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International Market Analysis

Country Outlook Comparison paper: Egypt and India

Margarita Haro Saaib 21704

Tijuana, B.C., March 4, 2016

Country Outlook Comparison Paper: Egypt and India

        Throughout this work, it will be explained different topics about the situation of two countries in terms of politics, economy and operational factors that influence the risk of a country. The two countries selected to compare the risks of two different cultures are Egypt and India. First we will talk about everything involving related to Operational Risk, followed by Market Size and Utilities and finally the Interstate Security Risk.

Operational Risk

The operational risk according to the Egypt Business Forecast Report “On the positive side, Egypt benefits from good international supply chain connections and trade infrastructure, low utilities prices and a government seeking to encourage investment. The country has the largest population in the Arab world, with rising incomes and a high rate of urbanization, and therefore offers an increasingly attractive consumer market”. (Egypt Country Risk Report, 2015, p.29).

On one side is positive the low prices of public services as an advantage for businesses and population. In addition, another positive aspect is tourism in this region, which is a source of high income for the country but not so much for tourists because security is not very good due to the protests and violence.

        “While there are some positives in terms of the breadth of education and low crime rates, there a plethora of risks, including the lack of relevant skill sets within the population, high unemployment and trade barriers. We also highlight risks from a unionized and overregulated workforce, and limited infrastructure development, which will deter foreign investment”. (Egypt Country Risk Report, 2015, p.29).

Security is a big negative aspect because investors do not want to invest their capital or start businesses abroad if the country where they want to position has terrorist threats.

        On the other hand, the positive aspects of Indian are transport network and logistics. “The country has one of the largest road and rail networks in the world, a necessity considering the massive size of the country. With a long coastline and dozens of ports India also offers substantial maritime shipping capacity, complemented by growing air freight capabilities”. (India Country Risk Report, 2015, p.31).

Among other positive aspects also include the low price of electricity and fuel that helps companies reduce their logistics costs, but on the negative aspects, telecommunications have low penetration due to modern ideas have not become part of this system and which in turn it is not considered as necessary because of the low level of education that exists in the country.

Comparing the two countries are similarities as we can see by the low price in public services due to the large amount of population that exists but which in turn is negative for companies for the exploitation of these resources and at the same time causes blackouts or problems for have the services or use them.

All this causes losses and low-income countries, being India one of the poorest.

Market Size and Utilities

“Egypt is the largest non-OPEC oil producer in Africa, with significant domestic oil reserves. The country also has the largest refining capacity in Africa. Nevertheless, fuel imports consistently fail to match the shortfall between demand and domestic production, meaning that shortages are a persistent issue. They most obviously affect road-based supply chains, which grind to a halt when there is no fuel available for freight vehicles. However, they also have an impact on the agricultural industry, which relies on diesel fuel for farming equipment, and on businesses and subsidized bakeries which rely on diesel powered electricity generators and ovens due to the unreliable mains power supply”. (Egypt Country Risk, 2015, p.31).

As explained this point in the report, the lack of fuel affects mainly companies that need this for their machinery to function. This causes as already mentioned above, investors want no part of this economy because of the problems that the service sector has.

        On the other hand, among the positive aspects they are mainly the telecommunications electricity sector it can be considered as emerging because “Egypt continues to lag behind its regional peers in terms of Internet penetration and the availability of fast and reliable connections. However, the large size of the population means there is a relatively wide consumer base with access to the Internet, which is beneficial for e-commerce businesses, and the overall sophistication of the telecommunications sector is growing rapidly”. (Egypt Country Risk, 2015, p.32).

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