A CRITICAL ANALYSIS ON HOW DO BUSINESSES RUN IN A POLITICALLY UNSTABLE ECONOMY, AN EXCERPT OF SYRIA
INTRODUCTION
The uniform definition of political instability is the proclivity of the fall-in government either because of rampant competition between various political parties or conflicts amongst the people of the nation. In our study, it has been found that economic growth and political stability are deeply interconnected. There remains a thought that on one side the unpredictability associated with an inconstant political environment may lessen investment and momentum of economic development leading to poverty, and on the other side, poverty-stricken economic performance may lead to a fall-in government. Now political stability in unstable economies is usually attained through persecution or by having a political party in a place that does not have to compete to be re-elected. In these cases, political stability is a double-edged sword, with the pleasant business environment that political stability offer for business is ideal however, it could easily become a breeding ground for cronyism with impunity. Such is the uncertainty or unreliability that many nations with a fragile political decree have to face. Thus it can be said that having a politically stable tag does not sum up being stable, customarily countries with only one-party rule, end up being detrimental. The prevailing economy would be showcasing a good image as it would have constantly been in a position to attract investment with upholding a stable political environment, however other factors of the society primarily the citizens would be affected sharply because of lack of competition or opacity. These are just a handful of thoughts while taking into consideration political stability.
BACKGROUND
The question arises of how far the word business holds importance when you consider countries politically unstable, like Syria. The economy of Syria has been put to a toss, with the ongoing civil war that prevails in the country. The world bank estimated that the country incurred a total loss of $226 billion starting from 2011 that lead to a near-collapse of the economy in the year 2020. The country accounts for a population of 1.69 crores, with over 80% of the population living in poverty. Satisfying human needs is a major aspect of the country rather than making a profit out of a business.
REVIEW OF LITERATURE
1. “POLITICAL INSTABILITY AND ECONOMIC GROWTH” - NBER working paper: Investigates the relationship between political instability and per capita growth GDP. This gives us an idea about how are businesses run in a politically unstable economy.
The main result of the paper is in countries and periods with the collapse of the government, the growth was bound to be less than otherwise. The development declines gradually and drastically after the fall of political stability.
2. “THE IMPACT OF POLITICAL INSTABILITY ON ECONOMIC GROWTH” - An empirical analysis on the case of selected Arab countries: This study investigates the impact of political instability in countries of Egypt, Jordan, Lebanon, Tunisia. As to what remains the factors which lead to the decline in the growth.
The paper tested if political instability has any effects on the growth or economy.
3. “POLITICAL INSTABILITY AND ECONOMIC GROWTH” - Harvard Business Review: This paper examines the connection between political instability and per capita GDP development is an example of 113 nations for the period 1950-1982. The paper characterizes "political instability" as the propensity of an administration breakdown, and gauges a model wherein political instability and economic growth are jointly determined.
4. “REBUILDING SYRIA - The Middle East’s Next Power Game” edited by Eugenio Dacrema and Valeria Talbot introduction by Paolo Magri: In this book, the author emphasized Syria, its geopolitical reconstruction, the risks involved in the process of reconstruction of Syria, What should be the ideal approach in the reconstruction process and it also examines the future of the Syrian Refugees.
5. “THE SYRIAN CONFLICT: A CASE STUDY OF THE CHALLENGES AND ACUTE NEED FOR MEDICAL HUMANITARIAN OPERATIONS FOR WOMEN AND CHILDREN INTERNALLY DISPLACED”: The paper emphasized how After 7 years of increasing conflict and viciousness, the Syrian common war presently comprises the biggest dislodging emergency on the planet, with more than 6 million individuals who have been displaced internally. Among this generally weak populace gathering, ladies and youngsters face critical difficulties related to the absence of satisfactory admittance to maternal and child health (MCH) services, threatening their lives along with their immediate and long-term health outcomes.
6. “THE POLITICAL ECONOMY OF SYRIA - REALITIES AND CHALLENGES”: This paper gave a staunch conclusion stating that if Syria is to withstand the future shocks while maintaining the social and political stability the government desires, it must radically overhaul the economic and administrative structure
7. “NO BUSINESS AS USUAL IN SYRIA”: Based on individual considerations and prevailing security and economic conditions, reinvestment in Syria will be limited and could have mixed effects; this is a very Informative blog which tells about how are business run in Syria, the problems that local businesses face, the components which do not allow the businesses to flourish.
8. “CAN POLITICAL STABILITY HURT ECONOMIC GROWTH?”- In this blog, the author has emphasized the relationship of economic growth and political stability, by taking examples of politically unstable countries like the South African States and Vietnam and also came to a conclusion that stable government does not necessarily ensure high economic growth giving an Example of India.
OBJECTIVE: The objective is to,
1. Examine the result of political instability in Syria
2. What resists investments in politically unstable countries.
3. The possible measures that could be taken to ensure Investments
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WRITER:
NAME: PRATIK MAITRA
COLLEGE: SYMBIOSIS LAW SCHOOL, HYDERABAD
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