Criticaly examin the role of international creadit in contemperoray Essay

Criticaly examin the role of international creadit in contemperoray economies - Essay Example e in the development and expansion of the international business, and further provides support, tools and opportunities for progressive growth (Vidal, 2002). The challenges faced by international credit are set of political instability within specific regions associated with the international credit. Considering example of Central Asian countries, before Sept 2001, different countries agreed to provide financial credit to these nations to develop infrastructure, however soon after US-led invasion of Afghanistan, the economic conditions of Central Asian countries took u-turn. The wave of terror affected the society and economy of these countries severely, to an extent the all the international credit facility was either halted or roll-back. This reference makes it explicitly clear that international credit is not just economic driven; rather it is complicated exercise and assistance (Kaihara, 2003). The financial credit facility is offered to the countries to increase their foreign revenue which shall strengthen the purchasing powers of the country, and is able to support the ailing economy through infrastructure development and resource management. As per general rule, the international credit facility is offered to countries having reserves less than estimated amount of three-four months of import bills. However the institutes have explored that "availability of capital flows to offset current account shocks should, on the face of it, reduce the amount of reserves a country needs, but access to private capital is often uncertain, and inflows are subject to rapid reversal" (Jan, 2002). There have been occurrences where the developed and economically capable countries have stumbled, "it is therefore no surprise that the traditional current account approach has been viewed more sceptically in recent years", and there is a growing conviction that emerging market countries with li beral capital accounts require more reserves rather than less, and that we should look