The first video shows real life examples of political risks of international businesses. In this video, Venezuela’s President Hugo Chavez seizes control of several foreign-owned companies. Chavez follows a policy called nationalization. Chavez’s policy relates to our classwork. In our class we have learned that nationalism is the feeling of unity and national pride. Nationalism can be manifested by many factors. Such as, war, disaster and recession. President Chavez has seized companies because he believes that his own country and it’s citizens are suffering. Like said in our class, radical shifts in government can happen and companies must acknowledge the risks of doing international business. The political reasons why governments can be unstable checks all in Venezuela.
In Venezuela, there has been changes in political parties which conclude to trade regulation changes. Nationalism has also occurred in Venezuela by President Chavez. In the video, we can also relate all the political risks we learned from the powerpoint, The companies seized by Chavez is facing all of the risks. Some face, confiscation which is the most severe one. Some companies are facing expropriation and domestication There are also economic risks to international firms such as government restraints (tax controls, local content laws, labor problems, exchange controls etc) In a nutshell, many companies face the same risks as Cargill, Empresas Polarr Companies must take political and social risks in consideration before expanding to foreign countries. The second video explains trade and economic interdependence Globalization can be seen often nowadays because multinational corporations have power and a global reach.
On the other hand, shipping and travel has become very safe, easy and most importantly cheapr Many governments also reduced international trade regulations. Nowadays, production takes place in lower-wage countries because of these factors. Another important part of the video was “With great success that governmental regulation diminishes prosperity by limiting growth”, Many poor countries like Africa, are dominated by larger economies/countries(like America) are dumping their international regulations and they are privatizing state-run businesses. The reason behind this action is to get low-interest loans from the International Monetary Fund. In the old days, companies used to produce for domestic consumption, now, they are manufacturing for foreign markets.
The video host also mentions that global capitalism has pros and cons. Some pros of global capitalism are, a decrease in poverty and an increase in worldwide economic output. On the other hand, some side effects of global capitalism can include, cruelty in the work environment (employees) and the destruction of the environment. The host also explains the reasons why migration has grown this much. Technology now offers many selections to keep in touch with family members abroad. Another factor is that air travel has become cheap and let’s not forget the economic opportunities rich countries offer. To sum up, the speaker addresses the reason of history in our life. By knowing our history, we can analyze what we gained and lost.
