Impact of Global Issues on Business

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Impactof Global Issues on Business

Impactof Global Issues on Business

Internationalbusiness is mainly driven by socio-political relations amongcountries. Therefore, effects of wars or terrorist attacks in onecountry impact on various nations across the globe. Among the currentcritical issues facing the world is the lack of appropriate foreignpolicies and means to combat terrorism. For example, the UnitedStates has been a global force for stability. However, in recentyears, their imperfect foreign policy compounded with hesitancy toemploy military forces in regions facing difficulties has impactednegatively on the global economy. Even though Europe is capable ofdealing with the emerging security issues, it requires the U.S. forleadership. In that regard, the lack of proper foreign policiesresults to security problems in various countries that impactnegatively on the global economy [ CITATION Bor15 l 1033 ].

Instabilityin countries like Syria, Somalia, Iraq, and Afghanistan among othersposes security threats to stable nations. The recent attacks on Parisexemplify the socio-political conflicts. Due to the attacks, Francehas been forced to use more money to restore the affectedinfrastructure. Such a measure increases their spending as well asdebts. For instance, according to fiscal reports, France’sbudgetary needs increased. Apart from that, the nation’sdiscrepancies continually pose a problem to the Eurozone [ CITATION Wor16 l 1033 ].

Instabilityin these countries also increases the refugee crisis. As per the UNestimations, more than one million refugees entered Europe in 2015 toclaim asylum. On a global perspective, UNHCR affirmed that the numberof refugees increased by 40 percent in 2015 to reach 60 million. Themost affected nations include Sweden, Hungary, Italy, Austria, andGermany. The short-term economic repercussions of the inflows arehigher GDP growth emanating from the temporary increase inexpenditure. Furthermore, integrating the large inflows may be achallenge, especially for refugees coming from less developednations. For example, Syria’s GDP per capita was 5000 USD beforethe conflict. This is roughly 10 percent more than Germany’s orSweden’s [ CITATION Bor15 l 1033 ].

Terrorismcontributes immensely on financial uncertainties. For instance,businesses in some African states like Kenya were affected due to theAl-Shabab terror group. Lack of proper policies, as well as foreigninvolvement in curbing this terror gang, has resulted negatively onthe country’s tourism sector. The same case applies to Nigeria dueto the Boko Haram terror group. Therefore, leaving vast areas underthe control of these extremist sects like Daesh, Taliban, Al-Shababor Boko Haram is an international security risk [ CITATION Bor15 l 1033 ].

Solution

Countriesmust solidify their foreign policies and heighten their involvementin challenging regions. The tragic activities in Paris necessitatecoalitions between the U.S., U.K., Russia, and France as well as itsneighbors. The U.S. and Europe must also join hands to limit thethreats posed by the terror squads. This is because countering theextremist groups will impact positively on the global securityleading to a more conducive environment to conduct businesses.Conflicts or rather mistrusts among the superpowers prevents themfrom working in harmony. If all the superpowers work together,terrorist sects like Al-Shabab can be eliminated. This would giveinvestors confidence to enter new markets that are currently warzones [ CITATION Wor16 l 1033 ].

Mostof these war-zone areas are rich in minerals and other profitablecommodities. However, the countries do not maximize on the assets. Agood example can be drawn from Sudan. Due to the conflict betweenNorth and South Sudan, the countries have failed to maximize theiroil reserves. Therefore, foreign involvement of stable nations isvital to maintaining peace across the globe and preventinguncertainties that impact negatively on the global economy.

References

Borg, A. (2015, December 23). 6 factors shaping the global economy in 2016. Retrieved from https://www.weforum.org/agenda/2015/12/6-factors-shaping-the-global-economy-in-2016/

World Economic Outlook. (2016, January 19). Subdued Demand, Diminished Prospects. Retrieved from https://www.imf.org/external/pubs/ft/weo/2016/update/01/pdf/0116.pdf

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