Investments in Emerging Countries - Essay Example

Investments in Emerging CountriesBusiness Risks in Russia: Political and administrative risk is the major risk in Russia. Russia’s political situation is not investment friendly. The upcoming presidential election in the country is another cause of concern at present. There are strong bureaucratic obstacles for getting things done. Corruption among the political and governmental level is at an increasing pace in the country. (World Economic Forum, 2010) Investments in Russia is facing sharp fall for the past few months.

Higher global crude oil price is expected to benefit Russia’s economic recovery. But this benefit will be carried away by the expected capital outflows. The capital outflow of Russia is much higher compared to that of the inflow. Business Risks in Czech Republic: The political risk of Czech Republic is lesser compared to that of Russia. Rising oil price is one of the business risks in Czech Republic. Annual oil production of the country is much below its annual oil consumption. (Theodora, 2011) Therefore, the rising oil bills will increase cost of production and paving way for an inflationary situation in the country.

Another risk of the country is the strict legal system. Bureaucracy is at an increased rate in the country. Another risk factor is that the capital market of the country is small. Czech Republic is mostly an export related economy with majority of its exports being to other European countries. Therefore, the performance of the country’s economy depends largely on the stability of other European nations.Best Investment: The analysis of business risks at both the countries show that Czech Republic is better placed with less investment risks than Russia.

Economic factors are positive to Czech Republic than Russia. Therefore, Czech Republic is the better investment destination than Russia. Works CitedWorld Economic Forum (2010) Current Investment Risk in Russia. Retrieved May 20 2011. From: http://www.scribd.com/doc/25778254/Russian-Roulette-Current-Investment-Risks-in-Russia-January-2010 Theodora (2011) Czech Republic Economy 2011. Retrieved May 20 2011. From: http://www.theodora.com/wfbcurrent/czech_republic/czech_republic_economy.html Economic Intelligence Group (2011) Czech Economic Risk: Macro Economic Risk.

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