There are bad people...

Rick Politician 873454/2/2007 I BUS 300 Chapter 2 Homework a. 2000 GDP per capita (PPP$) $7,625 Life expectancy index , 2000 0.71 Life expectancy at birth (years), 1970-75 59.5years Life expectancy at birth (years), 1995-2000 67.2years Adult literacy rate (% age 15 and above), 2000 85.2% Total population (millions), 1975 108.1mil Total population (millions), 2000 170.4mil Total population (millions), 2015 201.4mil Population under age 15 (as % of total), 2000 28.8% Population under age 15 (as % of total), 2015 24.3% Population under age 15, 2000 (170.4mil x 0.288=49.0752mil) 49.0753mil Population under age 15, 2015 (201.4mil x 0.243=48.9402mil) 48.9402mil Human development index (HDI) value, 2000 0.757 Country Poorest 10% Poorest 20% Richest 20% Richest 10% Gini index Brazil 0.7 2.2 64.1 48.0 60.7 U.S. 1.8 5.2 46.4 30.5 40.8 Wealth is divided more evenly in the U.S. than in Brazil. It seems that in the U.S. the balance of wealth is spread somewhat what more between the richest 20% and middle income 60% than in Brazil. Also, almost 20% more of wealth in the U.S. (64.1- 46.4) is the hands of the poorest 80% of the population than in Brazil. Furthermore, Brazil's poorest 20% have less than half of much wealth when compared with Brazil's rich, than in the poorest 20% in the U.S compared with the American rich.( 2.2 x 2 < 5.2) The Gini index measures the inequality of consumption and income in a country. This means the Gini shows how well wealth is distributed amongst the population. The Gini show whether most of the money in a country is in the hands of the rich or in the hands of the middle class. A 100 represents perfects inequality, and a 0 represents perfect equality. When comparing the U.S. and Brazil, the Gini index shows that the wealth is distributed less evenly in Brazil than in the U.S. This leads me to believe that Brazil probably has a smaller middle class than the U.S. b. From the textbook, I learned there are main types of risks for entering to a country to do business. Political risk reflects the chance the instability of the target government will worsen the government's negative impact on potential foreign projects in that country. Economic risk addresses whether a country will do a good job managing its economy and how that management will affect the potential projects. Lastly, legal risk refers to the chance that a company's legal rights and property within that country will be upheld. Political Risk According to Euromoney, Russia has a political risk of 11.74 and 17.53 is political risk of the Czech Republic. The Czech government is more stable, and thus less risky. Economic Risk The Czech Republic has an economic risk of 10.47, which is much better than Russia's 8.26 economic risk. The economy in the Czech Republic is currently doing better and economists expect them to better in the future as well. Legal Risk Currently the Russian bureaucracy is flooded with corruption. Contracts and intellectual property rights are not being upheld. For instance, the Russian Ministry of Agriculture took over SPI International, seizing its assets and the Stoli Vodka trademark and trademarks such as Stoli Vodka. This happened even though Russian courts ruled that the Ministry of Agriculture could not legally do what it did. Debt and Financial Risk In every other financial risk category except one, the Czech Republic scored above Russia. For a total score, the Czech Republic's 65.64% of total possible points was much higher than Russia 45.03% of total points. I would definitely agree with the Euromoney results. Looking at the political, economic and legal risk, I would the Czech Republic would be a safer and better country to invest in due to its lower risk.