Introduction The Dung Quat Oil Refinery is a growing oil plant in Vietnam and continues to produce substantial amounts of oil for both domestic use and international exports. The main concept that is used with this company is to export processed oil, as opposed to crude oil. For the economy and for the company, this is providing more opportunities to build the economy and for demand of specific resources. However, to continue to export oil at an international level, there need to be different concepts that are applied to the company.
This will provide more opportunities for expansion and will allow the Dung Quat Oil Refinery to provide an established reputation as a leading oil supplier of the Vietnam economy. Problems with Exporting Oil Even though Dung Quat Oil Refinery is able to provide exports to several developed countries, there are still several issues that pertain to exports. The first is based on the procedures and documents that are a part of exporting. The political economy in each country requires different provisions for quality oil and other products.
For oil to be exported from Vietnam and into other countries, provisions are required to ensure that the materials meet specific standards for that country. While most political systems are at a sense of agreement with the exporting of oil as well as the concepts that are applied to this, there are still some issues that are developing in relation to the legalities of exports as well as the expectation of quality that is sent into each country (Haggard, Maxfield, 35). Another specific problem that is related to the oil exportation that is occurring is based on the financial concerns, including both shipment and financial procedures.
Price shifts are one of the expectations of the oil refineries, specifically which relate to the demands of developed countries. The prices are affected by the social and cultural needs, economic downturns and trends that are within each country. More importantly, there is not a regulation with the international monetary system, specifically with areas such as Vietnam and the Philippines. The framework for exporting and importing goods then fluctuates even more than on a national basis.
For oil companies, the ability to control the levels of finances, as well as the shipment needs may fluctuate severely, which will affect the economy on several levels. More importantly, the economic activity for exports fluctuates because of national monetary systems, which creates a gap in the amount made and spent for the oil exports (Dooley et al, 297). Outcomes of Problems The problems that arise from finances and with the documents and procedures are one that leads to a gap in business as well as complications with international relations.
The gap includes misunderstandings with the procedures that should be implemented as well as which documents should be provided for a completion of the exports. This leads to misunderstandings of how the oil should arrive as well as the condition and quality that is provided. Even though there is an advantage by the oil company to provide processed oil, as opposed to crude oil, there is the inability to define what this means.
If the documentation and communication is not provided, then it could cause bad establishments with international relations. More importantly, there are misunderstandings of the amount to be paid, shipment procedures and expectations of what is received in return for the payments. With economic fluctuations, this could lead to complications with controlling the finances while establishing a sense of stability among consumers. Solving Problems for Oil Exportation The gap that is a part of exports is one that includes political policies, social demands, procedures and financial fluctuations within the economy.
For the business, as well as for the international economy, this can lead to several specific problems that can hurt the Dung Quat Oil Refinery over a period of time. The only way to overcome these specific problems is to change the gap that is occurring at an international level. Building new relationships and ties to countries, developing established procedures and policies and providing documents that are conducive to each country at an international level can help to enhance levels of communication.
This can be combined with agreements of standards that are a part of exporting the oil that are set by the business. Dung Quat Oil Refinery can define what the standards for distribution and acceptance are, while allowing companies in other countries to accept the quality or to redefine what is needed. By using the levels of communication and relationship building, Dung Quat Oil Refinery can close the gap of procedures and expectations at an international level before shipping the oil (Spero, Hart, 17). Other alternatives include those who are working toward international agendas that standardize the trade at a different basis.
Multilateral trade negotiations, for instance, are designed to standardize the exportation of different goods and the expectations with goods. More importantly, it is being developed to create financial flow that is justified in different countries and among the company. To alter this, politicians and those involved in economics are working toward international monetary systems to differentiate with exports and trade agreements. However, until different policies are initiated, companies have to reach international competition by keeping standardized prices that match at an international level while retrieving specific needs for the economy.
When there are fluctuations, this standardization will create stability among corporations (Mattoo, Subramanian, 15). Conclusion The success of Dung Quat Oil Refinery is one that is growing at an international level. However, for this to continue to propel forward is also the need to understand how to work with exports at an international level. The refinery is currently in a position where there is an expansion of the oil because it is processed.
To continue to grow, there is the need to have high levels of communication, relationship building and established procedures for both shipment and financial agreements. Since the trade agreements are not conducive at an international level, this will provide the refinery with different alternatives for stability and continuous growth. Bibliography Dooley, Michael, David Folkerts – Landau, Peter Garber. “Defining the International Monetary System. ” Pacific Economic Review (14), (3), 2009. Retrieved from: http: //onlinelibrary. wiley. com/doi/10.1111/j. 1468-0106.2009.00453.x/abstract. Haggard, Stephen, Sylvia Maxfield. “The Political Economy of Financial Internationalization in the Developing World. ” International Organization (50), 2009. Retrieved from: http: //journals. cambridge. org/action/displayJournal? jid=INO Mattoo, Aaditya, Arvind Subramanian.
“From Doha to the Next Bretton Woods. ” Foreign Affairs (15), 2009). Retrieved from: http: //heinonline. org/HOL/LandingPage? collection=journals&handle=hein. journals/fora88&div=5&id=&page= Spero, Joan, Jeffrey Hart. The Politics of International Economic Relations. Boston: Wadsworth Cengage Learning, 2010. Retrieved from: http: //books. google. co. in/books? hl=en&lr=&id=tifacOtJpwAC&oi=fnd&pg=PR15&dq=Spero, +Joan, +Jeffrey+Hart. ++The+Politics+of+International+Economic+Relations. ++Boston: +Wadsworth+Cengage+Learning, +2010.++&ots=CSujjX_p5O&sig=nQrbrXgAievLqEYGHe9bghOOcRw#v=onepage&q=Spero%2C%20Joan%2C%20Jeffrey%20Hart. %20%20The%20Politics%20of%20International%20Economic%20Relations. %20%20Boston%3A%20Wadsworth%20Cengage%20Learning%2C%202010.&f=false.