A current affair in this region is Brexit. The uncertainty of the trading future of Britain has led to businesses moving to the EU. They want to continue to have the ability to trade with Europe freely as many of their business plans rely on this. Though, perhaps the predicted complications of Brexit won’t be as disastrous as laid out. Two of the highest countries on the HDI (Human Development Index) are Switzerland and Norway, neither of which is part of the EU. Norway also ranks in the top 10 on the ease of doing business rank proving the EU is not a defining factor on how easy it is to do business in a country. A significant factor not to be forgotten about is a corruption of the government. In Zimbabwe,...
A current affair in this region is Brexit. The uncertainty of the trading future of Britain has led to businesses moving to the EU. They want to continue to have the ability to trade with Europe freely as many of their business plans rely on this. Though, perhaps the predicted complications of Brexit won’t be as disastrous as laid out. Two of the highest countries on the HDI (Human Development Index) are Switzerland and Norway, neither of which is part of the EU. Norway also ranks in the top 10 on the ease of doing business rank proving the EU is not a defining factor on how easy it is to do business in a country.
A significant factor not to be forgotten about is a corruption of the government. In Zimbabwe, under the rule of the last Prime Minister – Robert Mugabe – there was a massive farming land reform. Mugabe used his power to gather all farming land no matter who owned it and distribute it in favor of the elite. This unwise decision has been argued to have led to the collapse of the Zimbabwean economy. It meant that your abilities as a farmer had no effect on how much land you were allocated so many of these ‘elite’ with no interest in farming for the good of the country, were given a substantial amount of land which was not used properly. Overall, it would not be a good idea to farmland in a corrupt area such as Zimbabwe which is currently ranked 132 out of 154 on the world audit corruption scale. A corrupt government could lead to unfair changes to any business in that country making it less profitable and possibly insolvent.
On the other side of the scale, in the countries where there are reputable governments and little corruption, there are many forms of support available to businesses. These come in the form of subsidies – a type of grant given by the government to promote the expansion of a form of business. Subsidies are typically given to businesses which produce sustainable energy supplies or are operating for the interest of the greater good. If a business falls into these categories, it would be of their interest to locate in a country which provides one of these subsidies. This additional funding and support would increase the chance of business survival by tenfold.
