How Do Institutional Weaknesses Create or Exacerbate Political Risk in Mongolia - Research Paper Example

International Business – Mongolia How do al weaknesses create or exacerbate political risk in Mongolia? Introduction According to John D. Rockefeller, depression and prosperity are two ends of a coin that may come and go every now and then. However, due to which, the political stability might get destroyed to a significant extent thereby hindering the economic scenario of the nation. As a result of which, the rate of unemployment, poverty and illiteracy enhanced that declined the living standards and life style of the citizens to a certain extent among others. Due to which the image and reputation of the nation declines that hinders its reliability among other neighboring nation. Such a similar scenario may be witnessed in the entire globe at the time of interwar period. Due to which, not only the financial institutions became collapsed but also a political unrest took place in the entire globe that hampered its growth to a significant extent. However, among many others, Mongolia is one of the noteworthy nations, whose political scenario is totally hindered due to the economic turmoil (Kasuya, 2003). This research essay is divided into three phrases mainly highlighting the impacts of interwar in various nations in the entire globe. Along with this, it also describes, the ways by which, the political situation of the nation of Mongolia became disturbed among others. Discussion Interwar period is recognized as the time frame within 1919 to 1939. It is time in which the World War I ended and the World War II began. Due to which, it is recognized as one of the vital time frame for the financial institutions as entre change-over is taking place. This is because, it is time, in which the banking institutions of various nations like France, Britain and Mongolia is trying to pull back huge amount of money from stock markets. This is mainly due to the downfall or crash of stock markets. As a result of which, the economic activities of the nation of Mongolia slowed down thereby declining the prosperity of the nation to a significant extent. Along with this, due to lack of financial help from the institutions, the idea of over production and future investment is stopped that hindered the economic progress of the nation of Mongolia to a certain extent. It is mainly due to the presence of economic turmoil or recession in the nation. In addition, due to recession numerous institutions became closed thereby terminating or huge amount of individual. As a result of which, the rate of unemployment and redundancy enhanced thereby declining the level of living standards and economic conditions of the citizens of Mongolia certainly. Moreover, the income level of the educated citizens reduced mainly due to decline in the profit margin of the organizations. As a result of which, the economic conditions attained significant changeover that also offered considerable impacts over the political scenario of the nation (Milet, 1998). The economic distress also increased the prices of the products to a high-soaring height that proved extremely problematic for the citizens to maintain their livings. These underlining reasons are considered as some of important reasons that hindered the political stability of the nation of Mongolia among others. Furthermore, due to recession, the business entrepreneurs lost their confidence and sopped investing in numerous shares and bonds. As a result of which, the financial institutions as well as the insurance companies had to experience a serious set-back. Due to which numerous insurance organizations as well as financial organization had to face the negative impacts of bankruptcy. Thus, at this point of time, the entire nation came to a standstill position that not only stooped its business transactions but also its export and import operations. As a result of which, the price of the products increased significantly that proved quite problematic for the citizens to maintain their lives (Murray & Millett, 1998). In addition to recession, depression also took place at this time period in the nation of Mongolia. Due to which, the interest rates of the financial institutions declined that offered high level of negative effects over the political scenario of the nation. Maximum extent of the citizens desired for democracy and some extent wished for capitalism. Due to which a distressful condition aroused within the nation that created a conflicting scenario. In addition, due to depression, the credit amounts of the financial institutions declined significantly that hindered the industrial scenario of the nation of Mongolia (Reeves, 2010). This is mainly because; as the financial institutions declined their credit amounts, the investors reduced their investment motives that hampered the economic stability of the nation. As a result of which the gross domestic product (GDP) and gross national product (GNP) reduced thereby hindering the image and position of the nation of Mongolia in the globe among many other neighboring nations. Moreover, due to decline in the amounts of the credits of the financial institutions, many institutions stopped their operations and declared bankrupt. Therefore, it might be stated from the above mentioned points that due to economic turmoil, the prices of the products increased and the profit margin declined. Due to which the economy of Mongolia reaches at its lowest point or trough time in the entire globe. Along with this, due to unstable economic conditions, the level of crimes increased that violated the peace of the nation of Mongolia to a significant extent among others (Catalogue.pearsoned.co.uk , 2014). Thus, due to these underlining causes, the political condition of the nation declined thereby amplifying the risk or chances of World War II. Conclusion Conclusively, it might be stated that due to economic turmoil and financial distress, the political risks within the nation of Mongolia enhanced. Due to which, the level of confidence and morality of the business individual declined due to financial un-stability. As a result of which, the range of business dealings within the nation of Mongolia reduced thereby hindering its prosperity to a significant extent. These factors joined together and disturbed the political scenario of the nation of Mongolia among its other neighboring nations. As a result of which, the peace of the nation became disturbed that hindered the living standard of the citizens. Along with this, the maintenance of the daily life gets distressed, giving rise to chaos. References Catalogue.pearsoned.co.uk (2014). Political Ideologies of the interwar Years. Retrieved from: http://catalogue.pearsoned.co.uk/assets/hip/gb/hip_gb_pearsonhighered/samplechapter/0136032532.pdf. Reeves, J. (2010). Mongolian State Weakness, Foreign Policy, and dependency on the people’s Republic of china. Retrieved from: http://etheses.lse.ac.uk/287/1/Reeves_Mongolian%20State%20Weakness%20Foreign%20Policy%20and%20Dependency%20on%20the%20Peoples%20Republic%20of%20China.pdf. Murray, W. R. & Millett, A. R. (1998). Military Innovation in the Interwar Period. London: Sage. Milet, A. R. (1998). The Interwar Period. London: Routledge. Kasuya, M. (2003). Coping with Crisis: International Financial Institutions in the Interwar Period. New York: Cengage Learning. Read More