MOLDOVA INSTITUTE OF INTERNATIONAL ECONOMIC RELATIONS Economy of foreign countries TRAINING MANUAL Edited by Y. Kozak, А. Gribincea Chisinau-IRIM 2019 ISBN Economy of foreign countries : Training manual . - Edited by Y. Kozak, А. Gribincea – Chisinau- IRIM, , 2019 - 210 p. Recommended by the Academic Council of TSU Recommended by the Academic Council of ONEU Recommended by the Academic Council of IRIM Authors: Y. Kozak , А. Gribincea , Т.Shengelia , V. Kovalevsky, L. Sandyuk, O. Sulym , V.Kurylyak, , D.Burlachenko, The training manual contains the most important information about the economies of foreign countries. The peculiarities of the structure of national economies of individual states, typological and regional groups of countries, factors and trends of their development, internal and external economic policies of states and regional associations, features of their business cultures are considered. The development of the economies of the countries of the world is analyzed in the context of their foreign economic relations, the evolution of modern integration processes. Manual is intended for students of economic universities and faculties of the specialty "International economic relations", for specialists in the field of international economy. © Yuriy Kozak , 2019 © IRIM , 2019 CONTENTS PREFACE 5 CHAPTER I. THE NATIONAL ECONOMIES IN THE WORLD 7 ECONOMIC SYSTEM 1.1. The notion and main characteristics of the national economy 7 1.2. Main indicators of the country's economic development 16 1.3. The essence and direction of state economic policy. Models of economic development 24 1.4. Ethno-cultural features of national economies 28 1.5. Globalization of modern international relations and integration 30 processes in the world economy 1.5.1. World economy as the complex of national economies 30 1.5.2. World economy as the unified supranational space 32 1.5.3. Regional integration structure of the world economy 35 1.5.4. Globalization of the world economy 37 CHAPTER II. CLASSIFICATION OF COUNTRIES IN THE WORLD ECONOMY 50 2.1. Variants of typological classification 50 2.2. Regional classification of countries of the world 55 CHAPTER III. ECONOMY OF DEVELOPED COUNTRIES 57 3.1. Most important characteristics that distinguish developed 57 countries 3.2. Dynamics of economic development of developed countries 63 3.3. Features of economic structure of developed countries 66 3.4. Economic policy of developed countries 69 3.5. The economy and economic policy of the United States of 72 America 3.6. The economy and economic policy of Japan 81 3.7. The economy and economic policy of Germany 90 3.8. The economy and economic policy of Great Britain 100 3.9. The economy and economic policy of France 108 3.10. The economy and economic policy of Italy 118 CHAPTER IV. COUNTRIES WITH TRANSITION ECONOMIES 128 4.1. Preconditions of formation of the transition economy system 128 4.2. Economic reforms of transition period 131 4.3. Development dynamics and structure of the economy 135 3 4.4. Features of reforming the economy in post-socialist countries 137 4.5. The economy and economic policy of Russian Federation 141 4.6. The economy and economic policy of the People's Republic 141 of China 4.7. Economy and economic policy of the Republic of Moldova 160 CHAPTER V. THE ECONOMY OF DEVELOPING COUNTRIES 170 5.1. General characteristics of the economy and economic policy of 170 developing countries 5.2. Economics and economic policy of the newly industrialized 177 countries 5.3. The economy and economic policy of Brazil 189 5.4. The economy and economic policy of India 192 5.5. Economy of the least developed countries and features of their 199 economic policy BIBLIOGRAPHY 204 4 PREFACE In modern conditions, it is very important to know the economies of other countries with which each national economy interacts. The economy of any country is getting deeper into the international division of labor, becoming an active agent of international economic relations, expanding economic ties with an increasing number of states. A deep study of the characteristics of the economies of different countries, groups of countries and regions with which economic ties are established will allow all agent of foreign economic activity to get maximum benefits from cooperation with foreign partners and to avoid losses. It is important to know the economic potential of foreign partner countries, the sectoral structure of their economy, the type of their development, the peculiarities of economic traditions, the conditions for doing business, the economic policy of the government, and entrepreneurial culture, in order to choose the right economic behavior strategy towards them. Every business entity in a particular country, every government agency that carries out foreign economic activities must include in its staff the economists who possess such knowledge, deeply understand the characteristics of the foreign economic partner. The purpose of studying the discipline "Economy of foreign countries" is the formation of knowledge about the peculiarities of the economic life of different peoples. The mastering of this course precedes the study of the basic disciplines of the program of study in the specialty "International economic relations", creating prerequisites for their succesfull comprehention. The training manual consists of five chapters. In the first chapter "National Economy in the World Economic System", issues of predominantly theoretical plan are considered: it provides summarized information about the national economy, its essence, structure, type. Considerable attention is paid to the interaction of national economies in the global economic space, in particular, to regional and integration associations of countries of the world. In the second chapter, "Classification of countries in the world economy," a typological classification of the countries of the world in the regional and integration aspects is given. Three typological groups are distinguished: economically developed countries, countries with transitional economies, and developing countries. In the third chapter "The Economies of Developed Countries", the defining features of the economies of developed countries, the general features of their economic structure and policies, specific features of business culture are examined. Then, the features of the economy and economic policy of the United States, Japan, Germany, Great Britain, France and Italy are analyzed. The fourth chapter "Countries with a Transitional Economy" is devoted to the analysis of the economy and economic policies of post-socialist countries, the general features of economic reforms, and the specifics of their economic development. Particular attention is paid to the economy and economic policies of 5 such countries as the Russian Federation, the People's Republic of China, the Republic of Moldova. The fifth chapter, "The Economies of Developing Countries," analyzes the factors and problems of the economic development of a large group of countries in Africa, Asia and Latin America. The economy and economic policies of Brazil and India are examined in more detail. The economic policy of the newly industrialized countries and the problems of the least developed countries are analyzed separately. 6 CHAPTER I. THE NATIONAL ECONOMIES IN THE WORLD ECONOMIC SYSTEM Modern world community, according to the United Nations, includes 195 sovereign states (of which 193 are UN members). This number will rise up to more than 200 if we include countries and territories that have not received universal recognition. All countries differ significantly both in terms of the size of the territory and population, and in terms of economic potential, and, consequently, in their role in the world economy. At the same time, the national economy of each state is a component of the global economic system. Even the least developed countries contribute to the global process of economic development - by their natural or human resources, production activities (even insignificant on a global scale), consumption of imported products, etc. To date, there is no single state that would be outside the world market, would not had economic ties with other national economies. Nowadays the International territorial division of labor has become comprehensive as an important part of the globalization process. Globalization promotes the strengthening of economic ties between countries and deepening their interdependence. It leads to some standardization both the economic relations, and national economies. But each country brings to the econome of world community the pecularities of national economic structure and unique features of business culture This qualitatively enriches the world economy, adds to it dynamism and diversity. Each country has its own national economy. In the process of international division of labor, the system of the world economy has been formed, which is a set of national economies interconnected through international exchanges. Each national economy is the subsystem of the global economic system, which is based on the international and supranational division of labor, on the internationalization and integration of production and circulation, and operates on the market principles. 1.1. The notion and main characteristics of the national economy National economy is an economic complex of a country, characterized by branch and territorial structure, governance system and certain socio-economic relations. The general view of national economy can be expressed