Theme: Contents and forms of International Economic Relations Xodjamqulov Shahboz. Mm-54i Questions: Introduction

International Capital Movement(ICM) and Foreign Investment


The next system is ICM. The Movement of capital or its movement from one country to another for higher profits is considered a rapidly developing form of IER. International capital movement is a rather developed component of the international flows of factors of production. Its nature consists in the partial removal of the national capital, after which it is included to the manufacturing process or other turnover in other countries. Under modern conditions, the capital mobility is relatively high, although it has more restrictions than the International Trade. The growth rates of capital movements between countries are several times greater than the growth rates of both production and International Trade.
International capital movements can replace or complement the International Trade, if the efficiency of use of capital is higher than the result of International Irade. International capital movement is not a physical movement of production means, but a financial transaction: loans, purchase and sale of securities, the investment.
Enterpreneurs and the government carry out capital wihdrawals by granting loans or credits to foreign partners, organizing their business abroad and opening correspond accounts of their banks in foreign banks, purchase of securities and real estate in other countries. Simultaneously with the withdrawal of capital, any country also brings capital, that is,the process of International Movement of Capital. In essence, this basically means the transfer of financial obligations, financial flows from one country to another.
Specific forms of international capital movements are distinguished by the following features:

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  sources of capital origin;
  
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  the nature of use of capital;
  
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  terms of capital investment;
  
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  the purpose of capital investment;
  

By the sources of origin, capital is divided into official capital and private capital.