The financial environment is especially critical to those companies doing business in more than one country. This is because balance of payments, the foreign exchange rate and regulations regarding how much money can be transferred between countries all come into play, and none of these factors are important to a company which operates in only one country. There can be considerable risk to companies that do business in countries where the economic environment is unstable because devaluation of currency can greatly affect the profits of the company. Similarly, a country where there is an unstable currency may be indicative of a country where other factors would suggest that long-term success may be questionable. In some cases, the instability of a nation's currency can be a hallmark that the government will move to take over (nationalize) some industries ("Practical", 1991, p. 7).Industry in Kuwait consists of several large export-oriented petrochemical units, oil refineries, and a range of small manufacturers. It also includes large water desalinization, ammonia, desulfurization, fertilizer, brick, block, and cement plants. During the invasion, the Iraqis looted nearly all movable items of worth, especially high technology items and small machinery. Much of this has been replaced with newer equipment. to gain inroads (Aizenman, 1994, p. 460). Five year development plans are used by the government to transform its relatively undeveloped, oil-based economy into that of a modern industrial state while maintaining the kingdom's traditional Islamic values and customs. Although economic planners have not achieved all their goals, the economy has progressed rapidly, and the standard of living of most Saudis has improved significantly. Dependence on petroleum revenue continues, but industry and agriculture now account for a larger share of economic activity. A shortage of skilled Saudi workers at all levels remains the principal obstacle to economic diver |
