Question

(a) Drawing conclusions from socio-economic data.

Task: The below table shows socio-economic data of two fictitious countries. From the perspective of a business considering the possibility of undertaking business in these countries, consider what the data could mean and present three conclusions. Each conclusion should compare both countries using at least two variables.                                                                                   (4 marks per conclusion)

Note: You can relate each conclusion to any type of international business (eg. you can present a conclusion from the perspective of a business choosing a new export market, a business seeking an import source, a business choosing a location for FDI, etc). Each conclusion should be at least about 150 words but not more than 200 words.   

Country	Country A	Country B
1. Population	207.35 million	96.16 million
2. Area	8.52 million km²	331,210 km²
3. GDP	US$2.081 trillion	$216 billion
4. GDP Per capita (PPP)	US$ 15,500	US$ 6,900
5. Gini Coefficient	.51	.35
6. Population below poverty line	3.7%	11.3%
7. % of Urban Population	86.2%	34.9%
8. Main Exports	Transport equipment, iron ore, soybeans, footwear, coffee.	Clothes, shoes, electronics, seafood, rice, wooden products, crude oil.
9. Main Imports	Machinery, electrical & transport equipment, chemical products, oil, automotive parts.	Machinery & equipment, petroleum products, steel products, raw materials for manufacturing industries, automobiles.
10. Inflation	3.7%	4.4%
11. Internet Users (% of Population)	59.7%	42.7%
12. UN Human Development Index (HDI)	.514	.337
13. Adult literacy rate 14. Labour Force by Occupation	92.6% 10% agriculture, 39.8% industry, 50.2% services	94.5% 48% agriculture, 21% industry, 31% services
15. Unemployment	13.1%	2.3%

Answer 1

Conclusion 1:

To undertake the e-commerce business in the country A. Because the country has the highest internet penetration rate of 59.7% and the Un human development index was high compared to the other country. Considering the unemployment ration in the country and the labor force allocation percentage, undertaking the e-commerce business will help the company to gain advantage of the knowledge pool and buying potential.

Conclusion 2:

Exporting agriculture machinery equipments to Country B. As the 48% of labour force is employed in agriculture and the percentage of urban population is very low in the country. So this business would fetch profit.

Conclusion 3:

Undertake the export business of iron ore in the country A. Because the labour force is high in the industry sector and the inflation of the country is also low. So in real terms, making profit is feasible with the lesser currency fluctuations. Employing the labour is also easy because of the higher unemploymen rate in the country and the higher UN devlopment index.