From: gd8f@kelvin.seas.Virginia.EDU (Gregory  Dandulakis)
Subject: Re: Greece and the EC (oil?)
Organization: University of Virginia
Date: Mon, 11 Jan 1993 22:51:52 GMT

In article <1993Jan10.035304.14435@neptune.inf.ethz.ch> santas@inf.ethz.ch (Philip Santas) writes:
>
>Switzerland was not a rich country as UK or Holland were in the previous
>centuries. However the banking system introduced in the 20th century,
>and the fact that it has not been destroyed by the two WW, together
                                                            ^^^^^^^^
>with a wise management of the _abudant_ capital in investements in the 
 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
>american continent, enables it to show a strong economy.
 ^^^^^^^^^^^^^^^^^^

That's a very, very interesting point Philipos.

A very common case is that capital which is exported from some countries
to be invested in other countries which offer better profits, in the long
run is lost as asset for the country of origin. Reason? The people who
manage these money finally find, both economically and lifewise, attractive
to stay in their new settings. This is true for all the less developped
countries and some developped ones (eg I was reading somewhere that the
majority of British capital invested in the US practically is lost forever
for Britain).

Some other countries though have benefited immensely from this freedom.
Examples that I admire are Switzerland, Sweden, Netherlands. In all these
cases, the investments in the new lands (eg US) have been used, not only as
more profitable for the capital, but also as a wonderful vehicle to (1) built
marketing and distribution networks for their products made in the country
of origin (I admire the Swedish Pharmacia for example), (2) to transfer
managerial and technological expertise very fast in their country (eg the
Swiss pharmaceutical giants), (3) to take advantage of the state funded
research infrastructure (people and labs) for acquiring access to new
innovations for their parental establishments (eg Japanese firms in the US,
and lately emerging some Germans ones too) and (4) to facilitate the
transfer of capital from the other country belonging to third parties,
and to be invested in the original country (eg a relatively small Dutch
biotech company (name ?) in the US was bought by an other american (Hyclone)
just for the purpose to facilitate their access and investment in Europe).

What mode of capital transfer one country will adopt, I have come to the
conclusion, that it depends both on objective economic factors in the parental
country and in subjective cultural attitudes. Eg, capital exported from
Greece for investments in merchant marine is very likely that will benefit
Greece in the long run since there is the mechanism in Greece which helps
that: easy access to experienced higher ranked crues, special treatment
financially by the state of this sector of the economy etc. The same in
Sweden for biologicals since Sweden has managed to have created one of the
most educated and trained people in the area, plus excellent state funded
research facilities.

On the other hand, cultural factors do play a role. A British entrepreneur
or highly skilled specialist is easily assimilated by the american culture,
and permanently satisfied by the economic benefits. The same for an Indian
investor, who even if has a qood idea for business in India, he will most
probably avoid the anti-business climate there and stay in the US. In
contrast though, Swiss, Swedish ar Duch people have such a strong sense
of superiority of their cultures relative to the US (interestingly, *even
though they are very flexible into accepting to blend with the other cultures*,
if it is needed for a while), that this drive them to keep very close
affinity with their country of origin (I have experienced this here with
both Swiss and Swedish researchers who were visiting our lab for a short
time).


Gr

PS: Educated people is one example of easily tranferred and invested
    in various places capital :-).