Capital markets have a big role for the economy of a country
because it has two functions at once, namely economic functions and financial
functions. It is said to have an economic function because the capital market
provides facilities and facilities that bring together two interests ie those
who have excess funds (investors) and parties that require funds (issuer). With
the capital market, the party with the excess funds can invest the fund in the
hope of obtaining rewards in the form of dividends or capital gains, while the
company (issuer) can utilize these funds for investment without having to wait
for the availability of funds from the operations of the company. The capital
market is said to have a financial function because the capital market provides
the possibility and opportunity to obtain return for the owner of the fund, in
accordance with the characteristics of the selected investment.
In macrostructure, the capital market is heavily influenced
by how the government policy is both fiscal and monetary. Conditions that
occurred in 2009 is a significant global economic downturn that causes the
volume of world trade to contract. After experiencing an average expansion of
8.1 percent over the past five years, in 2008 the growth in world trade volume
declined sharply to 4.1 percent. Indications of a decline in world trade volume
are reflected in a sharp decline in the Baltic Dry Index which is a barometer
of world trade volume.
For a country, the immediate negative impact is the decline
or slowdown in trade and investment growth. Transmission of the impact of the
global economic crisis to the economy of the country entered through two
channels, namely the financial channel and trade channel. The impact of the
crisis through financial channels can occur directly or indirectly. Direct
impacts occur when a bank or financial institution buys the toxic assets of a
issuing company experiencing liquidity difficulties abroad. Another impact is
the withdrawal of funds from a country by foreign investors experiencing
liquidity difficulties (deleveraging). In addition, it can also occur through
the action of moving a portfolio of high-risk investments into a lower risk
(flight to quality). While indirect impacts of the financial pathway occur
through the emergence of constraints to the availability of economic financing.
Impacts through trade channels arise through the weakening performance of
imported exports which in turn affect the real sector and potentially bring
credit risks to banks. It also has the potential to put pressure on the balance
of payments.
The high interest rates of the central bank affect the low
liquidity. Thus it can be said that the role of macrostructure has a very big
influence on trading liquidity in a country's capital market.
PROTECTION POLICY
International trade policy is any action of the government
or the State, either directly or indirectly to influence the composition,
direction, and forms of foreign trade or trading activities. The policy in
question can be tariff, dumping, quotas, import restrictions, and various other
policies. When compared with the implementation of domestic trade, the
international ban is complex and complex.
The complications of international trade are due to the
following:
- Purchases and sellers are separated by state boundaries.
- Goods must be shipped and transported from country to country.
- Differences between one country to another in either, language, currency, estimate or scales, law in trade and so on
- Different natural resources.
Government protection policies to protect the growing
domestic industry (infant industry), and protect new companies from arbitrary
large companies with the advantages that they have, other than competition of
imported goods.
The purpose of protection policy is:
- Maximize domestic production
- Expanding employment
- Nurturing traditional
- Avoiding the risk that may arise if only rely on one commodity mainstay
- Maintain national stability, and not rely on other countries. In other words it reduces the percentage of dependence with other countries.
Thank you (^_^)
