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International Businesses or Multinational companies came to the scene in the latter half of the 19th Century when they spread their activities into the global economy. They were few in 1945 but their populations grew to over 9000 by 1973 and to 30000 by 1990 at a global level. In 2011, the United Nations Conference on Trade and Development (UNCTAD 2011) observed that there were over 100,000 Multinational companies controlling about 900,000 foreign affiliates. Despite this growth, international businesses in some cases use strict scrutiny of countries in which they need to operate in, dependent on whether a country practices democracy or totalitarianism. Some companies find it easier to run their companies in countries practicing democracy and allergy that it is difficult to run it in totalitarian based countries and others endure economies to still operate in both types of economies. Even Nobel prize winner Amartya Sen argues that economic development is a process where countries expand the real freedoms of their people.
a. Analyze the notion that multinational companies (International businesses) move away from centrally planned and some mixed economies to market-based economies [30 Marks]
b. Discuss the motivation by international businesses of prioritizing investing in countries with high GDP and GNI? [40 Marks]
c. Explain the necessity of the human development index in the countries in which international businesses invest in?
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