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BBNG3103 INTERNATIONAL BUSINESS

1.0 Introduction
This International Business assignment helps the learners in abundance of ways to ensure that they are well
verse with the need of economic factors which is known as one of the key element in the success for the
development of a country. Business is defined as a work relating to the production, buying, and selling of goods
or services as in Collins Cobuild Dictionary (2017). Business are done both locally as well as internationally.
Local business is referred to a locally-owned business, which can be described as a franchise or corporate
branch operating within a local area. This type of business will give prosperity to the people of the particular
country as the money paid to local governments by small, local businesses is used to elevate the infrastructures
(Candace Webb, 2018). On the other hand, international business, defined as commercial transactions that occur
across country borders. There are numerous advantages gained by a country by performing an international
business such as strengthen the international growth of a company by allowing their brands and businesses an
opportunity to achieve sustained revenues in the outside world. (Drane, 2015). As per in the need of this
assignment, the evaluation should be done in the aspect on the importance of political and economic risks in
international business

Introduction to the Chosen ASEAN Country 2.1 ASEAN

Association of Southeast Asian Nations (ASEAN) consists of the unity of 10 countries under the motto of "One
Vision, One Identity, One Community". There are 10 members of this ASEAN Community, which consists of
Indonesia, Thailand, Malaysia, Singapore, Philippines, Vietnam, Myanmar, Cambodia, Laos and Brunei
(Acharya, 2009). There are numerous benefits for the formation of ASEAN community, as in firstly, it aims to
promote collaboration and co-operation among member states, as well as to advance the interests of the region
as a whole, including economic and trade growth (Bremmer, Keat, 2009).The combination of their strengths and
different powers of trades will ensure the prosperity of the ASEAN community. Besides that,
 
ASEAN also promotes peace and stability in the region. Members have signed a treaty pledging to not have
nuclear weapons, and most have agreed to a counter-terrorism pact which includes sharing intelligence and
easing the extradition process of terror suspects (BBC, 2014). This can ensure the peace and tranquillity among
these ten members of the community will be always preserved and protected not only by the leaders but also by
the citizens of each country.

2.1 Cambodia
This is one of the country been listed under the community of ASEAN apart from the ten other countries.
Cambodia is also known famously as Kingdom of Cambodia with a population of over 15 million of people.
With 95 percent of the population practising Theravada Buddhism, it is declared as the official religion of the
country. More details on the creation of the name, demography and geographical location of the country will be
explained in delineate below:

2.1.1 Name of Cambodia

Cambodia is known as the Kingdom of Cambodia in English in Khmer as Kampuchea which was derived from
the Sanskrit word Kambuja or "Golden Land" or "Land of Peace and Prosperity". And the country lives up to
the word as it is known as a wonderful country with immense tranquillity alongside the beauty of the mother
nature (Rickken, 2008).

2.1.2 Demography
Cambodia’s first national census as an independent country, taken in 1962,
reported a population of about 5,700,000 (Encyclopaedia Britannica, 2016). Now with the current data updated
until the mid-year of 2018, there are almost 16,245,729 of people (Hays, 2018). In these 56 years, the elevation
of the population was steady despite the sometimes fall and rise of the economic (Levy, 2013). Based on the
United National Reports (2017), the median age been recorded among the citizens
are 24 years’ old which shows that the majority population is dictated by the young
and energetic adults. There are three main ethnic groups in Cambodia, known as Khmer 13,684,985 whom had
hold 90 % of the whole population of the country, Vietnamese with 760,277 of people whom had merged with 5
% of the population and Chinese ethnic managed to hold 1 % of the population with 152,055 meanwhile the
balance 4 % are filled up with the other mixed ethnic groups. With these different ethnic groups, they remained
the official language of the nation to be Khmer as Khmer people are the majority of the country. There are also
three main religions been practised by the people with the majority of the people, 95 % practising Buddhism,
1.6% practising Islamic and the remaining 0.6 % are practising Christianity as well as some other religions. The
language of education are English and French in which Cambodia falls
into the second circle of Kachru’s World English, which means that they are learning
English as Second Language as in Malaysia. But 3% of the population which is equals to 423,000 are French
speakers (2014)

Geographical Location
Geographical location of a country refers to a position on the Earth, with regards to latitude and longitudinal
coordinates. Cambodia is a country with amazing breath-taking views and sceneries, with 181,035 square
kilometres in area (Bahree, 2014). The uneven Earth structure in Cambodia been proven by the Tonle Sap
Basin-Mekong Lowlands region consists mainly of plains with elevations generally of less than 100 meters and
on the other hand, the Cardamom Mountains in the southwest rise to more than 1,500 meters and is oriented
generally in a northwest-southeast direction. The highest mountain in Cambodia
 –
Phnom Aural, at 1.771meters
 –
 is in the eastern part of this range (Standard Time, 2015). This high point and low point in the part of the same
nation shows how diversity the geographical structure of the country is. And this diversity is proved to be more
as a strength to the people rather to be weakness, this is because, the low part of Cambodia, where the rivers are
situated dominates the hydrology of the country. The section of Mekong River passing through Cambodia lies
within the topical wet and dry zone (2015), which gives hand to the people during both the wet and dry seasons.
The beauty of its nature attract abundance of tourists to visit Cambodia each year which indirectly elevates their
tourism prospect.Cambodia's climate, like that of much of the rest of mainland Southeast Asia is dominated by
monsoons, which are known as tropical wet and dry because of the distinctly marked seasonal differences (The
World Factbook, 2015). The correct climate aided the plantation and agriculture sector of the nation which is
one of the most vital economic resource of Cambodia. Besides, deep rivers and high peak mountains, Cambodia
is also
 
naturally bestowed with dense jungles. Cambodia has one of the highest levels of
forest cover in the region as the interdependence of Cambodia’s geography and
hydrology makes it rich in natural resources and biological diversity - among the bio-richest countries in
Southeast Asia (Mom, 2014).
3.0 Types of Political Risk in Cambodia
Political risk is known as the risk that political decisions or events in a country negatively affect the profitability
or sustainability of an investment. Political risk is the chance that political decisions, events or conditions in a
country will affect the business environment in ways that may adversely affect the business (Milan, 2009).
There are few reasons from the political side that could risk the economy of a nation, such as government
actions, civil disorder, and also change in political ideology. These reasons could act up as the threat for the
international companies to sustain their business opportunity in a certain country. In the aspect of Cambodia as
the chosen ASEAN country to conduct a business over there, these factors can be
linked with the country’s current situation and to be evaluated regarding the factors based on the nation’s
ambience.
3.1 Government Actions
The Cambodia government had set up The Cambodia International Business Summit which offers a direct entry
into the Cambodian business sectors. This summit created by the Cambodian government make the relevant
decision makers in governance and business, and they have not only opened that too ASEAN countries but also
for the world business too (Marshall, 2013). Cambodia government had looked into the importance of business
in different segments which focuses on key
areas of the country’s economic tra
nsformation of the 21st century as in hospitality, food and beverage, education, manufacturing, ICT and also
agriculture. But the government had their tactics in which there are a few restrictions on foreign investment and
shareholders. Foreign investors cannot own land in Cambodia, but there are some options for them to enjoy
control over land, for example through a land-holding company (Hem &Chankoulika, 2015). Foreign investors
are also prohibited to do a certain types of business in Cambodia, for example in production of poisonous
chemicals, production of electric power and also forestry exploitation.
 
 
3.2 Civil Disorder
Civil disorder is a broad term that is typically used by law enforcement to describe unrest caused by a group of
people (Kelly, 2011). Cambodia had been top
listed for the nation’s turbulent due to their political crisis
. Cambodian citizens are sensitive to political risks as Hun Sen their prime minister has warned that there may
not be a peaceful transfer of power should his CPP lose in 2018. This had shown how fancy he is to the position
and power he is holding in the nation. The people of Cambodia had created the civil disorder in the country due
to
Hun Sen’s and his government’s irresponsible acts, as such
for leasing 45% of the total landmass in Cambodia, threatening more than 150,000 Cambodians with eviction
(David Hutt, 2017).Parts of the concessions are protected wildlife areas or national parksand the land sales have
been perceived by observers as government corruption. Already thousands of citizens have fallen victims of
forced evictions and this thoughtless act of the leader of a country had crashed the
citizens’
 faith on his leadership. Furthermore, Hun Sen was implicated in corruption related to Cambodia's oil wealth
and mineral resources in the Global Witness 2009 report on Cambodia. He and his close associates were
accused of carrying out secret negotiations with interested private parties, taking money to exploit the country's
resources in return (Neou, 2013). And to make the tiny remaining hope of the people repressed,
Hun Sen’s
party has placed bans on public gatherings, driven opposition supporters from the site of former protest
meetings 'Freedom Park', and deployed riot police to beat protesters and detain union leaders which had caused
countless citizens to be harmed.