1. Relationship between Political Environment & Business
The political environment can affect a business either positively, or negatively, depending on the
prevailing situation in a country. It mainly forms the external factors - which are part of the
macro-environment, control of which is beyond the ability of human beings.
These factors touch on the way politics are conducted in a country, which directly reflects on
what is happening within the government itself.
This means that a democratic country will accord freedom to its people to vote for a government
which has their interests at heart, and thus business will thrive - owing to the good policies the
government implements.
On the other hand, a dictatorial government will not earn the respect of its citizens - leading to
economic as well as political instability and uncertainty.
Even though such a government will eventually go, businesses suffer a lot during the
government's tenure, since they are not sure of their future. This underlines the importance of a
democratic government to a country and to business.
Needless to say, once a country is stable, more investment opportunities will be realized, thus
attracting more and more investors. This will reflect positively and directly on local businesses,
as citizens will be able to have full confidence in them.
Business success depends on politics to a high degree, and in many ways. Politicians are usually
the people controlling the operations of a government, and will decide which countries to trade
with, as well as on setting the trading conditions.
This means that, if a certain business or its owners are not on good terms with the politicians,
then they will suffer.
Furthermore, the rules that govern and regulate the manner in which trade is conducted are
enacted by the politicians - thus good relations are needed between stakeholders in the business
sector and politicians, to facilitate success.
 How Does Political Environment Affect Home Business
Business deals totally depend on the political environment.
1) The politicians are the only people who decide with which other countries trade takes
place, and under what conditions.
2) The rules and regulations for trade are passed by politicians.
3) If political relations are not good with a neighboring country, or with any country
with whom you want to trade, you will not be allowed to do so - due to the rules &
regulations which have been made by the politicians.

2. The political environment is one of the most important factors affecting the operations of a
business. Political forces are said to be part of the macro-environment. All the factors of the
macro-environment are external to an organization, and completely beyond its control.
Political factors are concerned with the overall situation of politics in a country, which can, in
turn, be associated with the situation of government.
If a country is democratic by nature, people will have full voting authority and will be able to
choose a government that will work for the betterment of the people and the country. In such a
situation, businesses will thrive, because of the good policies of the government.
On the other hand, if there is no democracy, there is no respect for the chosen government, and
there will therefore be instability and uncertainty in the country.
Governments will come and go, and so will their respective decisions and policies. Businesses
will suffer in such a case, as they will not know what will be their future.
That is why it is said that a stable and democratic government and its political decisions are
important for a country, and for business overall. A stable political situation will also attract
more and more investors from other nations.
 Aspects of the political environment to be considered
1) Stability of the government
2) Government type (dictatorship, democratic, monarchy, etc)
3) Economic policy of the government
4) Trade policy
5) Diplomatic events in surrounding countries
All of the above factors affect the business environment and whether or not business will thrive.
Recent events in Pakistan, and the current situation in Iraq, are examples of what happens to
business when the political environment is unstable.
 Political environment & Business environment in Cuba
According to the Economist Intelligence Unit, the role of the market in Cuba is going to be
expanding in the years to come. The country's is an excellent business opportunity for anyone
who is willing to accept the challenge and to give it a try.
Doing business in Cuba comes with its specifics that are determined by the country's financial
system and local peculiarities. A number of companies from Europe, China and Canada in
particular are already having successful businesses operating in Cuba.

3. Cuban business is benefiting from the numerous infrastructure and social improvements that
are currently taking place. The state has invested in the improvement of the railroad system, the
construction of desalination plants and the tourism sector is seeing growth and support. All of
these characteristics determine the local business environment as a good opportunity that is
going to continue expanding through economic reforms that have recently started.
Naturally, tourism can probably be ranked as the most beneficial and profitable business in
Cuba. Official statistics for 2012 show that tourism has registered a 12 percent income increase
in the first quarter of the year. The country has also seen an increase in the number of visitors
that totals four percent.
Cuba has more than 300 hotels that offer employment to many and that are determining for the
Cuban business environment.
In 2011 and 2012, the Cuban government did undertake a series of economic reforms that
affected the local business environment in a positive way. The restructuring of the state
administration was the first one. In addition, the government accepted a number of reforms
stimulating the appearance of small businesses.
Some economy experts from across the globe state that Cuba has the potential to turn into the
"next China" in terms of economic and production capacity. The changes that have taken place
recently validate the claim and demonstrate that the country has a lot of potential that is yet to
be fully harnessed.
Foreign companies are successfully functioning in Cuba and according to many business
representatives, the time is right for others to enter the local business stage.
The French CoFace credit risk and investment company assessed the business climate and
environment in Cuba, coming up with a rather comprehensive and intriguing report. According
to CoFace, Cuba's biggest strengths include very skilled workers, the attractiveness of local
tourism landmarks, the availability of natural resources like nickel and oil, the good social
indicators, the agreement with Venezuela that ensures preferential oil import and the
agricultural production of sugar and tobacco among many others.
These trends and positive developments in 2011 are expected to continue throughout 2012. The
Cuban business environment is expected to become even more attractive, both for local
companies and for foreign entrepreneurs that are wishing to start operating in the country. Cuba
has tremendous potential and the state is showing its willingness to work on even better
business environment and opportunities.
For business aficionados, a big event coming up is the International Fair of Havana.

4. The International Fair of Havana celebrates in 2011 its 29th edition among great expectations
created by the start of a transformation and upgrading process in foreign trade and foreign
investment areas, in accordance with a group of new economic guidelines promoted by Cuban
authorities.
With an exchange nearing 10 billion dollars a year, Cuba's foreign trade has a relevant position
in the said guidelines, which were conceived to strengthen the country's response capability in
the present international situation, and after performing a meticulous diagnosis identifying
necessary changes in all spheres of economic, social and cultural development.
This ongoing process does not only have a cardinal end achieving sustainability in the food,
economic and environmental areas, but also for sufficient institutional flexibility, international
competitiveness and a new structure of relations between state and society.
Of the 313 approved guidelines, no fewer than 45 deal with the foreign sector, with
recommendations of measures to encourage exports and substitute imports. The latter is to
avoid expending more than one billion dollars to purchase products that can be developed in
the archipelago.
According to the Economist Intelligence Unit, the role of the market in Cuba is going to be
expanding in the years to come. The country's is an excellent business opportunity for anyone
who is willing to accept the challenge and to give it a try.
Doing business in Cuba comes with its specifics that are determined by the country's financial
system and local peculiarities. A number of companies from Europe, China and Canada in
particular are already having successful businesses operating in Cuba.
Cuban business is benefiting from the numerous infrastructure and social improvements that are
currently taking place. The state has invested in the improvement of the railroad system, the
construction of desalination plants and the tourism sector is seeing growth and support. All of
these characteristics determine the local business environment as a good opportunity that is
going to continue expanding through economic reforms that have recently started.
Naturally, tourism can probably be ranked as the most beneficial and profitable business in Cuba.
Official statistics for 2012 show that tourism has registered a 12 percent income increase in the
first quarter of the year. The country has also seen an increase in the number of visitors that
totals four percent.
Cuba has more than 300 hotels that offer employment to many and that are determining for the
Cuban business environment.
In 2011 and 2012, the Cuban government did undertake a series of economic reforms that
affected the local business environment in a positive way. The restructuring of the state

5. administration was the first one. In addition, the government accepted a number of reforms
stimulating the appearance of small businesses.
Some economy experts from across the globe state that Cuba has the potential to turn into the
"next China" in terms of economic and production capacity. The changes that have taken place
recently validate the claim and demonstrate that the country has a lot of potential that is yet to be
fully harnessed.
Foreign companies are successfully functioning in Cuba and according to many business
representatives, the time is right for others to enter the local business stage.
The French CoFace credit risk and investment company assessed the business climate and
environment in Cuba, coming up with a rather comprehensive and intriguing report. According
to CoFace, Cuba's biggest strengths include very skilled workers, the attractiveness of local
tourism landmarks, the availability of natural resources like nickel and oil, the good social
indicators, the agreement with Venezuela that ensures preferential oil import and the agricultural
production of sugar and tobacco among many others.
These trends and positive developments in 2011 are expected to continue throughout 2012. The
Cuban business environment is expected to become even more attractive, both for local
companies and for foreign entrepreneurs that are wishing to start operating in the country. Cuba
has tremendous potential and the state is showing its willingness to work on even better business
environment and opportunities.
For business aficionados, a big event coming up is the International Fair of Havana.
The International Fair of Havana celebrates in 2011 its 29th edition among great expectations
created by the start of a transformation and upgrading process in foreign trade and foreign
investment areas, in accordance with a group of new economic guidelines promoted by Cuban
authorities.
With an exchange nearing 10 billion dollars a year, Cuba's foreign trade has a relevant position
in the said guidelines, which were conceived to strengthen the country's response capability in
the present international situation, and after performing a meticulous diagnosis identifying
necessary changes in all spheres of economic, social and cultural development.
This ongoing process does not only have a cardinal end achieving sustainability in the food,
economic and environmental areas, but also for sufficient institutional flexibility, international
competitiveness and a new structure of relations between state and society.
Of the 313 approved guidelines, no fewer than 45 deal with the foreign sector, with
recommendations of measures to encourage exports and substitute imports. The latter is to avoid
expending more than one billion dollars to purchase products that can be developed in the
archipelago.