August 2017 TABLE OF CONTENTS ITEM PAGE Introduction. .4 Economic Factors. 4 Political Factors. 6 Recommendations. 7 Conclusion. 8 References. 10 EXECUTIVE SUMMARY.
With the emergence of the developed nations shifting their focus towards the emerging economies a lot of international investors have had an interest in setting up ventures and marketing their products and services in them. These emerging markets characterized by fast economic growth, numerous investment opportunities, high risk, and high returns have been a hotcake even for international financing bodies like IMF and the World Bank. However, despite these positive indications there have been impeding factors that have either slowed or hindered the growth of the economies both political and economic. This report is presented to the World Trade Organization serves to highlight some of the major political and economic factors that have presented a challenge to the international investors from marketing their products and services to the emerging economies and also recommend possible practicable ways to solve them.
The World Trade Statistical review 2016 shows that in China after years of investment backed by credit have resulted in some sectors booming whilst others due to misallocation of resources and buildup of debt have had to gradually decrease, and hence the contribution of the WTO through increased trade integration has decreased as well. Lack of favorable means of financing of the economic sectors in the EMEs has led to slow economic growth and hence making investors doubtful about marketing their products and establishing business ventures in them.
3 0 POLITICAL FACTORS. The first notable factor that scares potential international investors is political instability. Changes in regimes associated with harsh unfavorable political ideologies and laws have been a great impediment in these EMEs. Corruption in Brazil and South Africa has caused many international investors to stay aloof of the countries. Xenophobic tendencies that were witnessed in South Africa in late 2016 and early 2017 scared many international investors. Speaking in an interview with Aljazeera the South Africa President condemned the acts of violence and attacks on foreigners saying that they were scaring valuable investors in the country who were vital for economic growth Aljazeera 2017.
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