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Finance & Accounting
Pages 8 (2008 words)
Ruritania is a perfect example of a transitional economy. Ruritania is currently an economically developing Eastern European country. The annual growth rate has averaged around 6% per annum over the last five years with annual inflation rate of 5.2% (Case Study). …
The country is currently politically stable. Governments have been democratically elected for the last twenty years. There are two major political parties in Ruritania. The country is about to go for polling in next couple of months. Recent opinion polls suggest that the present Government currently enjoys a 7% lead over the other major party and this view has remained reasonably stable. So if the incumbent government stays in power, it will continue the reform works. The other major party is also committed to democratic principles and a market based economy. They intend to increase both corporate and personal taxation to provide additional funding for their proposed social expenditure (Case Study).
The currency of the country was deregulated nearly twelve years ago. Though there was initially a sharp depreciation of the currency, the currency has gained stability against major international currencies during the past three or four years. There has been a speculation that the government will peg the currency with a major currency as a first step for joining the euro. Ruritania is currently negotiating for membership of the European Union and hopes to join in about 2014 (Case Study).
In this case, our company wishes to set up a manufacturing in the country in order to utilize the low cost labor and access the local market. ...
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