Free Essay

Country Risk Analysis Venezuela

In: Business and Management

Submitted By mcbranger
Words 2111
Pages 9
Exercise country analysis and country risk Venezuela Hypump, a US company producing hydraulic pumps used in oil producing industry, likes to investigate the possibility of starting a new subsidiary in Venezuela, and asked you to make a country analysis and country risk report. The facts, key indicators and back ground information of Venezuela you found after research are presented in the Appendix. Use that information to answer the following questions: Moderate poverty and inequality have decreased from 1998 onwards due to the program called ‘Missiones’ according to the World bank (see appendix). 1. Use the fact sheet Venezuela whether this can be confirmed with figures. Assess: a. Level of development b. Income inequality 2. Assess Venezuela’s export structure. What is it based on? Use GDP and expenditure components for Q 3 and Q4 to assess Venezuela’s attractiveness from the table: 3. How can you see 2014 and 2015 are forecasts? 4. Characterize the phase of business cycle Venezuela has faced in 2013 and 2014 (Explain which key indicator(s) are used to answer the question) 5. Make a ‘first level analysis’ of the aggregate components of GDP to explain the economic (GDP) growth during 2013. 6. Explain the influence of imports on GDP in 2013. 7. Make a ‘second level’ analysis of the aggregate components of GDP to find some reason(s) for the movement of the various components. ‘The decrease in revenues from exports, mainly oil is consistent with lower oil production’ According to an internal government report, international reserves even plummet 33% in a year. 8. Which external position indicator has directly been influenced by the decrease in revenues of oil exports? 9. Explain whether the development this indicator shows, affects the transfer risk for the pump company and if so how. 10. The score on ease of doing business index is very low. Explain what could have caused this low number. 11. Does the pump company face a nationalization risk? Explain. The Economist Intelligence Unit (EIU) defines several risks a company can meet doing business abroad. The next different risks are defined as: a) Sovereign risk: risk of default on public, domestic and external debt b) Currency risk: risk of a maxi devaluation c) Banking risk: risk of a systematic banking crisis d) Political risk: credit risk posed by the political system e) Economic structure risk: risk posed by structural economic indicators Assess Venezuela on the following risks: 12. Sovereign risk 13. Currency risk 14. Political risk 15. Economic structure risk. 16. Jot down your overall advise to the pump company Hypump to start a subsidiary in Venezuela. Explain with facts what your decision is based on.

Appendix Venezuela Facts Venezuela

Major exports 2012 | % of total | Major imports 2012 | % of total | Oil & gas | 96.4 | Intermediate goods | 56.7 | Other | 3.6 | Capital goods | 26.3 | | | Consumer goods | 17.1 | Leading markets 2012 | % of total | Leading suppliers 2012 | % of total | US | 36.7 | US | 44.6 | China | 13.5 | China | 23.6 | India | 11.3 | Brazil | 12.8 | Netherlands Antilles | 7.3 | Colombia | 6.8 | Key Indicators Venezuela | 2012 | 2013 | 2014p | 2015p | | Year | 1 Qtr | 2 Qtr | 3 Qtr | 4 Qtr | Year | Year | Year | GDP | 5.6 | 0.8 | 2.6 | 1.1 | 1.0 | 1.3 | -1 | -1 | Government consumption | 6.3 | 4.1 | 2.9 | 2.8 | 3.6 | 3.3 | 3 | 4,2 | Private consumption | 7.0 | 3.3 | 5.3 | 4.3 | 5.8 | 4.7 | -1,4 | 1,8 | Fixed capital investment | 23.3 | 4.3 | -5.5 | -12.1 | -16.6 | -9.0 | -4 | 1 | Exports of goods & services | 2.1 | 7.5 | 1.6 | -8.4 | 0.3 | -9.9 | -2,1 | 2,2 | Imports of goods & services | 24.4 | 2.3 | -3.3 | -13.8 | -20.3 | -9.7 | 1,5 | 2,9 | Inflation | | | | | | 41 | 65 | 43 | Govt balance (%) | | | | | | -10,5 | -12 | -10 | Government Debt (%) | | | | | | 54 | 53 | 52 | Current account to GDP ratio | 2,5 | | | | | 1,7 | 2,1 | 2,2 | Debt service ratio | 6 | | | | | 5,4 | | | Total reserves (% of external debt) | 41 | | | | | | | | Import cover | 4 | | | | | 3 | | | Foreign exchange reserves ($) | 28424 | 29888 | 26850 | 26500 | 23000 | | 20969(April) | | | | | | | | | | | Source: GDP and expenditure components: Banco Central de Venezuela; and ABN Amro (update 17 april 2014); World Bank. | Structure of the external public debt: 65% of total amortisations on external debt fall due after 2019. The amortisation profile of domestic debt (50% of total debt) is shorter term, but immediate rollover needs are manageable
Venezuela at a glance
A country rich in natural resources, with the largest oil reserves in Latin America and the Caribbean – and among the world’s largest— Venezuela has immense potential. Export revenues fund huge social programmes; shortages and high inflation have hit some consumers
Politics: President Hugo Chavez died in March 2013. He led a self-styled socialist revolution but polarised domestic opinion. Following the death of President Hugo Chávez and the calling of new elections, Nicolás Maduro became the new president of Venezuela in April 2013.
(Economic) Policy issues: Political radicalisation has been reflected in increasingly heterodox economic policymaking in recent years, including an acceleration in the nationalisation of industries deemed “strategically important”. However, distortions created by state interventionism (controls on foreign exchange, prices, margins imports and credit) have become increasingly evident, with the economy growing well below potential and inflation remaining high in spite of price limits imposed on a number of consumer and durable goods, reflecting import restrictions and weakening productivity.
The fixed exchange rate is sharply overvalued and capital controls have generated a rampant black market. Failure to invest part of the oil boom has led to a startling decline in the country’s physical infrastructure, resulting in recurrent electricity shortages.
Fiscal and monetary policy is extremely expansionary: Central bank prints additional banknotes to to meet the needs of the government that injects money into the economy through payments to contractors and welfare programs, thus boosting demand.

Among the most important programs that oil resources have helped to finance are the broad-based social programs called Misiones. Economic growth and the redistribution of resources associated with these missions have led to an important decline in moderate poverty, from 50% in 1998 to approximately 30% in 2012. Likewise, inequality has decreased strong from 1998 onwards, and is nowadays among the lowest in the region. Source: and World bank (last updated: April 24th)

Venezuela in the news:
Venezuela sees a pragmatic revolution By Andres Schipani in Bogotá, April 21st,
After a year in office, Nicolás Maduro has made little headway in correcting the economic distortions bequeathed by his Comandante. Recent social unrest highlights the weak mandate of the new president.
Since Hugo Chávez died in March last year, Venezuelans have suffered rapidly deteriorating economic conditions, from a yawning budget deficit to galloping inflation and widespread shortages of goods, from milk to toilet paper. But the people have pushed back. As Mr Maduro’s approval ratings have fallen, there are signs that the socialist government is taking orthodox steps to ease the country’s severe macroeconomic imbalances. Recent rallies in Venezuelan debt have pushed yields down.
Extra article (Economist, Sept. 2014)
Venezuela’s economy
Of oil and coconut water
Probably the world’s worst-managed economy
Sep 20th 2014 | CARACAS | From the print edition

A BIG oil producer unable to pay its bills during a protracted oil-price boom is a rare beast. Thanks to colossal economic mismanagement, that is exactly what Venezuela, the world’s tenth-largest oil exporter, has become.
At the end of the second quarter Venezuela’s trade-related bills exceeded the $21 billion it currently holds in foreign assets (see chart), almost all of which is in gold or is hard to turn into cash. Over $7 billion in repayments on its financial debt come due in October. The government insists it has the means and the will to pay foreign bondholders. Few observers expect it to miss the deadline. Even so, the dreaded word “default” is being bandied about.

On September 16th Standard & Poor’s, a ratings agency, downgraded Venezuelan debt, assessing the country as “vulnerable and dependent on favourable business, financial and economic conditions to meet financial commitments”. Reports that the government is seeking to sell Citgo, an American refining subsidiary of Petróleos de Venezuela (PDVSA), the state oil firm, have fuelled talk of cash-flow problems.
Even if it stays current on its financial dues, Venezuela is behind on other bills. Earlier this month two Harvard-based Venezuelan economists, Ricardo Hausmann and Miguel Angel Santos, caused a stir by criticising the government’s decision to keep paying bondholders religiously while running up billions in arrears to suppliers of food, medicine and other vital supplies. “To default on 30m Venezuelans rather than on Wall Street”, they wrote for Project Syndicate, a website, “is a signal of [the government’s] moral bankruptcy.” President Nicolás Maduro branded Mr Hausmann a “financial hitman” and threatened him with prosecution.
Another Venezuelan economist, Francisco Rodríguez of Bank of America Merrill Lynch, thinks that scarcities of basic goods stem from the government’s refusal to adopt sensible exchange-rate policies. On the black market a dollar trades for over 90 bolívares; “official” dollars are worth between 6.3 and 50 bolívares, depending on which of the country’s multiple exchange rates you use. Exports of oil and its derivatives, which are dollar-denominated, account for 97% of Venezuela’s foreign earnings. Using an overvalued official rate means that the country is not making as much money as it could: the fiscal deficit reached 17.2% of GDP last year.
The government has been bridging that gap in part by printing bolívares. That has caused the money supply almost to quadruple in two years and led to the world’s highest inflation rate, of over 60% a year. Food prices, by the government’s reckoning, have nearly doubled in the past year, hitting the poor, its main constituency, hardest of all.
Even worse than inflation is scarcity. The central bank stopped publishing monthly scarcity figures earlier this year, but independent estimates suggest that more than a third of basic goods are missing from the shelves. According to Freddy Ceballos, president of the federation of pharmacies (Fefarven), six out of every ten medicines are unavailable. The list runs from basic painkillers, such as paracetamol, to treatments for cancer and HIV. One unexpected side-effect has been a sharp increase in demand for coconut water, which Venezuelans normally buy to mix with whisky. Nowadays it is sought out more for its supposed anti-viral and anti-bacterial properties.
Unable to obtain what they need through normal channels, people are having to improvise. Social media are packed with requests for urgently required medicines, while some highly sought-after goods—babies’ nappies, say—are offered in exchange for others, like spare parts for cars. Those lucky enough to have friends or relatives abroad arrange for emergency relief. “My cousin in Panama sends my mother’s Parkinson’s treatment,” says one Caracas resident. “It costs $30 a time there, compared with a few bolívares here, but here you can’t get it.” An opposition political party has even asked the Red Cross to help relieve the scarcity of medicines.
The mess is a reflection not just of import-dependence and a shortage of dollars, but also the mismanagement of domestic industry. Some food producers have been nationalised; price controls often leave manufacturers operating at a loss. Some price rises have recently been authorised, but manufacturers say it is impossible to maintain normal output with such stop-go policies. For its part, the government blames what it calls an “economic war” and the contraband trade. It has instituted a nightly closure of the border with Colombia, and plans to fingerprint shoppers to prevent “excessive” purchases.
The prospects for a change of course are gloomy. On September 2nd Mr Maduro replaced the vice-president for economic affairs, Rafael Ramírez, with an army general; Mr Ramírez also lost his job as chairman of PDVSA in the reshuffle, which saw him moved to the foreign ministry. Under Mr Ramírez, PDVSA has not thrived. Oil exports have fallen by over 40% since 1997 because of lack of investment, offsetting the benefit from price gains. Nonetheless, Mr Ramírez was seen as the only man in the cabinet arguing for exchange-rate unification, a cut in fuel subsidies and a curb on the burgeoning money supply.
Venezuela’s streets are calmer now than earlier this year, when clashes between opposition protesters and government forces left more than 40 people dead. The reshuffle appears to have strengthened Mr Maduro’s position. Bondholders may well keep getting paid. But the price of the revolution’s survival seems to be the slow death of Venezuela.

Similar Documents

Premium Essay

Country Analysis

...Country Analysis Venezuela Culture Venezuela's Uncertainty Avoidance (UAI) of 76 is slightly below other Latin Countries average of 80, indicating the society’s low level of tolerance for uncertainty (Geert Hostede). In an effort to minimize or reduce this level of uncertainty, strict rules, laws, policies, and regulations are adopted and implemented. The ultimate goal of this population is to control everything in order to eliminate or avoid the unexpected (Geert Hostede). As a result of this high UAI, the society does not readily accept change and is very risk adverse. Next, Venezuela has the highest Masculinity (MAS) ranking among the Latin Countries at 73 compared to 48. The high masculinity means the male dominates a significant portion of the society and power structure. Venezuela has a very low Individualism (IDV) ranking at 12, compared to other Latin countries averaged at 21 (Geert Hostede). The country is more collectivist which is manifested by long-term relationships, loyalty is very crucial in a collectivist society. Below are Hofstede’s charts so you can see the comparisons between Venezuela and other Latin American Countries. [pic] [pic] The Political Environment Venezuela’s structure of government is similar to the United States. Venezuela is a federal republic, with a president as the head of both the state and the government. This form of government has been in place since 1999 and Hugo Chavez has been the president since then. Under...

Words: 1108 - Pages: 5

Premium Essay

Venezuela Venezuela (Venezuela (Bolivarian Republic of)) GDP Per Capita (PPP), US Dollars Statistics Venezuela GDP per capita PPP ( The GDP per capita, adjusted by purchasing power parity, in Venezuela was last reported at 12233 US dollars in December of 2010, according to the World Bank. Previously, the GDP per capita PPP in Venezuela standed at 12513 US dollars in December of 2009. The GDP per capita PPP in Venezuela is obtained by dividing the country’s gross domestic product, adjusted by purchasing power parity, by the total population. Historically, from 1980 until 2010, Venezuela's average GDP per capita PPP was 8192.61 dollars reaching an historical high of 12899.71 dollars in December of 2008 and a record low of 5517.44 dollars in December of 1980. This page includes a chart with historical data for Venezuela's GDP per capita PPP. [pic] Venezuela GDP Growth Rate ( The Gross Domestic Product (GDP) in Venezuela contracted 0.00 percent in the third quarter of 2010 over the previous quarter. Historically, from 1997 until 2010, Venezuela's average quarterly GDP Growth was 0.69 percent reaching an historical high of 22.70 percent in June of 2003 and a record low of -15.30 percent in March of 2003. Venezuela is the fifth largest national economy in Latin America. Venezuela is......

Words: 1331 - Pages: 6

Premium Essay

Plastic Surgery

...purposes. Cosmetic surgery has become more accessible to a wider segment of the population worldwide and be accepted in many countries as a normal procedure. There are many people from different parts of the world that are obsessed to change their physical appearance. In the article “Mannequins Give Shape to a Venezuelan Fantasy” Meridith Kohut who writes for The New York Times, talks about a Venezuelan business man who owns a mannequin factory and he decides to reinvent the figurine’s shape in order to reflects the curvy body shape of the Venezuelan woman and increase his sales with the new mannequin created. Kohut shows on her article how obsessed Venezuelans have become for international beauty competitions and cosmetic surgery, she even points out their socialist’s government concern about the commercialism associated to those cosmetic procedures. I agree with the author that shows the increasing grow in popularity of cosmetic surgeries and treatments in Venezuela. However, there are so many countries besides Venezuela that are tangled with the same cosmetic obsession and the procedures by population are far superior in numbers than in Venezuela. In the article “A Cut Above” by The Economist Online; South Korea, Greece, Italy, Brazil and Colombia are the top five countries with more cosmetic procedures per 1,000 inhabitants by 2010 with US and Venezuela reaching 6th and 12th respectively. South Korea is the top on the list, one every five Korean women has received a...

Words: 1156 - Pages: 5

Premium Essay

Guri Dam

...The Guri Dam Case Study Analysis The Guri Dam, located on the Caroni River in Venezuela, was an idea born from the country’s necessity for economic development and reduce its dependency on its own oil rich reserves. The project was meant to aim Venezuela’s electric power generation from hydrocarbon to hydroelectric and reduce the country’s reliance on carbon based electricity, thus allowing the sale and exportation of more petroleum products. With the realization that Venezuela’s oil reserves were going to be a fundamental basis in the nation’s economic growth and stability, the Venezuelan government hired a consulting firm to develop the plan. From the start, the project had a well-defined scope, which potentially led to the project’s major success. Financed by the Venezuelan government and the World Bank, the 23 year project was completed on time and well within budget. Country leaders did an exceptional job during the planning and inception phase. Coporacion Venezolana de Guayana (CVG) was established in 1960 to study and develop the hydroelectric potential of the Caroni river. CVG outsourced the economic and technical studies of the river and the feasibility of building the Hydroelectric Central Guri (Guri Dam) to a North American Company. Eldeca, a company created in 1963 was given charge of the project and all subsequent operations of the dam. Eldeca’s management style and forethought proved to be a huge success during the course of the project. Eldeca......

Words: 834 - Pages: 4

Free Essay

Analysis of the Venezuelan Oil Market

...Running Head: VENEZUELAN OIL MARKET 1 Analysis of the Venezuelan Oil Market BINT 6311 – International Business Management University of the Incarnate Word VENEZUELAN OIL MARKET 2 Table of Contents Abstract ............................................................................................................................................3 Review of Venezuela .......................................................................................................................4 Geographic Location ....................................................................................................................4 Demographics ...............................................................................................................................5 Economic Indicators .....................................................................................................................5 Politics and Economic Freedom ...................................................................................................6 Analysis of Entry Modes .................................................................................................................7 Government’s Role ......................................................................................................................8 Joint Ventures ...............................................................................................................................8 Recent Events in Entry ....

Words: 4170 - Pages: 17

Premium Essay


...Vietnam: Fiscal Strategy and Public Debt Benedict Bingham IMF Senior Representative Presentation for National Assembly Hanoi- September 15, 2010 The views expressed in this presentation are those of the author and should not be attributed to the International Monetary Fund, its Executive Board, or its management.” Outline    Vietnam’s fiscal challenge Debt management issues IMF/WB Debt Sustainability Analysis 2 The fiscal challenge: how to finance investment needs? 2010 Liabilities Asset Public goods- Target - 2020 Asset Liabilities Public debt High quality High quality Public goods- Public debt Contingent liabilities Accumulated savings Public goods-Low quality Public goodsLow quality Contingent liabilities Accumulated savings Industry assets Industry assets The fiscal challenge: Constraints and Implications Three constraints:    Scope for increasing aggregate size of public sector limited Scope for raising debt levels limited Contingent liabilities will need careful management Some implications:  PPP may help but are unlikely to be a panacea (PPP should be driven by VfM not fiscal constraints) Raising savings (revenue), improving efficiency of investment, and equitization will all have to play a role. 4  Debt Management I: Definition of Public Debt Vietnam - Gross Public and Publicly Guaranteed Debt - 2005-2009 2005 2006 2007 2008 2009 (In percent of GDP) A. Gross public......

Words: 1589 - Pages: 7

Premium Essay

Why Oil Prices Fall?

...Oil price: traders and CEO’s clash over recovery prospects OBJECTİVES *What is the OPEC and it’s main goals? *Why are oil prices falling? *Who are the winners and who are the loosers? *Consequences of falling prices. *Important comments about oil price. What is the OPEC and it’s main goals? Organization of the Petroleum Exporting Countries (OPEC), a permanent, international organization headquartered in Vienna, Austria, was established in Baghdad, Iraq on 10–14 September 1960.Its mandate is to "coordinate and unify the petroleum policies" of its members and to "ensure the stabilization of oil markets in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers, and a fair return on capital for those investing in the petroleum industry. In 2014 OPEC comprised twelve members: Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela. Why are oil prices falling? Here are four main factors driving oil’s sharp decline: 1. US oil production is booming Exploding US oil production has transformed one of the world’s leading oil consumers into one of its leading producers as well – in fact, North Dakota alone produces a million barrels of oil per day. US production now rivals oil giants Saudi Arabia and Russia, largely thanks to innovative drilling that has unlocked oil and natural gas deposits trapped in shale rock. US production......

Words: 1530 - Pages: 7

Free Essay

Toyota Motors

...Corolla, Land Cruiser, and luxury Lexus line, as well as the Tundra truck. Toyota conducts its business worldwide with 27 countries and regions. The countries that Toyota operates are: Canada, USA, Argentina, Brazil, Mexico, Venezuela, Czech Republic, France, Poland, Portugal, Turkey, U.K., Russia, Kenya, South Africa, Egypt, China, Taiwan, India, Indonesia, Malaysia, Pakistan, Philippines, Thailand, Vietnam, Australia, and, Bangladesh. Toyota Motor Corporation is a Japanese automaker headquartered in Toyota, Aichi, Japan. Japan has a commercial law system based entirely on custom (Hahn, 1984). These customs were known and used by commercial society of Japan. It is being enforced by courts, guild, trades associations, and different self-regulatory guilds. Market System Market economy is the type of economy that Japan have. Market economy means that the resources are allocated and controlled by consumers who “vote: by buying goods (Daniel, Radebaugh, Sullivan, 2011). Japan’s economy relies on its manufacturing industry which produces automobiles, robots, televisions, and electronic equipment. Toyota Motor Corporation is best suited in this country because of their specialty in automobiles. Political Risk Political risk is the potential loss arising from a change in government policy (Daniel, Radebaugh, Sullivan, 2011). The types of political risk are: expropriation, international war, unilateral breach of contract, destructive government actions, harmful action......

Words: 897 - Pages: 4

Premium Essay


...Petróleos de Venezuela S.A. (PDVSA), Venezuela’s national oil company. It is the first in a series of development projects that are aimed at “re-opening” the Venezuelan oil sector to foreign investment. The project consists of three key components -Production of heavy oil from a new field in Venezuela’s interior -Transportation of the oil to coast via pipeline -Transportation of oil to refineries along the US Gulf Coast Once refined, the syncrude would be sold at market prices to Conoco under a DuPont-guaranteed off-take agreement. At the end of this 35-year purchasing agreement, Conoco will transfer its shares to Maraven at no cost. The sponsors agreed to use 40% of equity (40%) and 60% of debt to finance the project’s $2.425 billion total cost. The financial advisors, Citicorp and Credit Suisse First Boston, used a multi-pronged financing strategy to raise debt from commercial banks, development agencies, and bond investors. In the end, the sponsors raised $450 million in bank finance and $1 billion in Rule 144A bonds, all of which was non-recourse to the sponsors following completion of the project. The decision to finance this deal on a project basis was actually a dual decision regarding both financial and organizational structure. Risks analysis The purpose of this paper is to analyze how the sponsors allocated both contractual and residual risk in the Petrozuata deal. There are four general categories of risk: precompletion risks, operating risks,......

Words: 2224 - Pages: 9

Free Essay


...Bolivarian Republican of Venezuela; in order to study the current situation of the country for further investigations in the future that may help to understand the opportunities and risk involve in importing and opening new markets in Venezuela. The analysis includes reviews and an extensive research about: First the geography and global information to introduce the country; second, the History since the arrival of the Spaniards. The Political analysis will be explained as much detailed as possible due to its specifics characteristics in the recent decades with the Hugo Chavez’s government. He report draws special attention in the Social analysis is one of the main issues to be reviewed due to its importance at the time of making any decision. The economic aspect of course will be in consideration with both: the Official’s figures and the international observer’s ones, the graphics will be analyzed. It will be also mentioned the Business environments and the principal sectors to invest or that could be interesting to sell. To support all the information in the report before any conclusion, it will be used THE SWOT tool to demonstrate why Venezuela is an interesting place to import, especially in the last 5 years. It is not just a country of striking natural beauty, which ranges from the snow-capped Andean peaks in the west, through the Amazonian jungles in the south, to the beaches of the north, Venezuela is among the most highly urbanized countries in Latin......

Words: 6774 - Pages: 28

Premium Essay

Building a Bond Portfolio

...GEST-S411 Investments in a historical perspective Building a Bond Portfolio Vitalij Aleksandrov Gerard Haughey CONTENTS ➢ PART 1 ❖ What are bonds? ❖ What types of bonds exist ❖ Tools of analysis ➢ PART 2 ❖ Characteristics of a good bond portfolio ❖ Choosing a portfolio strategy ❖ Management of a bond portfolio ➢ PART 3 ❖ Creation of our portfolio ❖ Selection of bonds ▪ Analysis of issuer ▪ Technical analysis ▪ Expectations (including risks) ▪ Investment decision ❖ Investment summary ❖ Performance analysis ❖ Effects of crisis on the bonds chosen ➢ BIBLIOGRAPHY PART 1 What are bonds? In the same way that people borrow money, companies and governments also need to borrow money. A company needs to fund its expansion, conduct market research, develop new products etc., and the problem large corporations encounter is that they need more money than any single bank can provide. This is particularly the case with governments who need to fund everything from infrastructural projects to securing bank loans. Because they can’t borrow large sums from banks they must turn to the public market and raise money by issuing bonds. A bond is a fixed income security or a loan given by the bondholders (individual investors) to the......

Words: 9379 - Pages: 38

Free Essay

Brazilian Macro Environment

...I. The Brazilian Macro-Environment Investment Climate Analysis Brazil is quite interesting place for investment and many companies are entering this developing market. Its high GDP growth, large economy, developed infrastructure, liberalisation of public sector and many Foreign Direct Investments have turned this struggling country into developing nation that holds 2nd place (China is 1st) in amount of foreign capital invested into the economy. In last 5 years, Brazilian government has been quite stable and it seems that Brazil has a sound strategy when it comes to taking its economy into top performing ones. Government is introducing new, more liberal competition laws and it is introducing new forms of investments, such as PPP, or Private Public Property, where both the investor and government share the risks by holding equal stakes in the investments. But, let us not be blinded by the Brazilian marketing skills and their portraying of real investment climate. There is for sure a lot of space for improvement. We will perform a few analyses, which will give us precise insights into the environmental conditions for investing in Brazil, and through analysing this country; we shall decide what type of investment is the most suitable for Red & Green. PESTL Analysis Investment climate is the economical, institutional, policy, and regulatory environment in which firms operate. A PESTL analysis is an analysis of the external macro-environment that affects all firms....

Words: 1113 - Pages: 5

Premium Essay

Despite Most of the Latin American Countries Achieving Political Independence in the Early 19th Century, Not One of Them Was Able to Achieve First World Status over the Next One Hundred Years. Why Was This so?

...Despite most of the Latin American countries achieving political independence in the early 19th century, not one of them was able to achieve first world status over the next one hundred years. Why was this so? Concentrate on one country in your analysis. Latin America is the vast continent with three distinctive regions of Central America, South America and the Caribbean coast, and is composed of 33 republic countries varying in terms of population size from over 19 million Brazilians to 11 thousand citizens of Grenada. The ethnic make-up of modern Latin America comprises a variety of racial and ethnic groups such as Europe, Africa, Asia and American-Indians, all of whose root is based in 4 different continents. The notable physical geography is the range of Andes Mountains that are long narrow backbone of the continent from Venezuela through Colombia, Ecuador, Peru, Bolivia and on into Chile, and cut off the east coastline and the west inland areas. The other features are the Amazon and rivers, huge tropical rain forest, and lastly, an abundance of natural resources as well as vast hectares of farmland. These geography features are an important factor that hampered economic growth due to difficulties in public transit and transportation between regions, hindrance of social and political unity, and therefore, unable to achieve a formation of large unitary state, like North America, that led to separation into large and small 30 countries. To comprehend Latin America’s......

Words: 2403 - Pages: 10

Premium Essay

The Importance Of Marine Aquaculture

...This study uses an OWA-based decision analysis approach to combine the concept of risk into the GIS-based analysis to determine the suitable areas for marine aquaculture. Therewith, the two types of combination rules can be generalized within the framework of OWA. So, this paper presents a quantitative evaluation in the coastal regions with the depth less than 50m, using Geographic Information System (GIS) based on Multi-Criteria Evaluation (MCE) with Ordered Weighted Averaging (OWA) technique and also satellite remote sensing technology to identify suitable sites for marine aquaculture development in the southern part of the Caspian Sea, Coasts of Mazandaran...

Words: 947 - Pages: 4

Free Essay

Alba Case Study

...Chavèz………………………………………………… 7. Conclusion……………………………………………………………………………………… 8. Bibliography……………………………………………………………………………………………… Introduction 1. Definition ALBA defines itself as "the Latin American option that fights for the autodetermination and sovereignty of people of its regions", especially, against of what they define "all the imperialistic politics of United States of America". (Alianza Bolivariana para nuestros pueblos de America, 2004) In other words, it is an integration platform that focuses on solidarity, complementarity, justice and cooperation between countries of Latin America that want to achieve together the level of "integral development through its own alternative way, in the middle of the increasing formation of regional predominant blocks in the world". (ALBA, 2010). This aim was initially reached thanks to the efforts of two countries, Venezuela and Cuba, that in December 2004 joined to put into real words their intentions to create a southern cooperative alliance. That alliance should mainly oppose to the politics of the Free Trade Area of Americas, imposed ten years before by U.S....

Words: 4562 - Pages: 19