Country Project Part C

Trade and Investments

TRADE AND INVESTMENT

Country explanation

Saudi Arabia

Saudi Arabia is a country located in the Middle East. It is the leading economy in the Middle East region. The region mainly relies on oil, which makes it the backbone of the country’s economy. The country is made up of mostly deserts. Some of the neighboring countries include the UAE, Qatar, Oman, Jordan, and Kuwait. It has a monarchial system of governance, and the head of government is the prime minister and the King. The general; set up of the country plays an effectual role in promoting the economic development of the country (Sharpe, 2018). Since the country has readily available labor that facilitates it to boost its economy in a positive way. It is a key member of the Arab league which enables it to participate in major economic activities in the region.

Argentina

Argentina is a South American country found in the southern part of the Atlantic Ocean. The country is economically stable and has a positive GDP as it can correctly utilize its economic resources. The neighboring countries include Brazil, Bolivia, Uruguay, and Paraguay. It is a republic meaning that it observes democracy. The mixed economy system of the country perfectly plays an essential role in the development of the nation. It has developing private freedom that has a centralized economic planning system (Sharpe, 2018). The fact that it is a member of the South American common market is a common factor that creates a broader on the way it applies. It is a positive factor that has played an essential part in boosting the economic skeptic of the country. Therefore, it is a key economy in South America.

Comparative Advantage

Saudi Arabia

The production of oil makes Saudi Arabia have an existing comparative advantage over its competitors. The action enables it to export its oil to finance its major imports. It allows the country to participate freely in world trade without any difficulties that may seem to hinder its operations. It is a significant contributor to its overall wealth. The cheap production of oil has positively contributed to the economic development of the country.

Argentina

Agriculture is the main factor that makes the country has a comparative advantage in global trade. Agriculture makes up 54% of the exports that the country makes on a global basis. Today, it makes up the 5th largest exporter of wheat in different parts of the world. The utilization of the exports enables the country to be a significant importer of the basic commodities that it requires to promote economic development.

Firms and Industry

Saudi Arabia

Firms in Saudi Arabia play a huge part in the creation of comparative advantage to the country. Top companies such as SMH industrial Services plays an essential role in the cheap production of oil, which has created a positive advantage for the industry. Other companies such as Vallourec has played a fundamental role in the creation of positive operational skeptics within the industry (Sharpe, 2018). Ideally, the positive contributions of the firms enable the country to earn revenue in a required manner.

Argentina

The agricultural sector in Saudi Arabia has played an essential in the economic development of the country. The firms ensure that the comparative advantage that they have is maintained in a positive way which contributes to the emergence of the country as a global exporter. Some of the companies include Al Este, Aluar, and America 24.

COUNTRY RISK

6 factors world bank

Voice and accountability is a major governance indicator that aids in the provision of better performance in a country. It aids in the identification of key economic issues that positively contributes to the growth of the country. It is a major issue that positively contributes to the growth of the country. Political stability is a clear indicator that the country is making progress in terms of security. A stable country reflects on the ability of the country to relate with the political dynamics in a perfect manner positively. Government effectiveness aids in the analysis on the country in terms of governance and implementation of order which important. The regulation of quality is a key indicator that ensures that the country progresses in a positive manner. Quality regulation plays an important role in ensuring that the existence of counterfeit products in the country is completely eliminated (Brink, 2014). This is a practice that the government needs to ensure that it is perfectly controlled based on the complication involved in the whole set of activity. A look at key factors such as the rule of law. The control of corruption is a factor that is used to assess the level of integrity in the country. A control of corruption indicates the ability of the country to progress economic wise without any form of hindrance that might affect its progress in a positive manner.

Compare and Contrast the primary sources of political risk in both countries

Social instability is a major primary political risk factors that affects both countries. The issue relates to fundamental problems such as the political structures of the country. A look at Saudi Arabia provides a broader understanding of how the matter needs to be approached when it comes to top main issues that involve the political interests of the country. This is a basic matter of concern that involves a social understanding of how specific issues need to be handled. The political structures in Saudi Arabia are more stable since they rely on the Islamic system to create them. The structures of Argentina are also stable, making both countries to experience a high level of political stability in the required manner. A look at the political violence as a primary source of political risk provides a broader illustration of how the matter could be effectively handled in this case (Brink, 2014). This is an important practice as it would lead to a perfect social understanding of how specified issues need to be handled when it comes to addressing the interests. The political violence in both countries is quite low, creating a competitive advantage for both countries in this case. Lastly, government incapability is also another source that can be used to assess the level of political stability. In this case, both governments are capable of dealing with all its duties in a perfect manner.

Country Score Explanation

Saudi Arabia

Voice and accountability in Saudi Arabia increased in 2017. Political stability has reduced over the past three years in the country. The level of government effectiveness risen in 2017 to 62.50. The regulatory quality reduced compared from the year 2012 and 2017. The effectiveness of the rule of law was also the same. Lastly, the level of corruption in the country has increased.

Argentina

In terms of the voice of accountability, Argentina is quite high, which is a clear and key factor. The level of political stability in Argentina is high compared to India. Government effectiveness is quite lower in Argentina compared to Saudi Arabia. The regulatory quality in Argentina is quite lower. The level of the rule of law is high in Argentina.

References

Sharpe, W. F. (2018). Investors and markets: Portfolio choices, asset prices, and investment advice. Princeton, N.J: Princeton University Press.

Brink, C. H. (2014). Measuring political risk: Risks to foreign investment. Aldershot: Ashgate.