IB PRESENTATION

BHORANIYA DARSHAN DATTANI PRATIK

DAVRA NIKUNJKUMARPIMR MBA

MARKETING –A

Non economic rationales for governmental intervention

1- Maintaince of essential industries2- extensions of spheres of influence3- prevention of shipment to unfriendly contry4- protecting activities that help preserve the national identify

Maintaince of essential industries

The essential industry arguments states that a govt. applies restrictions to protects essential

domestic industry. So that the contry is not dependent on foreign sources of supply.

Protecting an inefficient industry, however, will lead to the high cost and possibility political

consequence as well.

extensions of spheres of influence

Spheres of influence is a territorial area over which political or economic influence is wielded by one nation. Sphere of influence, or sometime zone of influence or sphere of interest is a diplomatic term denoting an area in which a foreign power maintain rights superior to those of host nation. to maintain their spheres of influence, govt may give credit & encourage import from countries that join a political alliance or vote a preferred way within international bodies. Further trade restrictions may coerce govt to take a certain action to firm those who do not apply.

prevention of shipment to unfriendly contry

Group concerned about security use national defence arguments to prevent export, even friendly country of strategic goods that might fall in to hands of potential enemies. Trade control on non-defence good may also be used as foreign policy weapon to try to prevent another contry from meetings its political objectives. However, relation often renders such protect measure ineffective

• They could weaken Pakistan and reduce the threat level.

•Recapture the Pakistani portion of Kashmir

•Create a new state that would be militarily and economically weak and provide the much needed transit for troops and logistics transportation

•Project India as a regional superpower and warn all elements inimical to India’s security that India had the power to defend itself.

Why did India help in 1971? To Bangladesh

Non Economic point of view 

India also had an economic objective to dismember Pakistan. India was a country with huge population and needed additional resources to uplift its economy. The economic cooperation with Pakistan was all but encouraging. Besides that, the water resources of the Himalayas were needed for India for irrigation and power generation. Due to Pakistan’s strong military, India was unable to use the resources unilaterally. Despite being a third world nation, Pakistan was a huge economic market that was able to absorb millions of dollars worth of Indian commodities. But the hostility between the two nations retarded the possibility of a robust economic cooperation between the two nations. 

protecting activities that help preserve the national identify

Courtiers are partially held together through sense of cultural & national distinctiveness. To

sustain this collective identify, govt may limit the presence of foreign products in certain sectors.

Role of govt interventation

• A market economy depend on govt. restrictions as possible- the less invisible the “hand” becomes due to govt interventation the less efficiently the market will work.

• The invisible hand is notinfallible, given the need public good (national defense) & precautions that preempt those inclined to maximize personal gain unfair ways.

• Free market need to govt action to enforce contract property right, ensure fair & free competition, regulate certain sorts of non-economic activity. & provide general safety & security

Forms of govt, interventaion

• Central, regional or local govt. may actually own some means of productions, such as the Tennessee valley authority in the u.s that generate electricity for several state or airbus industries which is jointly owned by several European govt.

• The govt. can influence private consumption decisions such as buying good & services or by Subsidizing certain activity.

• The govt. can redistribute income & wealth in pursuit of some equity objective such as socialized medicine & walfare programs.

• Eg- Hongkong, britan, caneda, us are contempory market economics

THAN YOU