In the world we live, everything is interconnected. There could be different sectors, industries, and so on, but they all impact one another. A classic example would be how political tensions affect businesses. Apart from the nation that is primarily affected by the tension, other nations' stances affect the businessmen in those respective nations. A political tension always comes with an economic impact that cannot be ignored. Here is a brief insight into how political tensions in various parts of the world affect businesses.
Interdependence in business
Thanks to the globalization wave, most businesses depend on raw materials from different parts of the world. Yes, there are be self-sufficient businesses too. But a majority of businesses have operations across borders. Either the labor is outsourced, or the raw materials come from a different country. The final product is also shipped across borders. Therefore, minor aggression or political tension is enough to spark a negative effect.
For instance, consider two countries A and B. If an immigrant from B is shot in country A due to a hate crime, all B will unite to boycott products from country A. The businesses based in A may or may not share the same beliefs/opinions as that of the perpetrator of the crime. However, they still get penalized. Such is the nature of the world.
If boycott movements due to political tensions run strong, businesses can experience irrecoverable losses too. Sometimes they lose a significant market share. Thus, businesses must have a safety net. Their risk mitigation plans must include steps to redirect the products and services elsewhere if things go wrong.
Political tensions and the Indian diaspora
Indians living overseas are also affected by the various political changes in the country they have emigrated to. They always have to keep an eye on students' visa policies, dependents, work permits, and protocols. Governments reform their immigration policies from time to time. The diaspora would probably be the most affected when the elections are around. If the incumbent party loses, a new government comes into power. A new government could bring several new policies and scrap the old ones – all of which may or may not benefit the migrant community.
COVID 19 – the new challenge
To add to the factors that affect businesses, the year 2020 saw the spread of a virus that quickly grew into a pandemic. The virus has led to rising unemployment in several countries. As some countries brace for a second wave, it is predicted that many more people would lose their jobs/have problems finding a job. It means that the purchasing power is bound to fall. Again, businesses would suffer. Due to unemployment, sales would suffer, which in turn may affect the spirit of the workforce. Layoffs are becoming quite common too. The pandemic has taught an important lesson – how uncertain things can be and how to handle things even when one is least prepared.
