International business in a world of uncertainties

International business (also, global business) is a term used to describe all commercial transactions, in general, (private and public, procurement, sales, investments, communication, trade mission, logistics, education, transport etc) which occur between two or more regions, countries and nations for economic gains beyond their political borders. International business refers to those business activities which include cross-border transactions of goods, services or resources between two or more nations. Examples are international trade, foreign-owned companies, foreign investments and foreign airline businesses etc. Transactions of economic resources include capital, skills, raw materials and people for international production of physical goods or services, such as finance, banking, insurance, construction, etc. These economic transactions consist of trade (imports and exports) and foreign direct investment (FDI).

International business is a business whose activities are carried out beyond the borders of the founders’ country and not only include international trade and international production but growing service trade in areas such as transport, tourism, advertising, construction, retail and mass communication. The companies that are active in international business (local, foreign and multinationals) are usually established to take advantage of robust markets for products, cheap labour, availability of abundant raw materials, conducive business environment like tax holiday and free industrial space, low excise duty on imported raw materials etc. Governments, private organisations, groups and individuals, for so many reasons, invest in properties or keep money in foreign countries. After World War II, a lot of Chinese travelled out of China to seek greener pastures in the West. This marked the beginning of international business.

Uncertainties are situations, events or things that cannot be predicted. Uncertainties are lack of certainty; a state of limited knowledge where it is impossible to exactly describe the existing state, or a future outcome, or where there is more than one possible outcome (probability) of an event. They form an element of risk in businesses. Uncertainties can be categorised into two; the insurable and the non-insurable. The uncertainties of international businesses are higher than those of local businesses. The reasons why a company becomes a multinational despite the high degree of uncertainties in the foreign business climate can be categorised into two: Operational needs of the business like providing raw materials, equipment, technology and release of surplus production; and strategic needs like ensuring the inviolability of future changes in the external environment, steady growth (maintaining historic patterns of growth, avoiding stagnation caused by saturation, increasing the volume of business, increasing the rate of growth) and sustainable profit.

According to Nick Robertson in Yahoo!news of 25 February 2024, the (now former) UK Prime Minister, Rishi Sunak, called on the country’s allies to be “bolder” in efforts to seize Russian assets amidst the invasion of Ukraine. Sunak called on the Group of Seven (G7) nations to find a “lawful way” to more aggressively seize frozen assets belonging to the Russian government and its richest citizens, liquidate the physical assets and pass the proceeds back to Ukraine to aid its defence. Should frozen Russian assets in international business be seized to help Ukraine fight Russia in a war considered to be an unprovoked invasion and an oppression of Ukraine by Russia by G7? This is not the first time that international business owners will suffer as a result of ‘bruised’ relations between their state of origin and other nations or groups of nations. In 1972, following the expulsion of Ugandan Asians, most of whom were of Indian descent, India severed diplomatic relations with Uganda. As part of its “economic war”, in the same 1972, General Idi Amin, the Ugandan head of state, broke diplomatic ties with the United Kingdom for being on the path of the truth and nationalised all British-owned businesses in Uganda.

In 2000-2001, Zimbabwe government violently seized farmlands from thousands of white farmers to redress colonial-era land grabs in Zimbabwe but this contributed to the country’s economic woes, food security decline and ruined Zimbabwe’s relations with the West. In 2020, the Ghanaian government asked Nigerian business men and women to procure Ghana Investment Promotion Centre (GIPC) business permits at one million American dollars each and, in South Africa, xenophobia is a regular occurrence. There has been a history of xenophobic attacks against Nigerians living in or visiting South Africa over the years with the South Africans claiming that Nigerian business men and women deal in drugs or take their jobs and that Nigerian men take their women. These developments are great concerns for the promotion of African Continental Free Trade Area (AfCFTA) established in 2018 to fast track intra-African trade, and which has the potential to grow African economies as well as improve the lives of people across the continent.

The Chinese government is cautious in its diplomatic dealings with the West, especially on the Israel-Gaza war, as any attempt to step on toes will affect its citizens most. SOHO in Central London, England, is dominated by the Chinese and there is no state in the United States of America without, at least, a Chinese village. The Los Angeles County city of Monterey Park in California; Queens and Fusion in New York City are highly populated by Chinese. Indonesia has the largest overseas Chinese Diaspora numbering over ten million people. If globalisation is understood more as a process that leads to greater economic integration of national economies and as a process of fragmentation of the world economy, than as a process of opening up of national economies through the removal of trade and financial barriers of national economies and thus their transformation into an international economic and financial market hub, then there should not be sanctions of international business owners or seizure of their assets in times of hostility between their country of origin and host countries.

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