POLITICAL ENVIRONMENT IN PROMOTING OF ENTREPRENEURSHIP.

 BY K P PASWAN

 In contemporary world young entrepreneurs mean highly qualified professionals educated in reputed financial and technological institutes with sufficient resources to start new big or small manufacturing activities.. Most of them are picked up by reputed MNCs which have branches in different countries. But these MNCs don’t go to countries plagued by internal conflicts and political instability. Even after disappearance of colonial powers, most of the countries once ruled by foreign powers suffer from abject poverty, malnutrition and lack of basic health related facilities. In most of the developing countries political environment is badly polluted by corruption and above all sectarian conflicts. Than there is vulgar display of certain fundamental rights like right to protests against the policies of the government even if it means violence and street fighting.

 An impartial survey of certain countries shows that favourable  political environment of a country attracts MNCs and other entrepreneurs. This is happening in Latin America. Several countries like Panama, Colombia and a few others were known for brutal governments running on drug money, but several corporate houses were given attractive tax incentives. The result is that not only American corporate houses but even the European entrepreneurs are flocking to Latin America and these countries are no longer suffering from poverty and starvation.

 But the poor are not the real beneficiaries of these countries, they are victims of corrupt political system. The governments provide cheap labors to these corporate houses and profits are divided between politicians in power and the MNCs.Liberal tax regime and corruption are favourable platforms for some entrepreneurs to expand their activities. Astronomical rise of China as economic superpower cannot be attributed to open democracy but a congenial political system in which there is no place for free speech. There is political stability in China but that stability is due to one party’s rule. Neither president nor prime minister is democratically elected on the basis of universal franchise China is filled with new and old corporate houses. This country used to be a Communist country and still claims itself as communist regime. Realty is somewhat different. Tax incentives, cheap laborers and above all possession of private property and disciplined banking system are not the fundamentals of communist ideology but these ideologies are being espoused by the current regime in China.

 Learning lessons from the collapse of communism, China with the help of western powers molded its political system, not hostile to capitalism. The result is that along with flourishing of modern entrepreneurship Chinese people are no longer poor as there is no report of starvation and malnutrition, these are the claims of the present regime and we do not know the reality. Economic prosperity of China has created intense zealously all over the world as similar political environment prevailed in many countries but they are unable to attract foreign investment. Only plausible explanation is that entrepreneurs and large MNCs were tempted by economic incentives which were not available in other countries

 In most of the African countries it is not the political and social environment but amount of bribery offered by foreign investors to the politicians in power who create political conditions in favor of entrepreneurs. Several heads of states in Africa are facing corruption charges. Former president of South Africa is facing jail sentence for favouring Indian entrepreneurs. In the middle east neither political nor social conditions are favourable for new industries, but the foreign entrepreneurs skilled in oil explorations are investing heavily in creating infrastructures for oil generation.These entrepreneurs are paying bribes as protection money to  influential autocrats in power. However autocrats rulers are also spending heavily to raise the standard of living of  common people.

 Political environment in promoting  industrial activities is certainly contributing factor for removal of poverty in other parts of the world. Expansion of manufacturing activities means employment opportunities for skilled and unskilled workers.  MNCs from developed countries are moving to less developed countries to save taxes and also expanding their business, German MNCs in China are doing far better than other entrepreneurs belonging to US and other countries of Europe.

Political instability has become relative in modern world. Social environment  in erstwhile Soviet Union and Africa have different explanations. These small former communist countries in Eastern Europe are rich in natural resources but common people suffer from starvation. Political situation in Ukraine and other former communist countries  is not congenial  to attract foreign investors. Polish people are immigrating to US and the situation is worse in some African countries. Refugees from some African countries are desperately going to developed nations of EU as the political environment is neither favourable to people nor to entrepreneurs of countries from which these poor people originate.

Political environment of a country in modern world is greatly influenced by other factors. Coronavirus was first reported in China and within short period the pandemic clouded the entire world. It was feared that a large number of MNCs would move out of China to other underdeveloped countries like India, but it did not happen. Certain manufacturing units shifted their activities to Vietnam and not to India.

 Political environment in India under an honest PM is friendly and foreign investment has shown marked improvement. But the Coronavirus greatly savaged the emerging economy of India it is so because that big foreign powers were not discouraged by Chinese government to move out of China. XiJinping the strongman of China establishes ambitious goal. The political environment in China is to get conspicuously better the widening gap between China and developed countries.  There have number of growing of popular protests over matters such as corruption and giving fertile lands to foreign entrepreneurs. But Xi jinping is not about to change course of actions. He focused on maintaining social stability.

India’s trade relations with China is a glaring example of favorable political and social environment. Export to China from India is to the extent of 1.9 billion dollar while import from China is about 3 billion dollars. India is contributing to the growth of China due to this trade deficit.

In the case of Afghanistan,  and a few other poor countries, proper political and social environment for attracting investors cannot be created. Afghanistan has left its industrial progress at the mercy of an unproven Almighty while Haiti is suffering from natural calamities. Several small countries are paradise for tax evaders. They are creating environment favorable to money launderers. Surprisingly some of the top corporate houses of US and EU are extending logistic and financial incentives to these small countries

FINAL THOUGHT. These days, foreign entrepreneurs are virtually forcing political heads of different countries to create favorable political conditions in their interest. This tendency cannot be stopped as even the dictators want to boost anti-poverty planning even if it means earning money by indulging in corrupt practices. It will not be an exaggeration to say that entrepreneurs are encouraging such politicians and creating  favorable political conditions in their favor.