russia had to go through tough times in 2014. , the flight of capital outside the country made a blow on the fall in oil prices. Among European countries, the British pound lost value of more than 5% while Norwekian krone lost average of 7% against the dollar.

In Asian region, it was not only developed countries that lost value against the dollars, but some rich countries such as Japan lost value on average 8% while Indonesia lost value on 13.7% against U.S dollar. Japan, which has been a good countries for decades, trying to get its economy out of the low inflation and finally buying bonds with newly printed money.

The only way to lose a currency war is to refuse to fight it, and let yours go up too much.  The dollar is already going to go up plenty more no matter what we do, but we can at least try to limit the damage. - Matt O'Brien

   The raise will continue in this year and of course it will result in the contination loss of values of curriencies like what happened in 2014. The U.S dollar will continue to raise the interest rate up to more normal level, not gonna baby-sitting countries that are devaluing. The world may ultimately be heading toward a global managed exchange rate regime.