respond to both

One01

To say that both Brazil and Venezuela have had their share of problems economically and politically the past few years would be an understatement. Consequently, deciding to invest in either country will be making a choice between the lesser of two evils.

Risk Assessment - Brazil

Brazil has an uncertain economic and political future. Household consumption, which is the main driving force for growth, has dwindled due to high costs of credit. There are also lower wages as result of high inflation, as well as 11% unemployment rate, as of March, 2016. Additional risks in Brazil include inadequate qualified labor force, insufficient investments, shortfalls in infrastructure - transportation and energy, and high production costs. (Coface, 2016.).

Politically, the impeachment of former president Dilma Rousseff, threw the country into chaos. The interim president, Michel Temer faces political instability due to the fact that he was not democratically elected. This political instability has sowed doubts in the minds of critics about the government's ability to meet its fiscal targets. (Coface, 2106).

Risk Assessment - Venezuela

Attempts by the late president Hugo Chavez to nationalize the agribusiness, financial, construction, and oil and steel industries severely hurt the private sector. Corporate financial information is mostly unavailable. Food shortages and problems with electricity continue to plague the country. Household purchasing power is virtually non-existent due to higher inflation. Drop in oil prices has affected the government's ability to spend on social programs for the masses. There is low production in agricultural products, thereby leading to food shortages. It appears President Maduro does not have enough political skills to come up with an economic strategy to pull the country out of its economic woes. Shortage of foreign currency has exarcibated the country's economic problems. (Flannery, 2014).

Recommendation

My recommendation after analyzing the risk assessment of both countries is to invest in Brazil. Brazil is the sixth-largest economy in the world. The business environment, while not stellar, is mostly acceptable. Unlike Venezuela, which is still reeling economically due to the drop in oil revenue. Agricultural and mineral resources are abundant. Manufacturing industries like aerospace, chemicals, and pharmaceuticals are quite advanced. Brazilian sovereign bond market trades at a premium. This makes Brazilian bonds attractive because it provides good interest. (Rapoza, 2015).

One102

You have an enthralling post-Fr. Mensah and your excerpt of both countries politically and economically are well precise based on what I read about Brazil and Venezuela. I have never been in Latin America but being born and raised in the Philippines made me relate the similarity to both Venezuela and Brazil for having abundant natural resources as well as the corruption issues. The two countries shared similar corruption problems and political crisis that influences an immense role in the success of any business settings. Learning and understanding the overall culture of the host nation can be provocative but knowing the people, market industry, and interest would be the preliminary aspects of the market strategy to the new business location. Edward (2008) recognizes that corruption wastes and misallocates resources are advantageous to the bribers and corrupt public officials. He furthered asserts that misguided approaches created the bottleneck that stifles growth in the evolving and transition economies. The corruption is like a poison that can be detrimental to the societies because it undermines the democracy, the rule of law, and the violations of human rights including the human security. It is quite challenging for any business entity going to a foreign country; manager should assess the countries cautiously and should perform cost and risk analysis focusing on long-term benefits of the firm. According to Hill (2015), the cost of doing business in a country is greater where political payoffs are required to gain market access. The cost is substantial especially if the country is lacking infrastructures inclusive to the adherence of the laws and policies.