Global Business Environment, Management and the Economy

Global Business Environment,

Management and the Economy

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Executive Summary

In Argentina, the rate of poverty and inequality is 10.5%. Through corporate social responsibility, education, and employment growth, firms may be able to address these issues. In Colombia, 20% percent of young adults (15–24) do not have a job. Increasing the options for employment, company ownership, and education might address this problem. The foreign direct investment (foreign direct investment) rate in China varies due to the government's initiatives to enhance the business climate and draw in foreign capital.

Component 1: Position paper on Poverty and Inequality in Argentina

Despite its rich cultural legacy and being one of Latin America's strongest economies, Argentina has a long tradition of suffering from poverty and injustice (Vivares, 2021). Structural and economic obstacles continue to impede progress in the economic and social domains. Inflation, economic instability, and external shocks are the main causes of poverty and inequality, despite government efforts to curb them. This study examines the origins, effects, and potential solutions that businesses might provide for Argentina's poverty and inequality.

Current Situation of Poverty and Inequality

Recent figures indicate that during the duration of the previous five years, Argentina's rates of inequalities and poverty have changed (Pecheniuk et al., 2021). The rate reached 12% in the year 2019 15.4% in the year 2020 11.4% in the year 2021, 10.9% in the year 2022, as well as 10.5% in 2023, which raises concerns. This is likely to be a continuing trend. 10% of Argentines are thought to be living in extreme poverty, with 10.5% of the country's population living below the poverty line (Macrotrends.net, 2024). There is a noticeable wealth gap, as seen by the high Gini coefficient inequality of 0.42.

Argentina now has a higher rate of poverty due to decades of inflation. A greater number of people are becoming impoverished due to inflation exceeding one hundred percent. Real earnings have dropped dramatically. The current economic crisis, typified by escalating debt and a diminishing GDP, has also complicated the government's efforts to establish resilient social safety nets at this period. The perpetuation of inequalities and poverty. is facilitated by the state of the economy, growing living expenses, and a dearth of efficient income assistance initiatives (Palacios, et al., 2020).

Causes of Poverty and Inequality

The persistence of inequality and poverty in Argentina is caused by several causes. One of the main causes of economic downturns, increasing inflation, and currency devaluation is the economy's volatility. There has been a big effect from the differences. The fact that Argentina depends a lot on goods, especially agriculture, makes the country vulnerable to changes in the world market. When product prices are low, there is a recession. During a recession, wages go down, jobs are lost, and poverty rises (Franco Bastias and Barreiro, 2023).

The job market is also crucial. Despite lower earnings, uncertain employment, and no social security benefits, just over a third of Argentina's workforce works in informal businesses. These industries lack social protection, another distinguishing trait. Since informal workers are not entitled to unemployment insurance as well as any other benefits, they are more vulnerable to the effects of economic downturns. They are thus more vulnerable to any possible repercussions (Pereira, et al., 2021).

It's made much more challenging by the differences in educational opportunities. When it comes to educational possibilities, kids from wealthy homes are more likely to achieve academically, whereas kids from low-income families have to face challenges just to go to school. As a consequence, there is less social mobility, which contributes to the persistence of poverty (Féliz and Emilia Millón, 2022).

Furthermore, the government's previous attempts to combat poverty have been ineffective and inconsistent. Assistance along with subsidy programs frequently fails to reach the most vulnerable sections of society. This is often the consequence of poor targeting decisions or inefficiencies in bureaucratic processes. Long-standing political instability as well as corruption have impeded efforts to reduce structural poverty and inequality, even if these advancements have been made over an extended period.

Consequences of Poverty and Inequality

Poverty and inequality in Argentina have serious consequences for the country's economy and society. Poverty exacerbates social discontent, and criminal activity, especially political instability. Over the last few decades, Argentina has seen an increase in protests and strikes, mostly due to the nation's economic problems and inept governance (Delaporte, et al., 2021).

The nation's ability to prosper economically is often hampered by poverty and inequality. Human capital as well as productivity suffer when a sizable section of the population lacks access to quality healthcare, education, and work prospects. It limits the economy's ability to grow and expand.

Role of Businesses in Reducing Poverty and Inequality

Businesses that support inclusive economic development may be able to help Argentina fight poverty and inequality. More labor options might lead to higher wages, more stable employment, and more social safety, especially in formal firms. Businesses may decide to invest in training and education initiatives to provide people with the skills they need to get better jobs and so promote social mobility.

Component 2: Youth Unemployment and Economic Growth of Columbia

Despite its richness of natural resources and reputation for cultural variety, Colombia has been plagued by high rates of young unemployment. The nation's economic development has been very erratic during the past five years, which has affected unemployment, particularly among young people. Understanding the intricacies of Colombia's youthful labor market requires research on the existing state of affairs, the causes of unemployment, the effects on the economy, and the reform strategies being used (Castillo, et al., 2020).

Current Situation of Youth Unemployment in Colombia

Colombia's unemployment rate decreased in 2023 from 10.55 percent to 10.25 percent. It is anticipated that the unemployment rate for young individuals between the ages of 15 and 24 will be 20%, higher than the national average. Even though the economy is strong and growing, young people are finding it difficult to obtain employment (Macrotrends.net, 2024).

The COVID-19 epidemic caused Colombia's economy to decrease by 7.25 percent in 2020; nevertheless, in 2021, the country's economic growth reached a peak of 11.02%. Growth has been good after then, coming in at 7.26 percent as of 2022 and 6.98 percent in 2023. The high proportion of unemployment among young people persists despite the economy's recovery and growth, suggesting that underlying issues within the Labor market have not been addressed (Macrotrends.net, 2024).

Causes of Youth Unemployment

Colombia has a high percentage of young unemployment for several reasons. First of all, young people lack the skills that companies are seeking. In a constantly changing employment market, students seldom acquire the skills and information needed to succeed. Many recent graduates lack fundamental skills, which lowers their employability and lengthens the time it takes to find employment (Khalimane, 2020).

Second, Colombia's employment policies have been impacted by the country's economic volatility. Businesses may not be able to grow or recruit more workers even while the economy is expanding because of things like political unpredictability, security worries, and shifts in international markets. The COVID-19 outbreak, having led to massive layoffs and hampered the company's ability to hire new staff, made these difficulties worse (Palmer, 2021).

In Colombia, there is a large prevalence of informal sector employment, especially among youth. Most teenagers work in jobs that are not formal, meaning they don't get much money or have many prospects to grow in their careers. This approach makes it more difficult for young people to enter the official workforce, which increases poverty and instability.

Consequences of Youth Unemployment

High rates of young unemployment affect the expansion of the economy as well as the stability of society, in addition to specific problems. Since youth are vital for both growth and innovation, youth unemployment has a detrimental effect on productivity. Young people who are unable to find meaningful work underutilize their potential, therefore hurting Colombia's capacity to compete internationally (Shi and Wang, 2022).

Additionally, societal instability may be exacerbated by prolonged unemployment. Young people without work are more prone to feel frustrated and disillusioned, which might turn them into more criminals and engage in illicit activities. This strains public resources and degrades neighborhood quality of life, which impacts people individually as well as in society as a whole (Axe, et al., 2020).

Furthermore, there are significant beneficial effects on the economy. Youth unemployment reduces consumer spending as well as overall demand seeking goods and services, and this turn slows down the expansion of the economy. This might make companies reluctant to make investments or recruit new employees, which would worsen the unemployment rate.

Recommendations for Addressing Youth Unemployment

To address youth unemployment effectively, the multi-faceted approaches which are essential:

1. To start, to meet the demands of the labor market, education must be improved. The integration of apprenticeships as well as vocational education within the academic curriculum gives students the chance to gain real-world experience and practical skills before starting their careers (Aladejebi Olufemi, 2020).

2. A second thing to think about is the fact that the government needs to do something to encourage companies to recruit youth. One instance of this could involve offering tax breaks to companies that provide young people with entry-level jobs or internships.

3. Improving access to employment information is necessary. Many young people may not know about the services that are available for career development and job hunting. Career counseling, job fairs, and internet platforms that link youth with companies are a few possible remedies for this issue (Bauer et al., 2021).

4. Finally, encouraging young people to become entrepreneurs may contribute to a reduction in unemployment. The public and commercial sectors may provide young people with startup subsidies, microloans, or training to help them launch their enterprises.

Component 3: Foreign Direct Investment (FDI) and Country Attractiveness of China

Foreign Direct Investment (FDI) is essential to driving economic growth and development in the continually changing global economy. According to foreign direct investment, China's economy, one of the largest in the world, keeps growing. The nation's foreign direct investment (FDI) rate has changed as a percentage of GDP during the last five years, suggesting that the process of drawing in foreign capital is not without its chances and difficulties (Haudi, Wijoyo, and Cahyono, 2020.).

Current FDI Situation

From 1% of GDP in 2022 to 1.2% of GDP in 2023, foreign direct investment (foreign direct investment (FD) increased. With estimates of 1.93% during 2021, 1.72%-year 2020, as well as 1.31% in 2019, FDI rates tend to be erratic. China's economy continues to draw investment from other nations despite the country's internal and international economic instability (Macrotrends.net, 2024).

Manufacturing receives the most foreign direct investment (FDI), followed by technology and renewable energy. Numerous business changes have been announced by the Chinese government, with a focus on fostering the development of creative and high-tech enterprises. The economy will shift from being dependent upon manufacturing to being built around technology and services to accomplish this aim (Ullah et al., 2020).

Promotion of FDI

China has put in place a variety of measures to promote foreign direct investment. The most important thing is that the country's business practices stay simple. Due to changes, red tape is being cut down, regulations are now clearer, and routine tasks are easier to carry out. The goal of these projects is to render the market friendlier to business so that it can bring in foreign investors who have had trouble getting such investments before (Crescenzi, et al., 2021).

China has been trying to make free trade and business deals happen so that it can reach more people. The Belt and Road Initiative, better known as the BRI, is a way for China to spend and link up with the rest of the world. China could attract investors from all over the world and improve its place in the world's politics by funding construction endeavors in the Americas, Africa, Asia, and Europe (Wang et al., 2020).

The Chinese government's plan for attracting foreign direct investment depends on new ideas as well as better laws. Foreign companies can put money into research and development in high-tech zones along with innovation hubs that are backed by the government. The goal of these programs is to find companies that can share information and work together to create technology that can help China's economy grow.

Constraints on FDI

China still has a lot of problems when it comes to foreign direct investment (FDI), even though these great things have happened. Even though things have gotten better, the regulation system is still hard to understand and makes life harder in many ways. It's possible that intellectual property and following the rules would be hard for foreign businesses. People may not want to invest in these parts because they think they are risky (Ding et al., 2021).

International trade disputes and regional battles, especially with big countries like the US, have made things less certain. Trade barriers, like taxes and other limits, may make people from other countries less likely to invest in China. There have been discussions around the world about investment growth and supply networks, which have made international investors rethink their plans.

Because of the COVID-19 spread, both local and foreign interests have been hurt. Despite China's quick recovery, investor confidence is still impacted by the epidemic. The health issue has caused changes in investing patterns, with some investors turning their attention from China to developing nations.

Suggestions for Improving the Investment Climate

To enhance its attractiveness as an FDI destination, China must focus on several strategic areas.

1. Simplifying administrative processes and increasing transparency in the regulatory process is the first step. By making legislation more transparent and foreseeable, the Chinese government may be able to win over international investors.

2. Second, the integrity of global trade depends critically on the safeguarding of intellectual property rights. Investors need to be confident that their inventions and ideas will be protected. If clear rules are developed and IP enforcement is strengthened, risks associated with investing in China could be mitigated.

3. Thirdly, commercial discussions and diplomacy can stabilize investment and geopolitical problems. Having close ties to other countries might be beneficial in assuring foreign investors and increasing investment during periods of rising protectionism (He et al., 2021).

4. Fourth, China should prioritize international trends like environmentally friendly technology and sustainable growth. Leading in these sectors will provide China the opportunity to attract innovative and sustainable foreign investment and boost long-term economic development.

5. Finally, it's critical to develop business relationships with partners abroad. Using frequent conferences, dialogues, and collaboration with global enterprises, the government may perhaps enhance its comprehension of investor concerns and anticipations, therefore modifying its protocols and guidelines correspondingly.

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