A PAPER ON NATIONAL DIFFERENCES BETWEEN A DEVELOPED COUNTRY,

DEVELOPING COUNTRY AND UNDERDEVELOPED COUNTRY: JAPAN,

PHILIPPINES AND CENTRAL AFRICAN REPUBLIC

Summer 2020 - 2021

Chapter I. Japan

Section I. Political System

After the World War II, the Japanese government drafted the Japan Constitution that

became the basis for the current Japanese political system. The Japan Constitution of 1946

firmly established democracy with constitutional monarchy and parliamentary system of

government based on the separation of powers. The Imperial family, headed by Emperor, does

not hold political functions but are maintained as honorary figurehead of the state and

symbolizes the unity of the people. Further the Emperor, the current one being his Majesty

emperor Nahurito, performs ceremonial duties and play a relevant diplomatic role. The Japanese

parliament, the highest authority in the state, is led by Prime Minister Suga Yoshihide who is

also the leader of the Liberal-Democratic Party. He was nominated through a Diet resolution

followed by the appointment by the Emperor. The Prime Minister’s office administers the

Cabinet, which is comprised of the Cabinet Ministers and Cabinet State Ministers who are

selected by the Prime Minister. The Prime Minister, together with the Cabinet Office, Cabinet

Agencies and the Ministries of Japan, comprises the Executive branch of the Japanese

government. The National Diet is Japan’s legislature that is responsible for the preparation of

legislation and regulations of the state. The legislative branch of Japan operates in bicameral

parliament system. The two chambers of the Diet are the House of Representatives and the

House of Councilors both comprised members elected by the public. The lower house or the

House of Representatives is composed of 475 members with 4-year term length. On the other

hand, the upper house or the House of Councilors have 242 members with the half of the house

members being elected once every three years for a 6-year term. The Supreme Court, and the

four other lower courts; the High Courts, District Courts, Family Courts and Summary Courts,
consist the Judicial branch of the Japanese government. The judicial branch is independent from

that of the executive and legislative branch also the Supreme Court ruled on 1989 that it does

not have judicial power over the Emperor. The chief justice of the Supreme Court is appointed

by Cabinet nomination and like the Prime Minister, he is officially appointed by the Emperor.

Chief Justice is Itsuro Terada, who was made Chief Justice in April 2014, together with the

other 14 justices appointed by the Cabinet comprises the current positions in the Supreme Court.

Section II. Economic System

During the latest data from The Heritage Foundation Annual Economic Freedom Index,

Japan scored an economic freedom of 74.1, making its market economy the 23rd freest in the 2021

Index. Further, this economic system helped Japan to become one of the largest and most

developed economies in the world. The country’s recent economic reforms and trade liberalization

aims to make the economy more open and flexible. Moreover, former Prime Minister Shinzo Abe’s

“Abenomics” has been effective in boosting equity markets and nurturing the sense of stability of

many large firms. But these set of policies primarily objectives are to increase the country’s money

supply through government spending and undertakes economic and regulatory reforms to become

more competitive in the global market. Although the extent of direct state participation in

economic activities is limited, the government has stronger control and more pervasive influence

over its business industry than most other countries with market economies. According to data

from The Observatory of Economic Complexities, as of May 2021, Japan’s top export products

include cars (¥654B), certain commodities (¥443B), vehicle parts (¥275B), Integrated Circuits

(¥253B), and machines and certain apparatus (¥226B). Between May 2020 and May 2021, Japan’s

exports have increase by 49.6% or from ¥4.19T to ¥6.26T. Japan exported mostly to China

(¥1.39T), United States (¥1.1T), Taiwan (¥452B), South Korea (¥390B), Hong Kong (¥320B). In
addition, the country primarily imports crude petroleum (¥431B), petroleum gas (¥282B),

blood,antisera,vaccines,toxins, and cultures (¥230B), telephones (¥224B), and integrated circuits

(¥202B). Japan mostly imported from China (¥1.58T), United States (¥744B), Australia (¥402B),

South Korea (¥271B), and Taiwan (¥271B). The data from World Bank showed that Japan ranked

3rd in all countries all over the world in terms of nominal Gross Domestic Product at current U.S.

Dollar Exchange Rates.

Section III. Legal System

Following the model of 19th century European legal systems, the modern Japan legal

system us based on the civil law system especially on the legal codes of Germany and France.

According to Louisiana State University Law Center, “Civil Law Systems, also called continental

or Romano-Germanic legal systems, are based on concepts, categories, and rules derived from

Roman law, with some influence of canon law, sometimes largely supplemented or modified by

local custom or culture.” There is a significant American influence in major legal reforms of Japan,

additionally, both civil law concepts and more recent common law influences are effected by

traditional Japanese values. As introduced in Chapter 1 The Political System of Japan, the Japanese

Judicial System and Judicial Proceedings have five types of courts; the Supreme Court, High

Courts, District Courts, Family Courts, and Summary Courts. All these courts are incorporated

into a unitary national judicial system. Japan also adopts a three-tiered system, the first instance

will be a summary, family, or district court depending on the nature of the matter. Currently, there

are 438 Summary Courts throughout Japan, all cases of court is presided over by a single Summary

Court judge. In principle, summary courts handle civil lawsuits involving claims within a 1.4

million thresholds, civil conciliation and demands for payment cases, criminal cases related to

minor offenses. Family Courts and District Courts are located in the same places as well as their
respective branch offices. The differences lie on the type of cases each court handles. Family

Courts handle personal status lawsuits, adjudications and conciliations for family affairs cases and

most notably adjudications for juvenile cases. Juvenile cases are handled by a single or a three-

judge panel. District Courts, on the other hand, handle the first instance of most types of civil,

criminal, and administrative cases. Most of District Courts cases are settled by a single judge,

however, certain cases involving possible grave sentences should be handled by a three-judge

panel. There are eight High Courts located in eight major cities of Japan: Tokyo, Osaka, Nagoya,

Hiroshima, Fukuoka, Sendai, Sapporo and Takamatsu. High Courts handle Koso appeals, these

are appeals filed against a final judgment in the first instance rendered by lower courts; Summary,

Family, and District Courts as provided by law. Moreover, a special separate branch of the Tokyo

High Court, the Intellectual Property High Court, specializes in Intellectual Property cases. Each

High Court consist of a president and other High Court judges, its cases are ordinarily heard by a

panel of three judges however, insurrection cases are handled by a five-judge panel. And lastly the

highest and final court, the Supreme Court, has appellate jurisdiction over final appeals and appeals

against rulings specially provided for in codes of procedures as provided by law. The Supreme

Court is located in Tokyo and is consists of a Chief Justice and fourteen Justices, with a Grand

Bench consisting of all Justices and a Petit Benches, each with five Justices. On another note, the

Japanese Attorney System is defined by the Attorney Act that states the mission of attorneys as

“protecting fundamental human rights and ensuring social justice. In order to become an attorney

in Japan, one must complete a law school curriculum, pass the bar examinations, and complete an

apprenticeship, in which they need to pass the final examination at the Legal Training and Research

Institute of the Supreme Court. In conclusion, like most legal system around the world, Japan’s

Judicial System is tough but fair. Professor Bruce Aronson, formerly with Hitotsubashi University
and now with the United States Asia Law Institute at New York University, has written in an article

saying, “it is hard to call Japan’s system a ‘failure’ when Japan has among the lowest rates of

crime, incarceration and gun ownership in the world.”

Section IV. Factors that Make the Country Ideal for International Business

The 378,000 square kilometers Land of the Rising Sun, Japan, has an enormous footprint

in the trade and business world. Japan is the third, following United States and China, largest

economy and the most complex in the world. Because of Japan’s global competitiveness, the

country became a target for international businesses. This paper will discuss three of the many

factors why this country is ideal for international businesses. The first and probably the most

notable is that Japan is an innovation powerhouse. In the world of advance technology, Japan

is tops all countries all over the world. Accordingly, Japan is the Mecca of Technology, it is an

important country especially for Research and Development. Some of global technology

evolutions that started in Japan are: Docomo’s i-Mode, started on February 22, 1999, the

world’s first mobile internet service provider; first country to use mobile payments and

electronic money; and the invention of GaN LEDs by Shuji Nakamura, et al. Japan’s Society

5.0 driven by emerging technology provides dynamic business opportunities. Society 5.0 is “a

super-smart society promoted by the government of Japan, is creating growth potential for

businesses in emerging growth sectors including robotics, AI, and IoT. Recognized as the

world’s second largest of patents in force, Japan is providing international business with new

value creation opportunities in Research and Development capabilities and Intellectual Property

Assets. Secondly, Japan is the gateway to Asian Market with its stable, trustworthy, and easily

accessible quality business environment. With Japan’s recent economic reforms, the country is

continuously working to harmonize rules and regulations across borders through signing
multilateral free trade agreements. Moreover, Japan’s modernization with its domestic transport

system, represented by high speed rail network, already boast an established based for the

international companies. And most particularly, Japan’s location is ideal to make business to

the rest of the Asia-Pacific region. Flights from the country to the surrounding major cities such

as Beijing, Shanghai, Singapore, Hong Kong, Bangkok, Sydney are short, accessible, and are

often available all throughout the day making it easier for business trips. And lastly, the

existence of a very lucrative market makes Japan an attractive country for international

business. Home to more than 126 million sophisticated, affluent, and highly educated

individuals, Japan offers a large and broad-based consumer based that place high value on

quality. Japan has the highest level of household expenditure among all developed nations

illustrating how Japan can act as valuable testing grounds for new products. Lars Petersson,

President and CEO of IKEA Japan stated, “Japanese consumers are very well educated, so they

understand the difference between a product that’s high performance and low-cost, rather than

the opposite.” In addition, a data from the Ministry of Finance of the Japanese government

showed that corporations have hit record high earnings of over $777 billion in 2018. Aside from

high profiled consumers, its workforce is also the same. With over 700 universities, Japan value

education the most that the country ranked among countries with the best education system.

Aside from having a strong pool of highly skilled, expert, and knowledgeable employees,

Japan’s workforce have a very strong work ethic due to its predominantly collective society. Its

employees value loyalty and cooperation, and their willingness to work long shifts to

demonstrate their dedication at work. In conclusion, Japan is a great place for international

business to dominate the Asian market especially that the Asian continent is home to a lot of

consumers.
Section V. Factors that Make the Country Not Ideal for International Business

Japan is a great place for international businesses to expand their operations but there

are certain factors that makes this country not ideal for international businesses, three of these

are government’s regulations on foreign companies, cultural and language barrier, and very

well established local companies. Over the years, Japan has been active recently in negotiating

and signing free trade agreements for a more ease business operations, it takes a lot of time to

finish all the legal documents to official operate in the country. The country has strict legal and

immigration rules and even getting an entrepreneur visa or a business manager visa is a long

and arduous process. On the other hand, while tariff on import goods have a percentage rate is

2.3 in trade-weighted average, the country has more or less 393 nontariff measures in effect that

could delay operations in the country. The government has stricter regulations on foreign

investment in some sectors. Moreover, many businessmen regard Japan’s bureaucracy as

traumatic. All documents must be specific and in order. Nevertheless, with future trade

agreements and negotiations, Japan will most likely alleviate some restrictions to attract more

international companies. Another factor that makes the country not ideal for international

business is the cultural and language barrier. Japan was never colonized by Western countries

largely due to the Japanese strong will and traditional abilities which is why they value their

customs to high extent. For international businesses to successfully enter the Japanese market

they must study and learn Japan’s business etiquette. There are a lot of business etiquette in

Japan but you only have to keep few in mind. One is that a business must build a strong

relationship with the Japanese businessmen. Because of Japan and mostly all of Asian’s views,

Japan values group than the individual, and it is important for Japanese people to show the right

level of respect and to be polite and diplomatic at all times. Japanese people value teamwork
and loyalty in the workplace rather than competition between their co-employees. Therefore, it

is important for foreign businessmen to visit the country often to cultivate contacts and to better

understand business conditions in the country. On that note, part of the cultural barrier is the

language. Japanese are very slow to adapt with globalization even if the country is in fact a very

advance in technology. Because of this, Japanese people in general do not use and speak and

learn English. Less than 3% - 5% of the overall population of the country only speaks good

English. Moreover, aside from the long paperwork to officially enter the Japanese market,

everything on the document is in Japanese which is why you have to master the language to

easily navigate Japan’s business market. Although, some Japanese companies are slowly

breaking this barrier, it would definitely take a long time for Japan to be completely globalize

and that it why it is important for international business to atleast learn N1 level of Japanese.

And lastly, Japan’s well established local companies makes this country not ideal for

international business. Some of Japan’s largest domestic financial conglomerates, known as

Keiretsu, dominated the industry even with strong foreign counterparts. Moreover, Japanese

customers are very specific and demanding and have different tastes, preferences, and needs

than western customers. Which is why most of the Japanese people prefer Japanese local brands

because they understand and know the Japanese market better. There are many cases when

western companies must redesign or redevelop products to fulfill Japanese customers. Japanese

also do not usually welcome new competitor, but will develop strategies to compete against

new business, especially a foreign one. It is important for international business to be prepared

with market strategy to win in the country’s market. Some of the companies that tried to enter

but failed in the competitive Japanese market are eBay, Vodafone, London Stock Exchange

AIM Market, Volkswagen investment and partnership with Suzuki Motors, among others.
Section VI. Relevant pictures

Nisshōki “flag
“Paulownia Seal”, the
of sun”, the
Government Seal of
official term for
Japan
the national flag

Prime Minister
Yoshihide Suga
99th prime minister
of Japan

Emperor Naruhito
126th emperor of Japan

Kōkyo Teikoku Kokkai Gijidō

the Tokyo Imperial Palace the Imperial Diet Building of the
Parliament

Supreme Court
Justice Naoto
Ōtani
Chief Justice of
Japan
Saikō Saibansho
the Supreme Court of Japan
 Chrysanthemums Koi Fish: The Japanese Carp
Japan’s national flower national fish of Japan

Mount Fuji Sakura

famous landmark in Japan the Japanese cherry blossom trees

Tokyo
the
capital of
Japan

Tokyo Tower
landmark in Tokyo, Japan

Japanese
Yen
Japan’s
banknotes
and coins
Latest Technological Innovation
in Japan

Kimono Design
over the Centuries
Japan’s traditional
dress
Chapter II. Philippines

Section I. Political System

The Philippine political system is established by the 1987 Constitution in a form of

presidential, representative, and democratic republic framework. The powers of the government

revolve around three separate and sovereign branches: the executive, legislative, and judicial

branch. This system of check and balance seeks to act in the best interest of the public. The

Executive branch of the government carries out and enforces the law. This branch of the

government is under the leadership of the president. The president functions as both the head

of the state and the head of government, he is also the commander-in-chief of the Armed Forces

of the Philippines. The president, the current being President Rodrigo Duterte, is elected by

popular vote to a term of six years. The Malacañang Palace is the where the executive seat of the

government is administered and is also the official residence of the President. The second highest

official, the vice-president, is likewise elected through popular vote for a six-year term. The vice-

president supports the president and the first in line to succession should the president can no

longer continue to serve office. The current vice-president of the Republic of the Philippines is

Madam Vice-President Leni Robredo. The other officials of the Executive branch include the

Cabinet, executive department, independent agencies, boards, commissions, and committees. The

Constitution grants the President authority to appoint the Cabinet members but they must be

confirmed by the Commission of Appointments, they also serve as advisors to the President. These

departments form a large portion of the country’s bureaucracy. The legislative branch enacts

legislation by making, altering, and repealing laws, confirms or rejects presidential appointments,

and has the authority to declare war. This power of the government is vested in the Philippine

Congress which is divided into two chambers, the Senate and the House of Representative. The
upper chamber or the Senate is located in Pasay City, while the lower chamber or the House of

Representatives is located in Quezon City. The Constitution affirms that the Senate shall be

composed of 24 senate members who shall be elected at large through popular vote and shall serve

for no more than two consecutive 6-year terms. The Senate shall elect it President by a majority

vote of all its respective members, the current Senate President of the 18th Congress of the

Philippines is the Honorable Vicente Sotto III. The House of Representatives, on the other, is

composed of 250 elected members from the different legislative districts in the provinces, cities,

and municipalities. Twenty percent of the 250 House Representatives are elected in proportion of

party representation through party-list system of registered national, regional, and sectoral parties

or organization. The Constitution ruled that members of the lower chamber shall hold office for

no more than three consecutive 3-year terms. The House of Representatives shall likewise elect

their House Speaker through majority vote of all its respective house members. The current speaker

of the House of Representatives in the Republic of the Philippines is the Honorable Lord Allan

Velasco. Duties of the courts of justice are vested in the Judiciary branch of the government.

Judicial powers include settlement of actual controversies involving rights which are legally

demandable and enforceable, and determine whether or not there has been a grave abuse of

discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality

of the Government. The Constitution of the Philippines expressly grants the Judiciary fiscal

autonomy. The judicial power of the government is made up of a Supreme Court and lower courts:

lower collegiate courts, regular courts, and Muslim courts created by law. The Supreme Court was

granted by the Constitution the power of Judicial Review as the power to declare a treaty,

international or executive agreement, law, presidential decree, proclamation, order, instruction,

ordinance or regulation unconstitutional. According to the Constitution, the Supreme Court shall
compose of a Chief Justice and 14 Associate Justices, all are constitutionally appointed by the

president from the list of nominees presented by the Judicial and Bar Council. The 27th and current

Chief Justice of the Supreme Court of the Philippines is Chief Justice Alexander G. Gesmundo.

Article VIII Section 11 of the 1989 Constitution states that, “the members of the Supreme Court

and judges of lower courts shall hold office during good behavior until they reached the age of

seventy years or become incapacitated to discharge the duties of their office.”

Section II. Economic System

The Philippine economy system, like most emerging market economies, has become

increasingly integrated with the world economy. According to a paper published by Michigan State

University’s Broad College of Business, the Philippines has a mixed economy system with variety

of private freedom, combined with centralized economic planning and government regulation. The

Philippines is a member country of different associations that aim on economic growth like the

Asia-Pacific Economic Cooperation (APEC) and the Association of Southeast Asian Nations

(ASEAN). For the past years, the country has shown promising economic improvement, evidenced

by a decline in poverty rates and its Gini coefficient. But due to the onset of the COVID-19, the

country’s growth prospect during the year 2020 seemed to dim. Nonetheless, the World Bank

added that just like other nations, the country’s economic growth is expected to rebound gradually

in 2021-2022 assuming a containment of the virus. The Observatory of Economic Complexities

latest data show that the Philippine’s imports are greater than its exports resulting in a trade deficit.

The preliminary report from the Philippine Statistics Office on May 2021 accounted that the

country’s current top exports products are ignition wiring set and wiring sets used in vehicles,

airships, and ships (consists only of electrical wiring harness for motor vehicles), metal

components (excluding brakes servo-brakes), cathodes and sections of cathodes, of refined copper,
electronic equipment and parts, other manufactured goods, chemicals, coconut oil including crude

and refine, electronic products, and other mineral products. Its exports go to its major trading

partners specifically People’s Republic of China, United States of America, Japan, Hong Kong,

and Singapore. The country’s major imported products are mineral fuels, lubricants, and related

materials, iron and steel, miscellaneous manufactured articles, transport equipment, industrial

machinery and equipment, plastics in primary and non-primary forms, other food and live animals,

electronic products, telecommunication equipment and electrical machinery including

telecommunications and sound recording and reproducing apparatus and equipment. The

Philippines biggest suppliers of imported goods are People’s Republic of China, Japan, Republic

of Korea, Indonesia, and United States of America. On World Bank’s ranking of countries based

on Gross Domestic Product on 2020 report, the Philippines ranked 33rd among 206 nations.

Section III. Legal System

The Philippine legal system is an aptly unique mixture of customary usage, Roman system

(civil law), Anglo-American system (common law), and Islamic law. This unusual mixture of law

system is the result of the immigration of the Muslim Malays in the 14th century and the subsequent

colonialization of the country. From the beginning of the Spanish rule up to its defeat in the

Spanish-American war, the Philippines adopted the civil law of Spain. Likewise, when the

Americans have taken over the country in 1898, the United States common law principles were

engrafted in the Philippine legal system. The Philippines private law, substantially patterned after

the civil code of Spain, operates in areas such as law on persons and family relations, obligations

and contract, property law, criminal law, among others. On the other hand, its public law, notably

constitutional law, administrative law, corporations law, taxation, banking and currency, among

others are evidently based on the principles of common law of the United States. The sources of
the Philippine legal system are the Constitution/Code, Legislative Enactment/Statutes,

Jurisprudence/Judicial decision/Case law, and a number of other sources of law. For the Muslim

community, their primary source of Islamic law or “Sharia law” are the Quran, Sunnah, Ijma and

Qiyas. The Judicial power of the government lies with the Supreme and other lower courts: Court

of Appeals, Court of Tax Appeals, Sandiganbayan, Regional Trial Court, Metropolitan Trial Court,

Municipal Trial Court, Municipal Circuit Trial Court, and Sharia Court. According to the 1987

Constitution Article VIII section 5, the highest court in the Philippines or the Supreme Court

exercises “jurisdiction over cases affecting ambassadors, other public ministers and consuls, and

over petitions for certiorari, prohibition, mandamus, quo warranto, and habeas corpus. The Court

can review, revise, reverse, modify, or affirm on appeal or certiorari, as the law or the Rules of

Court may provide final judgements and order of lower courts” … in certain cases. One of the

lower court of the Philippines is the Court of Appeals, its jurisdiction is provided by Section 9 of

Batas Pambansa Blg. 129 as amended by Executive Order No. 33 and Republic Act No. 7902.

Pursuant to the Constitution, the Court of Appeals exercise jurisdiction on all cases not falling

within the original and exclusive jurisdiction of the Supreme Court. The court shall be composed

of one Presiding Justice and 68 Associate Justices. With the enactment of Republic Act No. 8246,

the 69 Justices are divided in three Court of Appeals throughout the Philippines: Luzon (Manila

1st-17th Division), Visayas (Cebu 18th-20th Division) and Mindanao (Cagayan de Oro 21st-23rd

Division). Another court in the country is the Anti-Graft Court or the Sandiganbayan, it was

created according to Article XIII section 5 of the 1973 Constitution and Article XI section 4 of the

1987 Constitution to “maintain integrity, honesty and efficiency in the bureaucracy and weed out

misfits and undesirables in government service.” The Sandiganbayan shall be composed of a

Presiding Justice and eight Associate Justices. The other lower courts are courts created to cover
legal cases within their jurisdiction and respective to their specified scope: Regional Trial Courts

and Sharia Courts to settle trials in each region and certain provinces in Mindanao; Metropolitan

Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts for trials in towns and

cities. The Bar Matter No. 1153, the academic requirements to qualify to take the bar examinations,

provides “that they have successfully completed all prescribed course for the degree of Bachelor

of Laws or its equivalent, in law school or university officially recognized by the Philippine

Government or by the proper authority in foreign jurisdiction where the degree has been granted.”

Rules of Court, Rule 138 section 6, which shall be subjected to amendments provided in Republic

Act No. 10533 – Enhanced Basic Education of 2013, likewise provides the pre-law academic

requirement which is a 4-year high school course and a bachelor’s degree in Arts or Science. Holy

Name University is among the official list of law schools in the Philippines according to the Legal

Education Board and Office of the Bar Confidant of the Supreme Court.

Section IV. Factors that Make the Country Ideal for International Business

Foreign investors and international businesses have always looked Philippines as a

favorable country maybe also because of the historical relationships between the country and large

countries such as the United States. Three of the many factors that makes this country ideal for

foreign investment are: Philippines is rich with natural resources; the country has liberalized and

favorable economic setting and; it has quality manpower. The Republic of the Philippines has an

estimated 7,640 islands with only about 2,000 are inhabited, making it a competitive standpoint

for business endeavors. Natural resources from its rich soils, mineral reserves, dense forest to

beautiful sand beaches, among others makes this country a very valuable prospect. The Philippines

soil especially in the plains of Luzon are best for planting and growing different crops such as rice,

tobacco, sugarcane, etc.. Surrounded by bodies of water, the Philippines is also very rich with
marine resources and is one of the primary livelihood and a great spot for tourists for diving and

snorkeling. Moreover, the country is also home to many species and a forest area of more than

70,000 square meters as of 2018. The Philippines is also very abundant with metal and nonmetal

mineral resources. Accordingly, studies showed that the country has an estimated metal deposits

of over 21.5 million metrics tons and nonmetal mineral deposits of 19.3 million metric tons.

Another factor that makes this country ideal for international business is its liberalized and

business-friendly economy. The Philippines has allowed 100% foreign ownership in selected

sectors such as allowing foreign companies to fully own large-scale geothermal projects, which

was signed by Energy Secretary Alfonso Cusi last 2020, in a move to replace coal with renewable

energy. The Philippines has also introduced incentives such as tax credit and exemptions, income

tax holidays, tax exemptions on certain imported products, non-fiscal incentives for foreign

investors, etc. The country also takes pride of its over 300 special economic zones, also called

ecozones, which composed of manufacturing, IT parks/centers, agro-industrial, tourism, and

medical economic zones. These ecozones are established under Republic Act No. 7916 and is

defined as “as a separate customs territory to promote flow of local and foreign investments that

would generate employment opportunities, simulate the repatriation of Filipino capital by

providing attractive climate and incentives for business activity, and for other purposes.” The

country also conducts programs and have many government and non-government organizations

that promote foreign investment and exporting. Moreover, Philippines has been actively

establishing trade agreements to its partners in such it became one of the founding nations of the

World Trade Agreement back in 1995. And more recently, the privatization of many publicly-

funded companies, in the hope to shift to an international economy, is the biggest development for

international businesses in the Philippines. The last factor that makes this country good for
international business is its people. With a population of over a 100 million, the Philippines takes

pride not just with its classic Filipino culture and values but also with its capable workforce. The

country is the sixth largest English-speaking country in the world making it easier for

communication and having a literacy rate of 94.6%, the Philippines has the most promising,

competent, and efficient workforce. In conclusion, the continuous economic development in the

country is an evidence that the Philippines is valuable prospect for international business

operations.

Section V. Factors that Make the Country Not Ideal for International Business

The Philippines has a strategic geographical location making it a natural gateway to the

East Asian Economies but, the location of the country also forms a disadvantage for international

business. The tropical archipelago is located just West side of the Pacific Ocean making the

weather generally hot and quite humid. The Philippines experience an average of twenty frequent

and large scale cyclonic storms and floods – making it the country’s principal natural hazard. This

weather conditions resulted to massive floods, power interruptions, cancellation of work and

school, etc. Moreover, aside from its astride location from the Pacific Typhoon Belt, the country

also belongs to the Pacific Ring of Fire. The country has 53 active volcanoes sitting across the

archipelago and does often experience more than 100 earthquakes, although most are weak and

not felt. Another factor that makes the country not ideal for international businesses is that the

country has more holidays than most countries. Compared to 11 official holidays in the US, the

Philippines has a total of 18 official nationwide holidays both non-working government and

religious holidays. Being predominantly Christians, the government officially deemed culturally

important events as holidays. This is not good for business especially that these holiday dates are

when consumer spends most. Holidays are very important for Filipinos especially with their
collectivistic views and giving importance for relationships. Which is why these holidays should

be the time to market products especially in merchandising businesses, but since most Filipinos

choose to refuse working during these dates, the company might have a great disadvantage during

this times. However, the employer may ask employees to work during these holidays but the Labor

Code of the Philippines specifically mandates to pay more or twice of the daily salary for those

employees. The last factor that makes this country not ideal for business is its heavy traffic.

According to Asian Development Bank, the Metropolitan city of Manila is the most congested

cities among the 278 cities in developing Asia and second most congested all over the world. The

country lacks urban and transport planning, especially now with the rise of industrialization, when

the capacity of transportation network cannot meet the travel demand at a particular time. The

traffic problem in the country has pegged economic costs at 3.5 billion pesos daily, according to

Japan International Cooperation Agency (JICA). Aside from the heavy traffic in Manila, other

major cities all over the country is also experiencing traffic congestion. The transportation system

in the cities cannot keep up with the demands for public transportation and the increasing private

vehicles. Major cities in the Visayas and Mindanao, namely Cebu city and Davao city, are

experiencing problems with their worsening traffic conditions especially during rush hours.

Although, rush hours are inevitable, ways to decrease traffic congestion such as congestion

charges, like in London and Singapore, must be implement. Also, the government should improve

mass transit infrastructure, expand and improved services, as well as enhanced roadway priority

to attract more public commuters and lessen private car ownership. Efficient train system is a good

investment especially with the increasing population of the country. The government must take

action and put importance on building efficient mass transportation system in the country to ease

the traffic situation.

Section VI. Relevant pictures

The Great Seal of the Philippines The Coat of Arms of the Philippines

Malacañang Palace
Watawat
the official residence of the
the Philippine flag
president

Vice President
President Rodrigo Leni Robredo
Roa Duterte 14th and
th
16 President of the incumbent Vice
Philippines President of the
Philippines

Senator Vicente C. Chief Justice

Sotto III Alexander G.
Senate President of the Gesmundo
17th Congress of the 27th Chief Justice of
Philippines the Philippines

The Philippine The Supreme

Congress Court
 Sampaguita Philippine
the national Pearl
flower of the national gem of
Philippines the Philippines

Boracay
Philippine Eagle one the most visited tourist spot in the
the national bird of the Philippines
Philippines
Grand Hyatt Manila
tallest skyscraper in
Barong Tagalog and the Philippines
Baro’t Saya
traditional clothes of
the Philippines

Metropolitan Manila
capital of the Republic
of the Philippines
Chapter III. Central African Republic

Section I. Political System

Decades after colonial independence, political instability, and intrastate coups, the Central

African Republic finally adopted an organized and established Constitution. The 2016 Constitution

of the Central African Republic built the political system of the country as a republic state with a

presidential system. The government, like Japan and the Philippines, is comprised of three

branches: the Executive branch, the Legislative branch and the Judicial branch. The Executive

power is composed of the president of the Republic and of the Government. The President shall

be the Head of the Executive, Head of State, and Supreme Head of the Armies, while the Prime

Minister shall be the Head of Government. The president shall appoint the vice-president, prime

minister and other members of the cabinet on the proposal of the prime minister, op military

officials, and managers of national parastatals. The President of the Republic is elected by direct

suffrage and by secret majority ballot through a two-round system. The President shall hold office

for a 5-year term renewable for one sole time. The current President of the Central African

Republic is President Faustin-Archange Touadéra. The Prime Minister, the Head of Government,

shall direct the Administration and appoints to specific offices determined by the law, assures the

execution of the laws, and resides over the Councils of the Cabinet and of the Inter-Ministerial

Committees. The functions of the Prime Minister shall be subject to termination upon the decision

of the President. The current Prime Minister of the country is the former Finance Minister

Honorable Henri Marie Dondra. The Constitution provides the creation of a parliamentary

bicameral legislature, consisting of the National Assembly and a Senate which legislates and

controls the action of the Government. The National Assembly currently consists of 140 elected

deputies for a mandate of five years. According to Article 68 of the 2016 Constitution, each Deputy
is the elect of the nation. The National Assembly shall elect its President within the first eight days

of its installation. According to the Constitution the Senate shall be composed of elected officers

and hold office for a 5-year term. Each senator is the representative of the Territorial Collectivities

of the Republic. The Senate shall likewise elect its president within the first eight days of its

installation. There are no current officials holding the senate seats in the government. The Judicial

power of the government is independent from that of the executive and legislative powers and yet,

the President of the Republic is the guarantor of the independence of the Judicial Power. The

judges are independent and are only subject, in the exercise of their functions, to the authority of

the law. The judicial sector encompasses the Constitutional Court, the Council of State, the Court

of Accounts, the Tribunal of Conflicts, and the Courts and Tribunals. The Constitutional Court,

being the highest jurisdiction of the State in constitutional matters, is consists of 9 members,

including 4 women who shall hold the title of Constitutional Judge and shall hold office for a 7-

year term.

Section II. Economic System

The ongoing civil war between the Central African Republic government and the coalition

of major rebel groups in the country continues to have a devastating impact on the country’s

already fragile economy. Aside from its isolated geographic position, the country has no formal

regulations that is why it has very little authority over monopolies and oligopolies. Moreover, the

latest episode of brutal conflict that caused violent chaos has further declined the freedom of trade

in the country. According to World Bank, this “cycles of violence are deeply rooted in factors that

drive fragility such as a lack of social cohesion at all levels of society, the concentration of political

power in the hands of a small elite, social and regional disparities between Bangui and its outskirts,

the capture and mismanagement of natural resources by the elite, and persistent insecurity fueled
by a regional system of conflicts.” The country’s low level of economic freedom is evidenced by

The Heritage Foundation Economic Freedom Index 2021 report, accordingly, the country scored

48.8 making it one of most unfree and repressed economy all over the world. Although the current

condition of the country is unstable, back in 2019 the historical data from The Observatory of

Economic Complexity report showed that the country mainly exported rough woods ($37.4M),

gold ($13.3M), sawn wood ($11.4), diamonds ($6.64M), and other sea vessels ($2.02M). Central

African Republic has a total land area of 623,000 square kilometers; 23 million hectares are

forestland, 1,800 – 3,000 hectares are plantation of timbre, and a 1,000-hectare rubber plantation.

Agriculture has been the largest sector in the country contributing half of its gross domestic

product. The country mostly exports its products to China ($32.7M), United Arab Emirates

($15M), France ($5.26M), United States ($3.39M), and Italy ($3.15M). On that note, the country’s

top imported products include refined petroleum ($57.7M), packaged medicaments ($25.2M),

petroleum gas ($20M), broadcasting equipment ($8.53M), and used clothing ($6.15M). These

products are imported mostly from India ($55M), France ($36.9M), United States ($33.5M), China

($25.6M), and Netherlands ($21.9M).

Section III. Legal System

The legal system of Central African Republic is highly based on the French civil law

system following its colonization of CAR during the nineteenth century up to the year 1960 when

the country gained its independence from the French army. Just like other countries, the CAR legal

system is modeled upon the elements of five main types of codes and principles: Civil Law

including the French law, Napoleonic Code, Roman law, Roman-Dutch law, and Spanish law;

Common Law including the United States Law; customary law; mixed or pluralistic law; and

religious law including Islamic law, with the addition of the international law which governs he
conduct of independent nations in their relationship with one another. Due to successive wave of

violence from different armed groups that resulted to a major, and drastic destruction of the

country. The justice system of the country took no effect not until the establishment of the Special

Criminal Court in 2015 with the help of international organizations. The Special Criminal Court

is national tribunal made up of national and international magistrates. The court shall have

“mandate to investigate, prosecute and judge serious human rights violations and grave breaches

of international criminal and humanitarian law committed on Central African soil since 1 January

2003.” The court shall likewise be comprised of three judicial of three judicial officials and two

other international judges. During the side event cohosted by the Wayamo Foundation, the

International Nuremberg Principles Academy and the Africa Group for Justice and Accountability

(AGJA), the CAR Ministry of Justice Mr. Flavien Mbata said that “The law establishing the SCC

sends a strong signal in the fight against impunity and will contribute to long-term stability, crime

prevention and national reconciliation.” The Special Criminal Court official began its operation in

2018 following the legislative adaptation of its Rules of Procedure and Evidence. According to the

latest publicly available data, the court currently has eight cases in which the investigation has

been closed, eight cases under investigation, and 15 cases under preliminary investigation. Further,

the arrest of 21 individuals following horrendous crimes of rebellion and human rights violations

served as an evidence that justice for the death of thousands Central African Republicans is slowly

progressing.

Section IV. Factors that Make the Country Ideal for International Business

The three factors that makes this country favorable for international business are: ease of

internal trade due to limited regulations; abundance of natural resources and; diverse business

opportunity. According to a report by World Bank in 2019, Central African Republic is highly
favorable to international trade taking 66% of the country’s Gross Domestic Product. The

country’s economy is widely liberalized with no screening of foreign investment in all economic

sectors. The country is a member of different trade agreements; it has been a founder member of

the World Trade Organization since 1995. The Central African Republic is also a member of

regional economic communities such as; the Central African Economic and Monetary Community

(CEMAC), the Economic Community of Central African States (ECCAS) and the Community of

Sahel-Saharan States (CEN-SAD). These associations ensure good relationship and continuous

trade between Central African Republic and other countries. Although, there are no trade

agreements between Central African Republic and the United States and other European countries,

the country was able to export $154 million goods to US in 2019. The second factor that makes

this country ideal for international business is its abundance of natural resources. The country has

very impressive agricultural potential along with its vast mineral resources and forests. Moreover,

growing vegetables for exportation is supported by the government, which is a great business

opportunity. The tropical rainforest in the southwest of the country is a vital source of Central

African Republic’s timber exports. The country has also a good livestock population including

cattle, sheep, goats, pigs, poultry, pond-raised tilapias and other fishes. Aside from non-mineral

resources, the country is very abundant with mineral reserves. The country’s diamond exports

contributed nearly half of its total exports. Central African Republic has also small quantities of

gold, uranium, iron ore, copper, and manganese. And lastly, the country is ideal for international

business because it has plenty of rooms for diverse of business opportunities. This paper already

discussed about agriculture, mining, etc., but the important thing to note is that since the country

is still and continually progressing, it creates endless business opportunities for both citizens and

businessmen. Because also of the country’s current economic condition, market competition is not
a problem for business-people. Business opportunities such as renewable energy projects and

introducing transport system in the country is a start. In conclusion, Central African Republic a

fresh country to start an international business. Its foreign business-friendly systems and very

promising potential for economic growth is favorable for business investment.

Section V. Factors that Make the Country Not Ideal for International Business

Although Central African Republic has always been looked favorable, there exist certain

factors that makes it not ideal for international business. Three of these factors are: political

instability, landlocked location, and safety and security issues in the country. For many years the

Central African Republic has a very unstable political conditions due to dozens coup attempts and

mutiny since it gained its independence from France in 1960. Poor governance and poverty has

also contributed to the such instability. These problems have hinder the development of the

country’s rich and diverse natural resources. Moreover, the lack of cooperation from armed groups

has led to the deteriorating economic and social performance of the country. In a book by Clément,

he presented reasons of the country’s political instability such as search for rents in this diamond-

rich nation and widespread dissatisfaction of the population stemming from wage arrears and

deterioration of public services. Empirical literature has properly documented how an abundance

of natural resources, such as diamond, retard economic growth through increase in corruption and

political economic growth. Policymakers exploit these natural resources for themselves and their

associates rather than helping the community grow. The dissatisfaction of the public may have

contributed to the rising number of coup attempts in the country. The weak economic performance

that led to the frustration of many Central African Republic people has greatly affected the political

instability and the continuous deterioration of the country’s economy. The landlocked location of

the country is the second factor that makes the Central African Republic not ideal for international
business. The country is surrounded by Chad on the north, Sudan on the east, the Democratic

Republic of Congo and the Republic of Congo on the South, and Cameroon on the west, all of

these neighboring countries are very unstable. Its geographic location has intercepted the country

from direct access to the sea, no railways, and has only about 600 kilometers of paved roads. The

country relies on waterways, about 4,400 miles of inland waterways, for its communication and

commerce. The only normal route for international transportation link with outside world is the

Ubangi-middle Congo route. There is only one international airport which is at Bangui-Mpoko

and several irregular, highly depends on the supply of aviation fuel, in the country. Nevertheless,

moving products and people in the country is exceedingly difficult. The third and probably the

recurrent problem and factor that makes international business avoid the Central African Republic

is its safety and security issues. As introduced in this chapter, the continuous violence in the

country that contributed to its political instability has also greatly contributed to its major economic

downturns. The capital of Central African Republic, Bangui, remains fragile with periodic violent

crashes between armed groups and the government. There are several official and illegal

roadblocks and are likely to be manned by armed personnel. The government received reports of

rebel activity, banditry and hostage-taking across the country. In conclusion, with the current

political, social, and security conditions, the country is does not have a great, not even a good one,

business environment for international business. But with the constant and coordinated efforts and

strong support from the international community lessens these unfavorable situations in the

country. Also, the current president of the country never stops from having negotiations and peace

agreements with the major armed groups in the country. The international community hopes to

resolve the internal conflicts in the country in order to make the country an ideal location for

international business operations.

Section VI. Relevant pictures

Coat of Arms of the bendêre tî Bêafrîka

Central African Republic flag of the Central African
Republic

Prime Minister
Henri Marie
Faustin-Archange
Dondra
Touadéra
Prime Minister
President of the Central
of Central
African Republic
African
Republic

Renaissance Palace official

Parliament House residence of the President of
Central African Republic

Geographical location of Central Mr. Flavien Mbata

African Republic Minister of Justice
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