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Chapter 4 Geopolitical Analyses of Regional Markets

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Title: Chapter 4 Geopolitical Analyses of Regional Markets


1
Chapter 4 Geopolitical Analyses of Regional
Markets
John S. Hill
2
Figure 4-1 Geopolitical Analyses of Regional and
National Markets Topic Overview
3
Chapter 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

4
The Importance of Geopolitical Studies
  • 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

5
World and Regional Analyses Gross Domestic
Products and Populations
6
NORTH AMERICA
  • Geographic Characteristics

7
NORTH AMERICA
  • Geography
  • Geographically large (Canada 2, US 4)
  • Canadas latitude gives cold climate and
    population concentrations in south
  • USs climate varies from cold north to
    sub-tropical south benign topography
  • Good natural resource baseagriculture, minerals
    and energy

8
NORTH 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
    worlds population, but it is responsible for
    over a quarter of the worlds gross domestic
    product (GDP)

9
NORTH 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
    worlds coal and half its manufactured goods

10
LATIN AMERICA
  • Geographic Characteristics

11
LATIN AMERICA
  • Geography
  • Geographically large
  • Proximity to equator results in hot, tropical
    climate over much of region (rain forests)
  • Excellent agriculture, minerals, and energy

12
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

13
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 1930s
    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

14
WESTERN EUROPE
  • Geographic Characteristics

15
WESTERN 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 Europes 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

16
WESTERN EUROPE
  • Geography
  • Northern latitude means temperate rainy climate
    good for agriculture
  • Geographically compact (trade, communications,
    infrastructure)
  • Extensive coastlines (naval expertise)

17
WESTERN 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 reach
  • 17th century British, German, Belgian, and
    Dutch banking systems establish financial
    infrastructures
  • By 1914, region was the center of world commerce
  • 1930s depression highlights needs for social
    welfare systems and mixed economies
  • 1950s-70s de-colonization and trade bloc formed

18
WESTERN EUROPE
  • Commercial History
  • 1952 European Coal and Steel Community formed
  • 1957 Treaty of Rome establishes European Economic
    Community6 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 worlds 7.1 trillion of FDI
  • Trend toward privatization and deregulation
    picked up pace during the 1990s.

19
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 worlds largest country (11
    time zones) northern latitude means colder
    climates
  • Minerals and energy in good supply
  • Agriculture problematic

20
EASTERN EUROPE
  • Historical and Cultural Perspectives
  • Much of Eastern Europes 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

21
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

22
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

23
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

24
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 1930s 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)

25
ASIA
  • Geographic Characteristics

26
ASIA
  • Geography
  • Large 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

27
ASIA
  • 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

28
ASIA
  • 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

29
Key Points
  • Geopolitical studies
  • North America
  • Latin America
  • Western Europe
  • Eastern Europe
  • Middle East and Africa
  • Asia

30
Key Points
  • Geopolitical 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.

31
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.

32
Key Points (Western Europe)
  • Western Europes compact geography and temperate
    climate significantly aided the regions
    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 todays economic and political integration.

33
Key Points (Eastern Europe)
  • Eastern Europes 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.

34
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).

35
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 Chinas economic ascendancy has
    altered the regional, political, and economic
    balance.

36
Key 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.
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