Colonel Nasser and the Suez Canal

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What action did Colonel Nasser take in relation to the Suez Canal Company in 1956?

He privatized the Suez Canal Company.

He nationalized the Suez Canal Company. (correct)

He sold the rights of the Suez Canal to Britain.

He formed a joint venture for the operation of the Suez Canal.

Which countries reacted violently to Egypt's nationalization of the Suez Canal?

Israel and Lebanon

Italy and Turkey

USA and Germany

France and Britain (correct)

What significant action took place in 1957 following the nationalization by Nasser?

Egypt declared war on Israel.

All British and French foreign direct investments were nationalized. (correct)

Nasser resigned from his presidency.

France and Britain increased their military presence in Egypt.

How did Egypt's policy under Nasser influence surrounding countries?

It inspired 'Arab socialism' and influenced nationalization in neighboring countries. Signup and view all the answers

When did Colonel Nasser become the President of Egypt?

1952 Signup and view all the answers

What was a significant action established by GM in 1929 regarding German business?

GM was allowed to acquire Opel. Signup and view all the answers

How did Nazi Germany handle foreign firms operating in the country?

Foreign firms were tolerated if they aligned with government policies. Signup and view all the answers

What role did local management play in the German subsidiary of the Norton Company during the war?

They protected the company's interests despite wartime hostilities. Signup and view all the answers

What action did IBM's Thomas J. Watson take during Nazi rule?

He developed a close relationship with Nazi leaders. Signup and view all the answers

What type of company managed the land awarded to Lever Brothers in the Belgian Congo?

A Belgian-registered subsidiary Signup and view all the answers

Which company partnered with Germany to continue operations during the early 1930s despite being American?

Norton Company Signup and view all the answers

Which countries maintained greater autonomy in dealing with foreign companies due to their status outside Western imperial control?

China, Thailand, and Iran Signup and view all the answers

What was a frequent theme in Nazi propaganda, as exemplified by the 1943 poster created by Hans Schweitzer?

Accusations against Jews for instigating the war. Signup and view all the answers

What characterized the management strategy of foreign firms under Nazi rule?

Adaptation to local regulations while maintaining some autonomy. Signup and view all the answers

What was a primary reason for the lack of maneuvering room for countries looking to interact with foreign firms?

The weakness of state structures Signup and view all the answers

How did the seizure of enemy businesses during World War II typically occur?

Under governmental control with no compensation given. Signup and view all the answers

What economic belief was widespread in Latin America during the late 19th century?

Promotion of liberal economic policies and free trade Signup and view all the answers

What happened to the British banks in Argentina during the Baring Crisis of 1890?

They suffered significant collapses Signup and view all the answers

What significant action did Iran take regarding the Anglo-Persian Oil Company's concession in 1932?

They canceled and renegotiated the concession Signup and view all the answers

In what year did YPF coexist with foreign companies in Argentina?

1907 Signup and view all the answers

What was reserved for YPF in Argentina during the mid-1930s?

The best areas for petroleum deposits Signup and view all the answers

What action did the French government take in response to a foreign takeover bid by GE in 1965?

Ban all foreign takeovers of French firms. Signup and view all the answers

What was a notable consequence of the French government's strict investment screening?

Lengthy delays in the approval of foreign investments. Signup and view all the answers

Which industry saw the promotion of national champions in both France and the UK?

Ball bearings. Signup and view all the answers

What was a significant outcome for ICL, the British computer firm?

It depended on Fujitsu technology during the 1980s. Signup and view all the answers

How did EU membership affect French government policies towards foreign investments?

It allowed foreign investors to bypass French restrictions by establishing plants elsewhere. Signup and view all the answers

What was a common strategy of the UK government to handle foreign investments during the Labour government from 1964 to 1970?

Request assurances on employment and investment strategies. Signup and view all the answers

What was the primary reason for the promotion of national champions in both France and the UK?

To establish local firms as competitive players globally. Signup and view all the answers

What ultimate fate did ICL face in 1990?

It was acquired by Fujitsu. Signup and view all the answers

What has been a common characteristic of large economies in terms of their policies towards foreign firms?

They often adopt restrictive policies. Signup and view all the answers

Which factor is linked to a country's tendency to adopt restrictive policies on foreign direct investment (FDI)?

Having low outward FDI. Signup and view all the answers

How do countries with liberal economic policies generally approach foreign businesses?

They do not seek to restrict foreign businesses. Signup and view all the answers

In what way do the policies towards foreign firms reflect a country's policy background?

They mirror the wider industrial policy background of the country. Signup and view all the answers

What tends to happen if restrictive policies are pursued against foreign firms by a country with high multinational investment?

It leads to retaliation against their own companies. Signup and view all the answers

How does the nationality of the investing firm affect a country's policies towards foreign firms?

It has an influence shaped by cultural and historical factors. Signup and view all the answers

Which governments are more likely to regulate foreign companies within their jurisdictions?

Those with active industrial policies. Signup and view all the answers

What is a typical response of countries with low outward FDI concerning policy towards foreign firms?

They frequently implement restrictive stances. Signup and view all the answers

What was a significant outcome of the transformation of GATT into the WTO in 1995?

Strengthening of dispute settlement mechanisms Signup and view all the answers

What does the TRIPs agreement primarily concern?

Protection of intellectual property rights and services Signup and view all the answers

Which of the following obligations is NOT included under the GATS?

Subsidizing local industries Signup and view all the answers

What was one of the main criticisms of the WTO highlighted by the anti-globalization movement?

The lack of transparency in governance structure Signup and view all the answers

Under WTO regulations, how are developed countries primarily characterized?

As having a dominant influence in decision making Signup and view all the answers

Which of the following aspects is emphasized by the WTO's rules on protection standards?

Uniform application across all member countries Signup and view all the answers

What characterized the public protests at the WTO meetings, especially in Seattle in 1999?

Opposition to perceived injustices of globalization Signup and view all the answers

What does the WTO require member governments to establish regarding protection standards?

Transparent processes for enforcement Signup and view all the answers

Study Notes

Chapter 8: Public Policy

Public policy encompasses the relationship between businesses (multinationals) and governments.
The relationship is complex because the borders of multinational firms and nation-states aren't identical.
Governments face economic entities with ultimate control outside their borders.
Multinational firms face multiple jurisdictions with varying political systems.
Jurisdictional asymmetry is central to the tensions between multinationals and governments.

8.1 Multinational and Government

The relationship between firms and governments has been a driving force throughout multinational history.
Differences in borders between companies and nation-states creates conflicting situations.
Ownership and control of firms frequently lie beyond national borders of the governing entity.
Firms face multiple jurisdictions rooted in differing political systems.

8.2 Governments as Hosts

8.2.1 Developed Economies

During the 18th and 19th centuries, European nation-states (such as the US), grew in their ability to regulate, tax, and monitor local firms.
National ownership of firms wasn't a primary concern for policymakers during the 19th century.
Few barriers to entry existed for foreign firms during this period.
Limited restrictions existed on how foreign firms operated, and official discrimination against foreign firms was infrequent.
The second half of the 19th century witnessed major policy divergence.
The United States employed high levels of protectionism but allowed unrestricted entry and operation for most foreign firms (except banking).

8.2.2 Developing Economies

In the pre-WWI era, there weren't many restrictions on multinationals in developing countries.
Colonial governments often followed policies similar to those in their home countries.
Examples of less restriction in developing countries include India and other parts of the British Empire where firms like Standard Oil and Swedish Match operated, as well as in the Belgian Congo where Lever Brothers operated.
Several countries in the Middle East and Latin America showed a shift after the 1920's with more restrictive policies towards foreign oil companies.
The 20th century saw increasing nationalization in several countries, with nationalization of the oil industry in several Middle Eastern and Latin American countries as a key example.
This trend intensified during and after WWII with the rise of Communist regimes and the end of Colonialism, leading to the withdrawal of privileges for foreign-owned firms in many parts of the world.

Interwar, European and Foreign Multinationals

Foreign ownership of companies during the interwar years increased as a topic, resulting in several EU countries creating their own national oil companies.
Less stringent policies against foreign firms existed in Britain and other parts of Europe.

German and Foreign Multinational

Foreign influence in German business was discussed, but not strongly regulated, allowing GM and GE to acquire stakes in industry leading firms.
This continued even under Nazi policies, but with the expectation that foreign firms followed existing German policies on employment.

United States and Multinationals

The Untied States saw the sharpest shift towards restricting foreign firms after seeing a shift from being a major debtor to a major creditor nation during WWI.

War World II and Afterwards

The end of World War II saw the restoration of Democratic governments, which led to shifting national policies.
Developing countries that remained outside of Western control had more autonomy in dealing with foreign firms.
In many parts of the world after WWII, there were increasing limitations on foreign ownership in utilities in industries like electricity, and many other industries.

European Market

After WWI, some European countries followed the British example of creating national oil companies
After WWII, there was often increased involvement from the local government in businesses of all types.
Increased regulation and control over foreign companies after WWII in a wide variety of European countries.

War World II and Afterwards - Liberalization

The 1980's saw global public policy shift away from monitoring and restricting foreign firms towards a more liberal approach that favored globalization and the removal of barriers to FDI.
National governments were becoming more less intrusive in business, with most actively encouraging foreign investment.
The role of regional government jurisdictions expanded.

War World I and Afterwards - Liberalization

The 1980's saw global public policy shift away from monitoring and restricting foreign firms towards a more liberal approach that favored globalization and the removal of barriers to FDI.
National governments were becoming more less intrusive in business, with most actively encouraging foreign investment.
The role of regional government jurisdictions expanded.

Multilateral Regulation

The expropriation of foreign property stimulated the first attempts to create international codes for host countries.
The Hague Conference sought to include the topic of responsibility for damage caused to foreign persons and property.
Many developing countries rejected the proposed international treatment standards.

International Trade Organisation (ITO)

During and after WWII, proposals for an International Trade Organization arose.
The ITO was a third leg to manage the international economy and along with the World Bank and the IMF.
The ITO didn't go into effect, but the GATT survived from the ITO proposals as a body that guided successive multilateral trade deals, driving international trade liberalization.

Organisation for Economic Cooperation and Development (OECD)

In the 1970's, the wave of nationalization of multinationals prompted the OECD to create guidelines for international firm behavior to promote corporate governance, training of employees, avoiding local political corruption, and other matters.

Multilateral Regulation (Others)

The World Trade Organisation (WTO) substantially strengthened dispute settlement mechanisms, significantly influenced by developed countries.
The WTO's governance structure is not transparent, a point that became a significant focus of anti-globalization movements.

Developing Economies

Colonial governments generally didn't restrict foreign investment.
In the 1930s there was a noticeable reaction to restrictions on foreign oil companies, primarily coming from countries in the Middle East and Latin America.
After 1935, labor laws started being used as a tool to restrict foreign companies.
In the 1930s many countries in Latin America began expropriating firms like Jersey Standard.

Studying That Suits You

Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

Description

This quiz explores the key actions taken by Colonel Nasser in relation to the Suez Canal Company, including his nationalization efforts in 1956. It also examines the international reactions that followed, the effects on neighboring countries, and Nasser's rise to the presidency. Test your knowledge of this pivotal moment in Egyptian history.