Investment Management Report: Analysis of OECD Countries Investments

This report provides an in-depth analysis of investment management within the context of the Organization for Economic Co-operation and Development (OECD). It examines the economic landscapes of several member countries, including Australia, Japan, Austria, and Germany, evaluating their potential for foreign investment. The report discusses key economic indicators such as GDP, labor market trends, and government policies. It highlights the challenges and opportunities present in each country, such as currency instability in Japan, labor shortages, and regulatory environments. The analysis considers factors like trade regulations, infrastructure development, and political stability, offering insights into the attractiveness of each country for investors. The report also touches upon broader themes like economic growth, employment, and the impact of government policies on investment climates, providing a comparative perspective on the investment environment across the selected OECD nations. The report also provides an overview of the economic performance of each country, highlighting the strengths and weaknesses that influence investment decisions.

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INVESTMENT MANAGEMENT
Student’s Name
Course
Professor’s Name
University
City (State)
Date

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Investment Management
Organization for Economic Co-operation and Development, OECD, is a global network
with 35 member states, the organization was established in 1961 and currently all its members
the developed countries with high incomes. Its headquarters are in France, Paris. The member
states create a forum that discusses the market economy possible investments in member
countries and they also encourage foreign direct investment in the member states. They help
solve problems amongst themselves and establish policies that are fair both in the domestic
economy and the international economy too and improve the world’s well-being.
Australia is one of among the active member states of OECD since the year 1971, it has a
strong economy and potentially profitable in terms of investment. It has a high standard of living
and the GDP of the economy is quite high. Australia has participated in contributing contribute
in agriculture, trade policies, energy, education and also taxation. (Sharrock, 2016). Australia had
to spend lower due to a higher GDP growth

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Australia has forty years in membership with the OECD, Australia has helped many
women and other underemployed groups in the secure employment, its strong economy is
predicted to have a shortage of labor in future due to the incorporation of the whole population in
the public service Australia has actively participated to achieve the OECD goals such as
expanding the world trade, improving economic development, creating employment and
improving the standard of living in the country. Same is expected to all member state of the
Organization for Economic Co-operation and Development.
JAPAN
Japan joined the OECD in 1964. Japan has various sectors such as technology, education,
agriculture, energy, finance, innovations among others. Though it is known to be productive
japan faces a number of challenges. For instance it’s struggling with the government huge debts
and also there is a quick rate at which the working population is declining. This into

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consideration, Japans’ GDP is generally declining. There is low foreign investment in major
fields in the economy. Japan has a high export record of motor vehicles and steel products. Its
major export partners are United Stated, China, Korea and Taiwan. Though it still faces
competition from China and South Korea Japan has shifted its focus primarily on exporting
goods such as hybrid vehicles and robotics which makes it dominant in that sector in the market.
Japan has the largest world’s private sector and it is the world’s largest creditor. Most developing
country has a huge debt obligation to Japan.
There’s is a widening gap between the manufacturing and the service industry. Also the
government expenditure is higher compared to the revenue (OECD, 2017) This will lead to a
deficit in the total revenue and the economy will deteriorate.
The falling yen is not good for investors, therefore discouraging investment in Japan.
When stocks are bought in dollars and sold in yen the investor will not be sure of whether they

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will generate a profit of a loss since the currency is unstable. This calls for the need for investors
to hedge your investments until they are sure of what direction the currency takes. Uncertainty
on the appreciation or depreciation of the yen is unattractive to many investors. Therefore it’s
more likely that investors could forego the option of investing in Japan due to its instability in
their currency and opt to venture in other countries with favorable business environment. On
April 30th, the bank of Japan reduced the consumer price index to 0.8% from 1.0% as in January.
It also reduced the fiscal year from 2.1% to 2.0%. This confirms that Japan is not a certain
country as far as investment is concerned (Ashworth, 2015).
The equity market and the economy of Japan is mostly affected by the central bank. If the
bank lowers the interest rates, they make loans attractive and competitive. Therefore individuals
will loan more and thus spend more. They may buy a car, a house, invest or just spend the
money. When consumers spend more money this implies the economy is growing. Therefore if
the Feds lower the interest rates investors will invest more. Lowering the interest rates has both
positive and negative impacts, the investors will secure loans and invest and will also create
business opportunities in the country therefore they will create employment opportunities. The
negative impact will be that if the interest rates are low the yen will weaken.
AUSTRIA.
Austria signed the convention of the Organization for Economic Co-operation and
Development, OECD in 1961. Austria is currently strengthening its economy by the recent tax
reforms and an improvement in participation in the international trade. Therefore there have been
policies enacted to and deeper structural reforms that will improve the fiscal stability and social
cohesion in the economy.

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Austria is among the wealthiest states in the OECD. They have improved tax reforms
however their output growth is declining due to various factors such as the increased number in
labor supply, women, the elderly and the large number of immigrants has been incorporated in
the labor force though the number of working hours per individual had been reduced. There’s
also the adoption of information and technology which is faster adopted by the young generation
and the highly educated individuals but the elderly and the immigrants seem to lag behind. This
has slowed the rate of productivity and Austria is losing market shares. Technology and other
business innovations will improve the business models and will also most business operations
will be faster effective and easier it will also improve productivity and social cohesion will
improve mostly through social media that is the most recent form of interaction (OECD, 2017).
Digitalizing the economy will improve productivity. People can work at their homes,
communication will be made faster and easier also most businesses can be done online therefore
it saves time and resources.
Austria’s’ economic performance is on the rise with declining unemployment rates.
There’s is also an increase in foreign investment in the country in the service and the industrial
sector. The large number of immigrants that relief the strain of the ageing population therefore
the economy is labor market is always flooded with long-term skilled labor. Trade is important in
Austria though there are complex regulations governing trade and investment in the country. For
instance there is no transfer of currency, no access to foreign exchange of repatriation of profits
(freedom, 2017).
Investors may or may not opt to venture in Austria since it has strict restrictions and
regulations on foreign investment also it has policies that are favorable to investments. Investors
will be attracted to the well-developed infrastructure, it’s skilled and highly productive work

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force. Austria also has a wide range of pharmaceutical industry therefore attracting big
companies in the biotechnological sector. Austria is politically stable and provides a conducive
business environment. There’s also high personal security and quality of life is high (Trade,
2017).
Despite being wealthy and being a potential target to investors, Austria has also some
deficits that might scare away investors. Austria lacks migration laws that controls migration, the
country is dependent on Central and Eastern Europe where investments have taken place which
is risky considering they are related to a number of crisis. Also the Austrian economy is not
restrictive on its internal market. This can lead to monopolies, overpricing, poor standard of
goods in the market and other violations in the market. Repatriation of profits to the home
country and also the restriction on foreign exchange are among the unfavorable conditions
discouraging foreign investment.
Austria’s GDP was worth 283.43 billion US dollars in 2016. This represents a 0.62% of
the world’s economy (Economies, 2017).

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GERMANY
Germany sighed the OECD in 1916. German is well known in the motor vehicle industry,
machinery, chemicals, computers and electronic products, foodstuff and also in the plastic and
rubber industry. Germany has an outstanding economic pace growth due to major export of
motor vehicles from the country which is the most dominant economic activity in Germany.
There has been a fixed steady growth in investment. The winter weather resulted to increased
construction activities. The private sector increase their consumption, unemployment decreased
and
Germany has been struggling with its labor crisis since 2008. The private sector has been
strengthened and unemployment has been reduced. Germany also introduced a minimum wage
which has now improve the life style of many that have low wages. Though the economic
performance has been great, Germany is weak on labor productivity which is seen to be low in
the service sector (Fuentes, 2016).

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Investment in Germany is attractive as many other euro countries. Uncertainties in the
market economy can possibly damage the investment potential. Too much regulatory such as
requirements for market entry, restrictions on advertisement and productivity are most likely lead
to a decreased investment. Germany being a member of the European Union requires it to
participate in bailouts. There bailouts are expensive and it affects the economy severely
especially if many countries faces these problems and have to be bailed out. This union also has
debt issues and if one country fails to pay their debt then the outcome ends up affecting other
countries Germany included. The ageing population in Germany is also a warring factor to
investment. The working age is ageing and the fertility rate of the country is relatively low, this
will imply that in future the older population will be greater than the population in the labor
industry. The older people will increase dependency rate and the economy will suffer from
insufficient manpower in the labor market.

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Despite the risks involved in investing in Germany, the German economy has a strong
economy it has specialized in major exports and the general GDP of the country reaches up to
3.573 trillion euros on a normal basis. (Kuepper, 2016). Germany is a country with a solid
economy, but it requires investment for a stronger economy. The huge number of immigrants
especially in Berlin City will add to the working force in the country. To have a large number of
investors Germany should loosen on its regulations that are a restrain to investors. Applying low
interest rates in banks and ensuring political stability is key for high productivity in investments.
The city of Berlin has various challenges major one being the gentrification problem.
Berlin is known for the birth of most of the working class in Germany and it inherits culture
policies to all the cities around. The problem of fast raising rents and lack of space for people to
live leads to displacement. The German government attempts to subsidize some residential
houses was fruitless before Berlin became rampant for hiking rents. Several laws have been
passed hopefully to help reach a manageable rent prices. As Berlin struggles with gentrification
and displacement of people, investors may find an opportunity to invest in real estates. Houses
that are of manageable rents are at a higher demand and they can therefore venture by taking the
gentrification problem at their advantage.
Germany still tops on the economic performance among the OECD member countries.
Investments have improved and the exports have also improved. Increased investments
contributes to a higher GDP in the economy, also investors have created employment to the
working population. Though there’s the problem of repatriation of profits to the home country of
the investors, a portion of the profits is also left in Germanys’ economy and it has been use to
improve infrastructures such as health care, construction of roads and developing
telecommunication.

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Japan, Austria and Germany are all fulfilling the Organization for Economic Co-
operation and Development goals. There have been an improvement in policies, investment has
been promoted and development in the countries can be accounted for. There has been an
improved standard of living in these countries by creation of employment improved
infrastructure among others. There is also strong partnership and creation of unions among
members. There has been an improvement in health services, telecommunication, infrastructure
and policies on maintaining the environment has led to environmental conservation.
The investments in foreign countries have created custom unions that facilitated trade in
the region. These unions come along with benefits such as alleviation of taxes to goods across
member countries, it’s is a good thing but then countries end up losing valuable tax revenue due
to the free exports and imports. Also involves moving of capital goods and services across
borders through investment. It brings goods and services into the country also improve the
domestic growth of the country, investors also improves competitiveness between the foreign
and the domestic organizations thus making companies produce goods and services of better
quality. Foreign investment will also create new employment opportunities to the domestic
population therefore the unemployment rate is reduced.
Foreign investment also has its negative consequences on the domestic economy. Small
businesses and companies are killed due to the monopoly power of these companies. These
companies have capital intensive technology that is quite expensive. Chances are that these
companies will develop to be monopolies the market, they become the price setters and the
citizens are the price takers, they exploit the common citizens with high prices.(Parikh, 2012)
This calls for government intervention in controlling their market operations thro price setting
and other policies that keeps them in check.

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Reference List
Ashworth, D., 2015. Inveesting in Japan has some risks. [Online]
Available at: https://finance.yahoo.com/news/investing-japan-risks-150706042.html
Economies, T., 2017. Austria GDP. [Online].
freedom, I. o. e., 2017. ECONOMIC FREEDEOM. [Online].
Fuentes, A., 2016. OECD ECOSCOPE. [Online].
Kuepper, J., 2016. The definative guide to iinvesting in Germany. [Online]
Available at: https://www.thebalance.com/the-definative-guide-to-invest-in-germany-1979023
OECD, 2017. EconomicSurvey of Austria. [Online]
Available at: www.oecd.org/austria/economic-survey-austria.htm
OECD, 2017. eonomic survey of Japan 2017. [Online].
Parikh, V., 2012. LetsLearnFinance. [Online]
Available at: www.letslearnfinance.com/advantages-and-disadvantages-of-fdi.html
Sharrock, G., 2016. THE CONVERSTION. [Online]
Available at: theconversation.com/oecd-figures-are-not-what-they-seem-in-higher-education-
60786
[Accessed 6 sep 2017].
Trade, S., 2017. AUSTRIA: FOREIGHN INVESTMENT. [Online]
Available at: https://en.portal.standardtrade.com/establish-overseas/austria/foreighn-investment