Considering United Arab Emirates and Venezuela as an attractive opportunity for investment, we can compare and contrast the risks and opportunities presented by both countries. On this basis, we will try to suggest where to invest and why.
Table of contents
1. Historical and political context in both countries 3
1.1 Venezuela 3
1.2 United Arab Emirates 42. Economic situation in both countries 5
2.1 Economic systems 5
2.2 Economic data 6
3. Local opportunities and risks to invest 7
About Foreign Direct Investments and international trade 11
About United Arab Emirates 11
About Venezuela and South America 12
The globalization phenomenon, developing internationaltrade, has started during the second part of the XIXth century. Nowadays, globalization is a worldwide process which affects all the world economy. Under globalization, international trade, foreign direct investments, capital movements, people movements increase on a large scale. In that context, every company has to deal with a global network production, marketing, and information management.
Iam a consultant from a French company which would like to expand its presence over the world in order to be more competitive on this global market place. The company is willing to invest in any sector of the industry. Venezuela and United Arab Emirates are considered as attractive countries for foreign investment. As a business management consultant, I will study and analyze the opportunities andrisks that exist in both countries for foreign investors in order to choose the more attractive.
The attractiveness of a potential investment country can be assessed examining and balancing the political and economical context. This could be achieved analysing the different local factors (political, economic and legal) which determine costs and benefits of doing business as well as the risksin business environment in those countries.
In this report, historical-political situation and economical situation in both countries are presented and commented. Then, the third part balances advantages and disadvantages of doing business regarding risk and opportunities which coexist.
Historical and political context in both countries
Before choosing to invest in a country, it isimportant to understand the policy which applies. Indeed, the policy led by the local government determines the legal environment in which any enterprise (foreign or not) has to deal with doing business.
The Venezuela’s history is extremely colourful. The country (with other South America’s areas) was a Spanish colony from 1560’s to 1810’s. From the independence, Venezuela hasencountered a series of wars, revolutions, counter revolutions, takeovers, totalitarian governments, etc. The first democracy was established after the WWII but did not stop the politic instability. Currently, Venezuela is the Bolivarian Republic of Venezuela. Hugo Chavez, the current president, was elected in 1998. Since his election, he has changed the constitution giving him more power. Atpresent, the president is elected for six years renewable, he runs both government and State. He nominates himself the vice president and chooses his ministers. Nowadays, although he is supported by Cuba, Brazil and Argentina, Hugo Chavez is fairly badly regarded over the world. For example, he has engaged directives against corruption but Venezuela has never known a higher corruption since he has gotthe power. On another hand, despite huge profits from oil business and the Chavez’s engagement to increase the standards of living, the Venezuela’s population is still the poorest of South America. 74 % of the Venezuelans live under the poverty level. However, the government currently invests more in the health sector and school infrastructures to tackle illiteracy.
For years, Venezuela lived...
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