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Section 13. Economics and management
qualified specialists by using advanced learning technologies that are directly related to practical activities.
So we can state the fact that: on the international arena Ukraine currently benefits mainly due to human capital (high adult literacy rate and the spread of higher education), and low cost of mobile communications and the Internet.
AVentures Capital estimated that Ukraine has already formed multibillion IT industries. About 100 thousand programmers are working in the local IT companies, and besides these are the world-class developers. Ukraine now takes the first place in the number of developers in Eastern and Central Europe, and the number of IT people in the country is growing.
Besides, market experts expect that the volume of Ukrainian IT market will continue to increase, both with respect to domestic sales and export of IT services. Participation of non-Ukrainian companies in Ukrainian IT business is also expected to increase. The main consumers of IT products are in financial sector, telecommunication sector, trade, industry as well as the public sector [8].
The conclusions. Thereby at the present stage of the development of competitive market new problems with management efficiency appear, the essence of which is in need of organization of enterprises information flows into a single information space. That’s for what the 13 -Technologies are
created, which are useful for solving problems in foreign trade activities. While using information technologies an index of intensity of Internet technologies and their penetration rate should be considered, which will allow successful implement of enterprise management.
Together with the achievement of the quality level of the information technology development, the practice of strategic management efficiency solutions of complex economic problems will get a powerful tool to automate the collection, processing, storing, analyzing, organizing, sharing and reporting the information of any enterprise. It requires:
- a range of measures to achieve a new level of performance of the industry (as nowadays most companies are focused on work with foreign customers, while the domestic market is still in its infancy);
- support for start-up movements, which lay the foundation for the emergence of new approaches and trends, allows to become the cradle of big business in the future;
- creating an environment for the physical comfort for the players of the IT market.
Due to the joint, effective and efficient operations of the business elite and the state, the Ukrainian high-tech industry has a chance to not only catch up, but also overtake Europe in the next five to eight years.
References:
1. Solozhentsev E. D. 13 - Technologies in the economy. - P. 5-20
2. Arkhipova Z. V., Parkhomov V. A. Information Technologies in Economics: Studies. Allowance. - Irkutsk: BSUEL, -2003, - 184 p.
3. Trofimov V V Information systems and technologies in economics and management. - Glava 1. - P. 10.
4. Toporets A. Y. Information Technologies in Economics: Studies. Allowance. UDC 519.68. - Moscow, - 2005. - L. 5.
5. [Electronic resource]. - Mode of access: http://reklamaster.com/
6. [Electronic resource]. - Mode of access: http://www.ukr.net/news/tehnologii.html
7. Bozhko V P., Vlasov D. V., Gasparian M. S. Information Technology in economics and management: Teaching Materials. -M.: EAOI. - 2008. - 120.
8. [Electronic resource]. - Mode of access: http://investukraine.com/sectors/information-technologies
Bakhyt Arnabol Bakhytuly, President of «Kazsportinvest» JSC, Russian Scientific-Research Institute of Economic of Agriculture of Russian Academy of Science,
postgraduate student
Nurgazina Gulmira Esimbaevna, Candidate of economic sciences, associate professor, candidate for a doctor's degree E-mail: gulmira_66@mail.ru
Globalization and internationalization of world food and agricultural product markets
Abstract: Interpretation of globalization and internalization influence on the world food and agricultural product markets is examined in the article. Moreover, the global problem of food safety is also examined.
Keywords: globalization, internalization, global economic problem, agricultural product markets, world food security.
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Globalization and internationalization of world food and agricultural product markets
Being an objective trend of the development of human civilization, globalization provides additional opportunities and offers great benefits to the economies of countries. Due to this objective process the production costs saving is reached, resources allocation is optimized on a global level, the range is broadened, the quality of products in the national markets is heightened and scientific, technological and cultural achievements become more available. But this process involves the costs and risks for national economies of both rich and poor countries. Regarding those countries which do not have possibilities for controlling what is happening outside their borders, global and natural processes can bring a negative impact.
The companies’ aim for concentration is induced by the competitive advantages of large businesses over the small and medium-sized economic units. These are: incomparable possibilities of financing the new products development and quick implementation into mass production; relatively easier loan approvals, availability of bond financing and availability of governmental support in case of emergency; setting of the production program on a larger market where there is always an effect of averaging the degree of volatility; opportunities for production diversification; cutting the production and marketing costs due to the economies of scale; larger export capability due to low production costs and well-developed sales network beyond national economy; possibility of heightening the level of strategic planning to the highest level of corporate management without causing any damage to the efficiency of its functioning and keeping the low level of operational control and management by the management sector; ability to withstand the outside impacts. All of these factors lead to strengthening of the concentration processes along with embracing the new levels of quality. Having survived four waves of mergers and acquisitions since the beginning of XX century, by the end of the 2nd millennium world economy had reached the new stage — a stage of globalization. Contracts between aircraft-making companies Boeing and McDon-nel Douglas, car manufacturing concerns BMW and Rover Group, Daimler-Benz and Chrysler, oil companies British Petroleum and Amoco, Mobil and Texaco, financial institutions Morgan Stanley and Dean Whitter Discovery, auditor companies Coopers&Lybrand and Pricewater-house and companies from other sectors confirm this thesis. Concentration and globalization trends have also affected companies in the food industry.
For several years now Eastern Europe and USA are being shaken by the mergers and acquisitions (M&A) in this sector, and the volumes of these transactions are getting accounted for larger and larger sums of money. The merger of Guinness and Grand Metropolitan into Diageo company is recognized as the biggest M&A transaction that has been carried in recent years in the food industry. This transaction, the cost of which is estimated at £ 24 billion, led the united company with annual sales of $12 billion to the same level as that of Allied Domecq, a leading corporation in the food industry. World-famous brands such as Gordon’s Gin, SmirnoffVodka,
Guinness, Bailey’s, Pillsbury and Haagen-Dazs represent just a small part of the new company’s production.
The USA market occupies the first position in M&A transactions volumes rating. Over the last few years there have been carried more than 40 transactions with the overall cost of over $100 billion. The most significant one is the acquisition of Kroger Co by Grocery, the top bakery company, for $13 billion. Among other M&A transactions that could also be mentioned are: Hicks, Muse, Tate & Furst investment company’s acquisition of a part of American Home Products company, which owns such successful and proven trademarks as Jiffy Pop and Chef Boyardee, for $1,2 billion; IBP Inc.’s expansion in the meat market by way of acquisition of Russer Foods, the USA’s largest processed meat products manufacturer with an annual sales of $150 million; the USA’s largest poultry manufacturer company Tyson Foods’ acquisition of Hudson Foods corporation for $700 million in 1997. Regarding the restaurant business sector, the most noticeable was the merger between Ralcorp Holdings Inc.’s cereal and snack businesses with General Mills in 1997 which cost $570 million.
European market is lagging behind the USA market in terms of number and volumes of transactions. The merger of Irish companies Avonmore Foods and Waterfood Foods could serve as an example of activity expansion and diversification by means of M&A transactions. The united Avonmore Waterfood Foods became the leading company in cheese production and occupied the 4th position among the European companies in milk and dairy products sales. One of the last M&A transactions that was carried on in Europe (in March 1999) was between Danish company Danisco and Cul-tor corporation, the producer of food additives from Finland. The acquisition of the latter cost Danisco $1,4 billion. Among the transnational M&A transactions that can be mentioned there are Sainbury’s (UK; the largest operator in food supermarkets segment) acquisition of Star Markets (USA; owns 60 supermarkets in Boston) for $500 million and Coca-Cola Bottling’s (USA) purchase of rights for the UK Cadbury Schweppes (3rd largest operator on the world beverages market) corporation’s trademarks for $1,871 billion. Unilever, the Dutch-British world leader in the food industry, has been taking an aggressive stance in developing markets. Over the past few years the company has acquired ice-cream producing monopolies in Brazil, Argentina, Colombia and Mexico.
The processes of mergers and acquisitions extend beyond the transactions between companies that are already present in this market. For instance, after the completion of one of the purchase transactions, which is estimated at $7,7 billion, DuPont Co., one of the world’s largest chemical companies, will become the sole owner of Pioneer Hi-Breed International Inc., the world’s largest crops and seeds producing company. In our opinion, all the above-mentioned examples of M&A transactions (see the table) demonstrate well the broad scope and activity of concentration processes that are now widely observed in food industries of developed countries. But what is more important is that the results ofM&A transactions provide
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a better basis for the most accurate determination of the market value of a company (particularly ofthat being acquired) and
The advantages of economic globalization do not realize automatically, and not all countries feel them equally. It is clear that these integrating rates do not reflect the acceleration of economic growth in some world parts, as well as continued stagnation in other world parts. Global rates for now depend primarily upon internal conditions and politics of economically the strongest countries.
The problem of steady, dynamic growth of world economy still expects the solution, and, probably, the potential economic globalization is still insufficiently used for this purpose. Benefits from globalization are distributed unevenly and at the view of many countries — it is unfair. All achievements of the economic globalism of the last two decades XX century did not take off from the agenda the overcomingproblem of dangerous gaps in levels of countries’ economic development, a task, which in the 70’s was in epicenter of the movement for a new international economic order. For 20 % of the population of the planet living in the rich countries 86 % of world GDP, and are the share of the poorest 20 % — only 14 %. The remaining disparity is not only the heritage of colonialism and historical destiny, but also the result unfair and unequal cooperation today.
Unilateral advantages of globalization leave many countries and regions on the periphery of progress and even out of its sphere. The problem of more equitable distribution of economic globalization process of keeps relevance and continues to excite the international community.
One of aspects of the world economy globalization is the interstate strategy formation of trade in agricultural production, in the process of realization which on the international scene interests of different groups of countries face. The agricultural sector of the majority of economically developed countries is protected by a difficult and quite effective state system of measures, which concludes such tools as tariff system, non-tariff restrictions, quantitative restrictions of import, selective licensing, voluntary restrictions of export and etc. The protectionist system is supplemented with the state subsidizing of national agricultural producers by means of grants, preferential financing and other forms. Annual financial support of agricultural sector of economically developed countries reaches more than 250 bln. dollars. As international trade is one of the most important moving forces of economic growth of the world community, a question of essential and
for correction of the investors’ guidelines for estimating the attractiveness of the analyzed sector as a whole.
fast decrease of barriers in trade of agricultural production is obj ectively very important.
The modern stage of global food resources formation is characterized by the system crisis of the world market posing serious threat of food security.
The deficiencies of world food resources, the increase in prices for the most important types of production generated by excess of demand over the offer, aggravated by global warming of climate, a lack of hydro carbonic raw materials, speculation and politicization of commercial transactions assume need of acceptance of j oint efforts of the world community on rendering food aid, strengthening of system of social protection, innovative development of agriculture on the basis of expansion of scales of investments.
The condition of world food security defines tendency, essence in which in the following:
• Hunger scales in the world are increasing, number of starving steadily grows, and the whole regions till some years in a row are in a condition of an acute shortage of the food;
• Problem of the millennium — to cut in the world starving by half and underfeeding (to 500 million people) it is not carried out. Moreover, since 2006 their number increased almost by 70 million people and now there are 923 million people;
• Along with cumulative action of many factors, food neediness of millions of people is caused by high prices of food, worsening quality of life and threatening achievement of long-term global food security;
• The initial response measures (control of prices, export reduction, etc.) accepted by the governments, make only the limiting impact. Many of these measures, being quick, in the long term are inefficient and have negative impact on level and stability of the world prices;
• In the long term high prices of food can be favorable to agriculture in all developing countries if they are followed by providing the major public benefits and improvement ofquality of life. Advantages which small farmers will get, can stimulate sustainable economic development, and also provide stability of the rural territory.
The revealed tendencies of development of world food market taking into account the limiting factors causing deep processes in world economy do not allow to predict high rates of a gain offood and raw material resources, even in remote prospect.
Acquisition (country) Business area of the company aquired Purchasing company (country) Transaction date Amount of transaction, $ million P/S P/E
Randalls Food Market (USA) Restaurant business Safeway (USA) Tule 1999 1,43 0,66 40,65
Cruzcampo (Spain) Beer Heineken (Netherlands) May 1999 914,6 n/a 23,96
Alba Proteins (UK) Pet food IAWS (UK) October 1998 5,72 n/a 19,07
Dean Foods Agriculture Agrilink (USA) 1999 400 0,71 9,85
Host Marriott (USA) Restaurant business Autogrill (Italy) Tule 1999 529 0,77 8,4
Hudson Foods Inc. (USA) Poultry farming Tyson Foods (USA) September 1997 643 0,39 -
Star Markets (USA) Food supermarkets Sainsbury (UK) June 199 482 0,45 -
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Communicational delay backgrounds in modern World economy forecast: obstacles overcoming milestones
By calculations of experts of FAO till 2030 production of grain will increase by 20-21 %, and the total amount will reach 2149-2150 million tons at requirement of2675 million tons, use of seafood will be 100 million tons at requirement of 168 million tons. The gain of foodstuff making till 1985 — 30 million tons a year, in 1985-1995 — 12 million tons is reduced, in 1996-2030 no more than 9 million tons a year are supposed. Dynamics of demand thus will be opposite as the population of the planet in 2030 will be about 8,9 billion people (an annual gain — 90 million people) at the general unevenness of its distribution on regions of the world.
Situation with food supply is aggravated because of aspiration of the states to increase quality of the food inaccessible now, approximately, for one billion people. It is specified in the Report on the world development of2008 prepared by the staff of the International bank of reconstruction and development of the World bank that for a solution of the food problem during the period from 2000 to 2030 it is necessary to increase production of grain by food needs for 50 % and meat for 85 %.
Negative tendencies of formation of food resources make and will make depressive impact on the food market as in general, and the certain countries, irrespective of their economic state.
Tendencies of planetary scale (food crisis, global climate change, deficiency of hydro carbonic raw materials, an increase in prices for energy carriers and food, etc.) adversely influence on all national food systems, promoting formation of potential threats of food security. The deficiency increased by imbalance of supply and demand; export reduction; speculative tendencies and politicization of commercial transactions, makes depressive impact to the world food market. It means that the food security of the state can be guaranteed only at further dynamic innovative development of own production of raw materials and food, stability of the rural territory and eradication of poverty as social phenomenon.
Versatility of a problem of food security dictates the need of searching one more way of its providing. The combination of the following elements can be optimum option: preservation and expansion of internal production of the food, ensuring steady import, creation of appropriate stocks of the food. And any of listed depending on a situation in each concrete country can be the leading element.
For many states carrying out the effective and reasonable policy aimed at self-sufficiency by food — a basis of food security. Other countries need program implementation of accumulation of currency resources for purchasing food abroad and acceptance of preventive measures for decrease in damage which can result from sudden loss of access to the food markets. Thus the most obvious step on this way is the formation of internal reserves of the food for consumption during the crisis period. But the use of stocks for satisfaction of demand in an emergency situation is a temporary measure. Eventually in the course of ensuring national food security achievement of an effective ratio of consumption level and self-sufficiency by the food, and also establishment of optimum size of import of agricultural production in the presence of effective system of insurance in emergency situations is essential to the majority of the countries.
Thus, the main global economic problem of the agricultural markets is ensuringfood security. The problem of food security mentions as ensuring sufficiency of deliveries of food at all levels — global, national, regional and individual as the system of insurance upon the risks connected with these deliveries.
The optimum combination of three elements — internal production, import, creation of public stocks — allows creating effective system of food security. Import from different countries promotes reduction of risk in connection with a crop failure in the export countries. Internal production serves as an instrument of insurance against risks connected with sufficiency and availability of import. Accumulation of stocks is temporary, but rather effective measure for elimination of sudden shortages of food.
Within multilateral system of world trade regulation it is necessary to form a set of rules which will consider specific features of different groups of countries, to have sufficient flexibility, to promote implementation of the most suitable combination of measures in the field of a trade policy to reach food security of all countries. However, trade liberalization is not the only way of achievement of food security. Trade and internal production have to complete each other organically.
Reforms in agricultural area have to be directed on strengthening of food security and achievement of steady internal production, ensuring access to the stable and predictable world market.
Dvoynykh Kostyantyn Yevgenovych, Odessa national university, Ph.D Economics E-mail: dvoynykh@yandex.ru
Communicational delay backgrounds in modern World economy forecast: obstacles overcoming milestones
Abstract: The article is devoted to forecast perspectives in modern World (network one) economy conditions. As a corresponding invariant for transition economical conditions the international ethnical processes are defined.
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