Business development & management assignment essay on: Country introduction with global competitiveness report help

Q.1.) briefly introduce the Country by referring to its position in relevant aspects of the Global Competitiveness Report 2011-2012. Go to the following website to view the Report & then find your Country.

It is very clear that the Global Competitiveness Report 2011–2012 is prevailing at the occasion of re-emerging the uncertainty in the international economy. This report features the record no. of 142 economies and therefore continues to the most comprehensive evaluation of the kind. This report comprises the in-depth profile for each and every economy included in study and extensive range of data tables with international rankings covering approximately 100 indicators. Georgia considered as the sovereign state in the region of Caucasus of the Eurasia. The Georgia Capital is Tbilisi. Georgia covers the territory of 69700 km2 and the population about 4.7 million (Global Competitiveness Report, 2011). Georgia considered as unitary and semi-presidential republic with the elected government through the representative democracy. After the evaluation of the Global Competitiveness Report 2011-2012, it is viewed that Georgia is one of the economies which lies in the transition stage like from stage 1 to stage 2. As per the report, 24 economies are lying in the transition stage 1 to stage2. As per the report, GDP of the Georgia is about 11.7 US $ billion and GDP per capita of the Georgia is about US $ 2658 (Global Competitiveness Report, 2011).  The five most problematic factors for doing business in Georgia have been identified such as Access to the financing, inadequately educated Labor force, Inflation, Bad work ethic in global labor force, Tax regulation and Political Instability.

The 12 Pillars of Competitiveness

There are various factors which drive the competitiveness and productivity. Understanding of the factors behind the process has filled the economist’s minds for 100 of years, producing theories varying from focus of Adam Smith on the labor division and specialization to the neo-classical economist stress on the investment in physical infrastructure and capital and currently interest in other procedures like training, education, macroeconomic stability, technological achievement, sophistication of the firm and efficiency of the market among others.

First pillar: Institutions

The institutional atmosphere is established by administrative and legal framework throughout which governments, firms and individuals coordinate to create wealth. The significance of the sound institutional atmosphere became apparent throughout the time of economic crisis.  The first pillar of the Georgia ranks at 60 among the 142 economies and scores 4 out of 7.

Second Pillar: Infrastructure

Efficient and extensive infrastructure is important for guaranteeing the efficient performance of economy and considered as the significant factor for finding out the situation of economic action and types of activities which can form in a specific instance.   The second pillar of the Georgia ranks at 68 among the 142 economies and scores 4 out of 7.

Third pillar: Macroeconomic environment

The macroeconomic stability is significant for the business and considered as significant for the entire competitiveness of the country. The third pillar of the Georgia ranks at 137 among the 142 economies and scores 3.7 out of 7.

Fourth pillar: Primary education and Health

It is very clear that healthy workforce considered as very crucial to the productivity and competitiveness of the country. The fourth pillar of the Georgia ranks at 67 among the 142 economies and scores 5.7 out of 7

Fifth pillar:  Training and Higher Education

Quality training and higher education is vital for economy which wishes to move the chain of value beyond the simple products and process of the production. The fifth pillar of the Georgia ranks at 88 among the 142 economies and scores 3.9 out of 7.

Sixth pillar: Goods market efficiency

Countries with the effective goods market are well located to offer the accurate combination of service and products given their specific demand and supply conditions to make sure that these products and services might be efficiently traded in economy. The sixth pillar of the Georgia ranks at 74 among the 142 economies and scores 4.2 out of 7.

Seventh pillar: Labor market efficiency

The flexibility and efficiency of the market of the labor are significant to make sure that employees are given to their most effective use in economy and offered with benefits to offer their best effort in the job. The seventh pillar of the Georgia ranks at 32 among the 142 economies and scores 4.7 out of 7.

Eighth pillar: Financial market development

The current economic crisis has pointed out the central function of the financial department for the economic activities. The eight pillar of the Georgia ranks at 99 among the 142 economies and scores 3.7 out of 7

Ninth pillar: Technological readiness

In current globalized world, it is viewed that technology becomes increasingly essential for companies to prosper and compete. The ninth pillar of the Georgia ranks at 100 among the 142 economies and scores 3.2 out of 7.

Tenth pillar: Market size

The market size impacts the productivity therefore big markets permit firms to develop economy of scale. The tenth pillar of the Georgia ranks at 106 among the 142 economies and scores 2.8 out of 7.

Eleventh pillar: Business sophistication

It is very clear that sophisticated practices of the business are favorable to the higher efficiency in services and goods production. The eleventh pillar of the Georgia ranks at 110 among the 142 economies and scores 3.4 out of 7.

Twelfth pillar: Innovation

The last pillar of the competitiveness is the technological innovation. In general, huge gains may be received by enhancing institutions, maintaining infrastructure, minimizing macroeconomic stability, enhancing human capital all these aspects view to run into minimizing returns. The twelfth pillar of the Georgia ranks at 118 among the 142 economies and scores 2.6 out of 7.

Global Competitiveness Index of Georgia

The basic requirements of the Georgia Country such as Institutions, Infrastructure, Primary and Health Education and Macro Environment contribute only 46.8% to the economy of the Georgia and ranks at 86 among 142 economies and scores 4.3 out of 7. According to the Global Competitive Index of the Georgia efficiency enhancers contributes only 44.9% and ranks at 89 among 142 economies and scores 3.7 out of 7. On the others side, Sophistication and Innovation factors contribute only 8.3% to the economy of the Georgia and ranks at 117 among 142 economies and scores 3 out of 7. In general, sophisticated practices of the business are favorable to the higher efficiency in services and goods production.

Q.2.) Apply the theory of country size to the Country (eg. population, climate, resources, etc) & discuss the nature of the nation’s ‘natural advantage’.                       

Theory of country size

The theory of international trade which supports that country with the great land areas is more pertinent to have diverse natural resources and climate and hence considered as more self sufficient as compared to other small countries.

Climate

It is viewed that Georgia climate is extremely varied referring the small size of the nation. There are 2 major zones of the climate which separates Western and Eastern parts of the Georgia Country. The Caucasus Range of the Mountain performs the significant function in moderating the climate of the Georgia and safeguards the country from the dispersion of the masses of the colder air from the region of north (Kokochashvili, 2008). The Eastern part of the Georgia has the transitional climate from subtropical to the continental. The region patterns of the weather are affected by dry, Caspian masses of the air from the east and Black Sea masses of the air from west. The humid air penetration from Black Sea is blocked by several ranges of the mountain which separate the western and eastern portion of the Country.

Population

Georgia captures the area of approximately 70000 sq km and therefore twice the Belgium Size and closely twice the large as the Switzerland. Georgia considered as the mountainous country. As per the sources of the 1993-95 around 462800 people survive in Georgia. The major ethnic groups surviving in Georgia are Karteli, Megreli, Achareli and Svani.

Resources

Georgia is very affluent in the mineral resources. The Republic of Georgia has about approximately 1000 mineral spring that differs in the chemical content.

  Natural advantage

The natural advantage of the Georgia is Regional Hub in regions of South Caucasus and Black Sea and considered as the gateway among the Central Asia and Caucasus offers several benefits to the investors in the processing and manufacturing (Bureau of European and Eurasian Affairs, 2011). Georgia has best factors of the cost, transport chain and logistics and environment of the business for performing the region of Southern Caucasus and various basic raw materials. During 2004, Georgia has both international and domestic investment in sector of manufacturing throughout all the major sectors comprising mining, building materials, processing of natural resources, shipbuilding, aircraft and auto accessories. The natural advantages of the Country Georgia are low cost and skilled workforce; FIZs provide preferred access of the market to approximately 500 million customers, Regimes of Tax free available for export and production, considerable raw materials and natural resources and high local demand for the manufactured goods.

Q.3) Relate the political & economic characteristics of the country to the government’s attitude to trade (inward & outward) – consider evidence of the government’s objectives for international business.

Political Characteristics

It is viewed that in year 2004, the Georgia Government started the variety of significant reforms. The process of the reform is ongoing and shall need implementation to accomplish stated goals. The Georgia Government has taken the action against the corruption and obtaining great marks from World Bank. In Dec 2008, foreign ministers of NATO agreed that country Georgia must form the yearly national program throughout the NGC auspices. During the previous three years, Georgia Country has created the huge progress towards accomplishing the ambitious goals.

Economic Characteristics

Georgia has faced so many challenges in the diversification of the trade. The main market to which Country Georgia has conventionally been associated is Russia. The turnover of the foreign trade of the Georgia in year 2010 was approximately about 6.731 billion. The trade deficit of the Georgia for year 2010 was 3.6 billion (Bureau of European and Eurasian Affairs, 2011). In year 2004, the Georgia Government started the range of significant reforms. Reforms have objected at enhancing respect and reinforcing the law rule like 2006 amendments of the constitution intended to enhance the judiciary independence and 2007 legislation ex parte communication.

Evidence of the government’s objectives for international business

The Georgia Government has started the aggressive campaign to oppose trafficking in the individuals. Georgia considered as the WTO member and started taking advantages from EU Generalized System of the preference scheme (Kaufmann &Vishwanath, 2001). To increase the markets of the export, EU and Georgia will explore alternatives under the action plan of the ENP for increasing bilateral trade associations comprising the potential formation of free agreement of the trade. Commission shall undertake the feasibility study and look at the aspects of economic integration and regional trade (Bureau of European and Eurasian Affairs, 2011). Georgia has the robust wish for establishing the agreement of the free trade with the Turkey. During the previous three years, Georgia Country has created the huge progress towards accomplishing the ambitious goals. Broad-ranging reforms have been started comprising trade liberalization, the SME’s privatization, the removal of price controls and subsidies, privatization of the land and laws adoption objected at fostering the investment and enhancing the climate of the business. The Georgia Government has located the recovery of the territorial integrity on the political agenda by the conflicts solution in South Ossetia and Abkhazia and has increased efforts to increase the integration of the Georgia in structures of Euro-Atlantic and EU.

Q.4.) finally, discuss how the Forces of Globalisation influence (b) & (c) above, & make & justify recommendations for possible improvements to the nation’s current approach to international business.

The Forces of Globalization has made the considerable impact on the Georgia Country for e.g.  Georgia has both international and domestic investment in sector of manufacturing throughout all the major sectors comprising mining, building materials, processing of natural resources, shipbuilding, aircraft and auto accessories (Martin & Artadi, 2004). Georgia has faced so many challenges in the diversification of the trade. The main market to which Country Georgia has conventionally been associated is Russia. Broad-ranging reforms have been started comprising trade liberalization, the SME’s privatization, the removal of price controls and subsidies, privatization of the land and laws adoption objected at fostering the investment and enhancing the climate of the business. The natural advantages of the Country Georgia are low cost and skilled workforce and FIZs provide preferred access of the market to approximately 500 million customers (Global Competitiveness Report, 2011).

Recommendations for possible improvements to the nation’s current approach to international business

The Georgia Country should have accessible channels in place for description of the suspected actions of the bribery of the foreign officials in the transactions of the international business to enforcement authorities of law in relation with its lawful principles (Kaplan, 2009).

The Georgia Country must have appropriate measures in place to assist the reporting by the officials of the public, directly and indirectly through the internal mechanism to authorities of law enforcement of the suspected bribery acts of the public officials in the transactions of the international business detected in course of the work in relation with the legal principles.

The Georgia Country should have sufficient measures in place to safeguard from disciplinary or discriminatory actions.  Private and public sector workers who work in good belief and reasonable opinions to competent authority suspected bribery acts of foreign officials in the transactions of the international business.

The agencies of the Government are required to consider transactions of the international business carefully, sufficient internal controls, compliance programs and ethics in their decisions to grant the advantages of the public comprising subsidies, contracts of public procurement and supported credits of the export (Kokochashvili, 2008).

The agencies of the Government in Georgia must contribute to the evaluation of the capacity requirements, in relation with other evaluation techniques like peer review and measurement help in forming the effective process of the funding for the capacity building.  Best practices must be adopted which offer expertise in the formation of the free market economy and private enterprise.

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