International business

TOPIC: A THOROUGH STUDY OF CULTURAL,POLITICAL AND

ECONOMIC CONDITIONS OF ITALY, THAILAND & UGANDA

PRESENTED BY: ANUM FATIMA

ANAM SHUJAATJINNAH UNIVERSITY FOR

WOMEN

We have tried to answer the question:

“Is cultural, political and economic conditions have an impact on INTERNATIONAL BUSINESS?”

ITALYDEVELOPED COUNTRY

CULTURE OF ITALY

• 1."Italians don't live to work, but work to live."• 2. "Purple colour, a sign of bad luck."• 3. "Wine, a major part of meal."• 4. "Unstructured family."• 5. " Ingredients found in their particular region

are preferred by people."• 6. "First impression is the last impression."

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1."Italians don't work to live, but live to work.“

2. "Purple colour, a sign of bad luck.“

3. "Wine, a major part of meal.“

4. "Unstructured family.“

5 "First impression is the last impression."

ECONOMIC CONDITIONS OF ITALY

ERA OF 2007-2010

•Italy was hit hard by the economic crisis of 2007-2010.

•Loss its European competitors.

•Financial aid was badly required.

•Unemployment level reached its peak.

IMPACT ON INTERNATIONAL BUSINESS

•No international firm wanted to invest in the country

•No inflows or outflows of currency

•No variety of goods for consumers

ERA OF 2011

•Government adopted certain measures to deal with the economic crisis of 2007-2010.

•In order to recover deficit Italian government struggled to limit government spending in order to take the country to prosperity.

•To increase GDP, encouraged Domestic firms.

ERA OF 2012-2013 "A SUCCESSFUL PERIOD"

•Become 4th largest in EUROPE.• •Become 9th largest economy in the WORLD.

•Become 5th largest GDP in terms of Purchasing parity(PPP).

IMPACT ON INTERNATIONAL BUSINESS

Government change its policy from Interventionism to Free-Trade so that all countries can do freely trade with them.

POLITICAL CONDITION OF ITALY

The Italian state is centralized. The prefect of each of the provinces is appointed by and answerable to the Central Government.

ERA OF SILVIO BERLUSCONI 2006-11

•In 2006, presidential elections were held and Silvio Berlusconi became the Prime Minister of Italy and assumed certain powers and authority.

•Italy's political situation recently gain widespread attention in the midst of the sovereign debt crisis.

CONT....

Berlusconi's government increasingly showed sign of instability, affecting the confidence of financial markets and European leaders.

IMPACT ON INTERNATIONAL BUSINESS

In the period of Silvio Berlusconi, the policy of interventionism was imposed by the government so, no international business was being held in Italy and as a result there was no trading of Foreign Reserves in the country.

ERA OF MARIO MONTI (2011- PRESENT)

•After former Prime Minister Silvio Berlusconi was forced to resign in Nov, 2011, former EU-Commissioner Mario Monti took the office with a technocratic government (i.e., due to the political crisis this government is formed), backed by board political and popular support•He set out a broad reform agenda with a objective to address the country's trouble public finances and structural problems of the economy.

IMPACT ON INTERNATIONAL BUSINESS

At the end of Jan 2012, the government adopted a series of measures opening up some highly protected service sectors. Although the measures will take some years to display their effects, Mr. Monti's hope was to restore international investor's confidence by meeting objectives which had long been pointed out by European union institutions and several international organizations.

THAILANDDEVELOPING COUNTRY

CULTURE OF

THAILAND

1."Structured family system.“

2. " Black color, a sign of bad luck.“

3. " Time is precious.“

4. " Dressing should be proper.“

5. " Donot take decision in one meeting."

ECONOMIC CONDITIONS OF THAILAND

Thailand has made great progress in social and economic issues. As such, Thailand has been one of the great development success stories with sustained strong growth and impressive poverty reduction.

GLOBAL ECONOMIC CRISIS

•Thailand has faced global economic crisis at around 5% during 2002-07.

•In 2008, Thailand's economy slightly boomed, investments were made and economic conditions were stable.

•But with the start of 2009, Thailand's economic growth slowed because of global economic condition.

FLOODS AND RECESSION PERIOD

•In 2011 because of devastating floods the economy faced a big recession period.

IMPACT OF FLOODS ON INTERNATIONAL BUSINESS

•Many investors shutdown their businesses.•Export became low and many financial aids were required .

•WORLD BANK and IMF provided financial aids to Thailand to recover these losses.

•Life style of people became low.•Domestic businesses were destroyed.

So, we can say that 2011 was the worst year for Thailand's economy.

ERA OF 2012

•The Thai economy expanded well in 2012 due to private domestic demand.

•As the domestic demands increased, the domestic businesses were encouraged as a result of which employment level increased, per capita income increased, inflation rate decreased as compare to 2011.

IMPACT ON INTERNATIONAL BUSINESS

•International business managers started investing their money in Thailand.

•Many international companies licensed and franchised companies of Thailand. Example: KFC licensed YUM company for using their logo and make products of KFC with its "proven formula" and in return KFC was given royalty by YUM company.

2013 “A SUCCESSFUL PERIOD FOR THAIAND”•In 2013, Thailand was highly ranked in

International practices.

•UNCTAD listed Thailand as the 10th most attractive destination of foreign direct investment. •Thailand allowed free-trade to international countries with no restrictions on foreign currency, no export requirement, no local content requirements in manufacturing and 100% foreign ownership. •Thailand offered many incentive schemes to international businesses such as no-tax incentives, permission to own land etc.

In short, 2013 was the successful period for Thailand as it enjoyed many international businesses, economy was boomed, economies of scale was achieved, competitive advantage was earned and people's life style improved due to international business.

CONCLUDING POINTS

POLITICAL CONDITIONS OF THAILAND

ERA OF THAKSIN SHINAWATRA(THAI PARTY)•Prime Minister Thaksin Shinawatra was over thrown in a military coup in September 2006. While he was out of the country his Thai Rack, Thai party was banned but in December 2007 the party was re-entered in the elections, the People Power Party won the most votes in general election 2007.

•Thaksin was charged with corruption in August 2008, and fled the country for London. Later he was sentenced to two years in jail in his absence. Year 2008 saw three prime ministers bore protest..

•In 2010, the pro-Thaksin Pheu Thai party won a landslide victory in elections the following year and Thaksin's sister, Yingluck became Prime Minister.

CONT…

IMPACT ON INTERNATIONAL BUSINESS

•The government of Yingluck Thaksin allowed free trade to international business.

•Many international organizations expanded their business in Thailand

EMERGENCY LAW WAS IMPOSED

(2013)•Due to bad political conditions in 2013,emergency law was imposed by the government for their safety.

•Due to political instability social unrest situation occurred in Thailand with protest against whoever has been in power

UGANDA UNDER-DEVELOPED COUNTRY

CULTURE OF UGANDA

1. "Corn flour, the main ingredient.“

2. " Mangoes and pineapple lovers.“

3. "Not overly concerned with being punctual.“

4."Dress is highly valued."

ECONOMIC CONDITIONS OF UGANDA

•The economy of Uganda has great potential, and it appeared poised for rapid economic growth and development .•Uganda is doing well in the fight against poverty•The country has already achieved the millennium development goal target of having the incident of extreme poverty.

ERA OF 2008

In 2008, the Uganda’s economy was hit hard by the global economic turndown, given its continuing dependence on coffee exports and pushed up food prices.

ERA OF 2009

•In 2009, the economy of Uganda slightly started to grow as average rate of people living in poverty declined to 24.5%

•The effect of this decline be ascribed to the energy crisis, the increasing oil prices, infrastructural bottleneck disappointing harvest due to draught and to difficulties in the European and US economics which secure as important market for Uganda’s exports.

ERA OF 2012

In the financial year 2012, Uganda’s economy again slowdown. The inflation rate rose up to 23.5% and it was the highest inflation rate till date. The initial drivers of the inflation were high food and fuel prices.

ERA OF 2013

•In 2013, the government has taken important steps towards economic rehabilitation. The country’s infrastructure notably its transport and communication systems which were destroyed by war and neglected were being rebuilt.

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•Recognizing the need for increased external support, Uganda negotiate a policy framework paper with IMF and the World bank in 2013.

POLITICAL CONDITIONS OF UGANDA

Uganda is a strong supporter in the global war against terrorism. Since 1986, Uganda has made progress in restoring peace security and the rule of law.

ERA OF 1970s

•In 1970, the relations between Uganda and U.S were strained. After 9 years in 1979, relations improved between U.S and Uganda, the U.S reopened its embassy in Kampala.

ERA OF YOWERI MUSEVENI(MULTI PARTY)

•The relations between U.S and Uganda became good as Museveni assumed power and the U.S welcomed his efforts to end human rights abuses and to peruse economic reform. Mr. Museveni introduced a "Democratic System" in Uganda in 1998. •The global economic turndown of 2008, hit Uganda hard. This galvanized the position which disputed Mr. Museveni's victory in 2011 presidential election and went to, to organize street protest about the cost of living and political freedoms.

ERA OF MULTI PARTY POLITICS

•Following a referendum in 2005, the same work for multi-party politics was re-introduced after 20 years of the movement system (MS). The 2006 presidential and parliamentary elections marked the beginning of the return to the multi-party system. After a long time,2006 election create a peaceful environment in Uganda. The government permitted the media to exercise its functions without undue its restrictions.

RELATIONS WITH INTERNATIONAL COUNTRIES

Relations with Rwanda, Congo and Sudan have sometimes being strained because of security concerns. In the government of Museveni international trade was encouraged and many countries like U.S, Sudan, Somalia etc started doing international business with Uganda. U.S is helping Uganda in exporting of many products. Uganda is a big exporter of coffee and is exporting coffee to U.S. U.S is also providing financial aid to Uganda for poverty reduction

CONCLUSION