SESSION

A192

COURSE CODE

GFMA 2023

INTERNATIONAL BUSINESS

GROUP

GROUP F

TITLE

GROUP PROJECT

PREPARED BY:

NO. NAME MATRIC NUMBER

1. ANAS LUTIFI BIN OTHMAN LUTIFI 272491
2. MUHAMMAD AIDIL BIN ROZIZAN 262208
3. SYED MAZLAN BIN SYED RASHEED 272412
4. SYED MUHD SYAHIR BIN SYED ELLIAS 272395
5. RAJA MUHD AHLAMI RABBANI BIN RAJA RAMLI 262291
6. LUQMAN HAKIMI BIN ABD MANAF 270797
7. TUAN MUHAMMAD AFIQ BIN TUAN ALMADI 273795

TOPIC: THE IMPACT OF COVID-19 ON GLOBAL BUSINESS OPERATIONS

1. GEOGRAPHIC INFLUENCES
 We have selected Thailand as the country which is their business activities are based
on geographical influences factors. Thailand, a nation located in the middle of the mainland
of South East Asia. Located entirely in the tropics, Thailand encompasses a range of
ecosystems, including the hilly wooded areas of the northern frontier, the lush rice fields of
the central plains, the broad north-eastern plateau, and the narrow southern peninsula’s
rugged coastline. The landscapes of Thailand range from low mountains to lush alluvial
plains dotted with rice paddies to sandy beaches set amid Asian monsoon equatorial latitudes.
The country is divided into five distinct physiographical regions: the folded mountains in the
north and west, the north-eastern Khorat Plateau, the central Chao Phraya River basin, the
central maritime corner in the south-east, and the long, slender peninsular section in the
south-west.

One of the business activities based on the geographical factors of the Thailand is
tourism activities. Tourism comprises about Six per cent of the economy in the country.
According to the World Tourism Organization, Thailand was the most visited country in
South East Asia in 2013. The Chao Phraya River and the Mekong River are Rural Thailand's
heartbeats. Industrial plant development uses the river as well as the branches thereof. The
Gulf of Thailand is 320,000 kilometres and is bordered by the rivers of Chao Phraya, Mae
Klong, and Bang Pakong. The shallow water along the Kra Peninsula 's southern fringes
contributes to tourism industry. Thailand's tropical climate also puts tourism in its country in
good shape. Tourists can travel to Thailand at any time because of their rainy and hot climate
throughout the year.

Thailand's economic activity is also based on agriculture. Agriculture in Thailand

focuses on rice production in large quantities as Thailand is one of the major exporters of
rice. Flat surface factors as well as good drainage systems around the Mekong river and Chao
Phraya river have given rise to Thailand's agricultural sector. Thai agriculture can be traced
through the historical, scientific, and social aspects that produce a unique Thai modern
approach to agriculture. Following the Neolithic Revolution, the people of the region grew
out of hunting and collecting, through the "agro-cities" phase, and into the state religion of
the empire. Thai immigration brings a different approach to sustainable agriculture than any
other agricultural practice in the world.

Second, we have selected Brunei as the country which is their business activities are
based on geographical influences factors. Brunei is a nation in Southeast Asia situated on the
north coast of Borneo Island. Besides its coastline with the South China Sea, the country is
absolutely surrounded by the insular state of Sarawak in Malaysia. It is divided into two
sections by Limbang District of Sarawak. Brunei is the only fully independent state on
Borneo; the rest of the island's territory is divided between the nations of Malaysia and
Indonesia. The population of Brunei in 2018 was 428,963. Under the Sultan the government
is an absolute monarchy that applies sharia law and guides Islamic practices.

Brunei Darussalam is a small and wealthy region, with a mixture of foreign and
domestic entrepreneurship, government control and welfare, and village traditions. Its
economy relies almost entirely on crude oil and natural gas exports, with the petroleum sector
accounting for more than half of its GDP. The per capita GDP of Brunei reaches much of the
Third Worldwide, with comparatively high foreign investment income rising domestic output
income.

Brunei's position is protected from the Pacific's fiery coastline and is highly strategic
in preventing it from being hit by natural disasters such as earthquakes, tsunamis, and
volcanoes. This makes it easy for oil production or oil exploration activities in Brunei's
coastal waters to be easy to carry out. The area of Brunei's waters in the South China Sea is
500 square kilometres and 193 square miles of rich raw material such as Petroleum sources.
This led to the country becoming the third largest oil producer in Asia.

2. MAJOR PRODUCTS AND INDUSTRIES

A. MAIN NATURAL RESOURCES AND AGRICULTURAL PRODUCTS

The development policy of Brunei Darussalam is based on the principle of efficient use of
natural resources. His Majesty the Sultan of Brunei has placed great emphasis on
environmental protection and conservation. This resulted in the conservation of rainforest
which currently makes about 65% of the land area. There are several types of forest in Brunei
such as lowland forest and peat swamp forest. Mangrove forest are also widespread in
Brunei, especially along the country’s coast. In term of agricultural products, this once was
an important economic activity in Brunei but has declined in importance since the discovery
of oil in 1929. In 1947, more than 50% of the population was employed in agriculture but in
1971 had decreased to 10% (Franz, 1990). Increasing rice production was one of the
strategies that adopted to achieve self-sufficiency and to diversify the economy (Yakub,
2012). In 1970, farming was characterized by small sized family farm that average farm size
was 2.6 hectares and the main crops were paddy, rubber, sago, coconut, and pepper (Groome,
1978).

Thailand is a country that rich in natural resources which have played a significant
role in supporting local livelihood and driving economic growth of the country. There are
some natural resources that was found in Thailand such as coal, natural gas, gold, rubber,
limestone, and tin. For many years, Thailand was a major producer of tin. However, the
country currently focuses more on gold mining than tin. Natural gas also is one of the
major important natural resource in Thailand. Its deposits were discovered offshore in 1970
that can reduce Thailand’s independence on imported petroleum due to its high expenditure.
In Thailand’s agricultural products, rice is the most significant commercial crop grown in
Thailand. In fact, the country is among the world’s leading rice producers. Other crops grown
in Thailand include cassava, sugarcane, soybeans, coffee, pineapples, and coconuts. Thailand
produces around 2 million tonnes of palm oil in a year that making it stand out as the third
largest producer of palm oil in the world. The farms produce about 800 million coconuts
yearly and Thailand also is the second largest producer of sugarcane.

B. MAJOR INDUSTRIES
Brunei is among the richest countries in the world and much of its wealth comes mainly from
its oil and gas industries. The use of natural gas is mainly for the generation of power
production and town gas supply. The use of oil is primarily for variety of petroleum products.
Oil was first discovered in Brunei in year 1929 but its products for development as a major
export the most. In the early 1960, the oil and gas industries emerged as a dominant economic
sector for the country’s economic of growth. With a production capacity of 10,000 barrels per
day, the refinery produces sufficient oil to cater to the domestic oil demands in Brunei.

Electrical appliances are one of the major industries that has been produced by
Thailand. Thailand has manufactured about 40% of the world’s hard disk drive and it
continues to be the second largest exporter of air conditioners and washing machines. Among
other major export products include integrated circuits, broadcasting equipment, telephones,
computers and many other kinds of electrical appliances and equipment. Other than electrical
industries, automotive is another major industry that Thailand developed. In the lightweight
commercial vehicle sector, Thailand is the second largest in the world after the USA. The
automotive sector contributes 12% of Thailand’s economic growth. In 2019, Thailand
produced more than 2 million units annually with over 80% of all parts that have been made
locally. Car brands such as Toyota, Honda, Mercedes, Mitsubishi, Nissan, BMW, and Ford
have their major manufacturing facilities in Thailand.

C. MAJOR IMPORTS
Brunei’s import value in 2018 worth USD 4,164 million. According to the Harmonized
System 6-digit level (HS 6)1, Brunei imported 3538 products from 170 countries around the
globe. Most valuable imports to Brunei including petroleum oil, structures for architectures
and its engineering purpose, aircraft engines and spark-ignition reciprocating, tubes, pipes,
steel, motor cars and other motor vehicle and many more. In 2018, the petroleum commodity
and its category imported was equal to 269,669.80 million USD and become the most
valuable import transaction made in that year followed by the architecture structures (worth
USD 203,263.69 million) and aircraft engines with spark-ignitor (worth USD 114,277.44
million). Brunei’s biggest import partners in 2018 were China, Singapore, Malaysia, United
States, and Japan. Import from China worth USD 1,641 million with 39.42% of partner share
followed by Singapore worth at USD 574 million with 13.80% of partner share and Malaysia
at the third with the value of USD 551 million with 13.24% of partner share.

Thailand’s import value in 2018 worth USD 249,174 million. Thailand has imported
4476 products from 230 countries around the world. Most valuable imports to Thailand
including petroleum oil, gold in unwrought form, integrated circuit, and transmission
apparatus. Imported petroleum was the most valuable commodity with a value of USD
27,799,102.62 million, followed by the gold (worth USD 11,158,204.29 million) and
integrated circuit (worth USD 8,222,092.02 million). Thailand’s biggest import partner in
2018 was China, Japan, United States, Malaysia, and the United Arab Emirates. Import from
China worth USD 49,953 million with 20.05% of partner share followed by Japan worth
USD 35,260 million with 14.15% of partner share and United States at the third with the
value of USD 15,350 million with 6.10% of partner

D. Major Exports

1
Brunei’s export value in 2018 worth USD 6,574 million. Using the HS6 digit level, Brunei
exported 1905 products to 86 countries around the globe. Most valuable export from Brunei
including natural gas and liquefied, petroleum oils, methanol, and aircraft parts. In 2018,
natural gas became the most valuable export with the value of USD 3,278,272.43 million
followed by petroleum oils (worth USD 2,699,771.17 million) and methanol (worth USD
239,144.89). Brunei’s biggest export partner in 2018 was Japan, Thailand, Korea Republic,
Australia, and Singapore. Export to Japan worth USD 2,282 million with 34.72% of partner
share followed by Thailand worth USD 690 million with 10.49% of partner share and Korea
Republic at the third with the value of USD 615 million with 9.35% of partner share.

Thailand’s export value in 2018 worth USD 252,485 million. Thailand has exported
4,356 products to 229 countries around the world. Most valuable export from Thailand
including parts and accessories of automatic data processes, petroleum, integrated circuit, and
diesel-powered trucks. Exported parts and accessories of automatic data were the most
valuable commodity with the value of USD 17,336,849.67 million, followed by the
petroleum (worth USD 8,252,832.79 million) and integrated circuit (worth USD 7,865,940.73
million). Thailand’s biggest export partner in 2018 was China, United States, Japan, Vietnam,
and Hong Kong. Export to China worth USD 30,175 million with 11.95% of partner share
followed by United States worth USD 28,123 million with 11.14% of partner share and Japan
at the third with the value of USD 24,942 million with 9.88% of partner share.

3. ECONOMIC CONDITIONS
Brunei is the second smallest country in Southeast Asia and the only country that still
practices absolute monarchy in this region. Brunei is an old kingdom that once has controls
over the whole Borneo Island thus where the island name derived, and that also make it the
only sovereign state in that island bordering east Malaysia, Sabah and Sarawak to the north
and Kalimantan Indonesia to the south. Just like rich Arab kingdom in Arabian Peninsula,
Brunei is very rich and highly depend on its natural resources, oil, and gas and that make up
almost 90% of exports and contributed over a half to its GDP. Brunei GDP is 13.6 billion in
2018, not a big number but due to small population just a half of a million, its GDP per capita
is among the highest in the world account 31,628 USD. But this high per capita income does
not really mean it has a very good economic climate because the unemployment rates is the
highest in the region. IMF reported the unemployment rates is 9.25% in 2018, 0.25%
improvement from previous year. The government highly subsidies food and housing and
give free education and health care to the people, so the condition is quite good there. The
government subsidy is one of the reasons the highest percentage in unemployment rates
because fresh graduates want to fill in government sector rather than strive in public sector
that required more demand. Brunei currency, Brunei dollar is tied to Singapore dollar with
fixed exchange rate. Therefore 1 dollar is always equaling to 1.0000 Singapore dollar and
Singapore dollar is accepted for payments there. Brunei dollar to US dollar is 0.70 USD.
Brunei Darussalam inflation rate fluctuated substantially in recent years, it tended to decrease
through 1999 - 2018 period ending at 0.15% in 2018. Interest rate reported in 2018 was
5.188% pa, this records an increase from previous year with 5.184.

Thailand is one of the major hubs for tourism in southeast Asia which estimated that
sector contributed nearly 20% of its GDP. Even Thailand political climate is not stable and
always facing with military coup, its economy still thrives. Thailand GDP in 2018 was
505,928 billion, the second largest economy is ASEAN after Indonesia. GDP per capita was
7455 USD in 2018 compared with 6898 USD in 2017. The unemployment rate remained very
low in 2019 (1.1%) and is projected to maintain the same level in the coming years (IMF
data). Thailand's official unemployment rate is among the lowest in the world due to low
birth rate, lack of social insurance and informal sector employing the bulk of workforce.
Thailand currency is Thai Baht reported by Bloomberg as the world’s best performing
currency in 2018. Thai Baht to US dollar is 0.03 USD. In 2018, the average inflation rate
amounted to about 1.06% compared to previous year, when it was just recovering from a
slump below 0 percent mark in 2015. Thailand interest rate according to World Bank in 2018
was 1.75 an increase 0.25% from 2017.

4. CURRENT ECONOMIC CONDITION

Covid-19 virus continues to spread rapidly across the globe. Almost every country has cases
reported but the burden is distributed asymmetrically. The outbreak of coronavirus is
primarily a human tragedy which affects hundreds of thousands of people. This also has a
growing influence on the global economy.

First, some of Covid-19 effect on regional and global business operations in Brunei
and Thailand is slowing down the tourism industry. For Brunei, the tourism industry is
struggling to survive during this pandemic due to the dramatic decline in tourist arrival and
booking of hotel rooms. The Asian Development Bank (ADB) reports that the Covid-19
outbreak could lead to a decrease in tourism revenue for Brunei in the best cases scenario
(US$ 11.7mil), -0.113% in the moderate case (US$ 15.3mil) and -0.192% in the worst cases
scenario (US$ 26.1mil).

The best cases scenario is when, for two months, outbound tourism in Brunei dropped
by 50 per cent. There are no tourism receipts from the People's Republic of China (PRC) for
two months for economies which enforce travel bans. A mild case scenario is when
precautionary activities and prohibitions including travel bans begin to ease three months
after being imposed at the end of January. Meanwhile, the worst case is when, for six months,
outbound tourism dropped by 50 per cent. There is no tourism for economies which enforce
travel bans. Fallout from Chinese citizens' travel ban and suspension of flights to and to
China dramatically decreases the number of Brunei tourists. The ongoing Covid-19 outbreak
affects the emerging Asian economies across various channels, including rapid declines in
domestic demand, lower tourism and corporate travel, trade and supply linkages, supply
disruptions, and health effects.

Meanwhile, the outbreak in Thailand has affected not only travelers in Thailand but
also one of the main sectors in the region. In January, 3.81 million international visitors
traveled to Thailand according to Thailand's Tourism Ministry. Although their arrivals
suggested a rise of 2.46 per cent from last year's same period, the number of Chinese tourists
declined by 3.71 per cent, from 1.07 million to 1.03 million. Chinese tourists account for
Thailand's largest community of tourists. According to Thailand's Fiscal Policy Office, their
reduced arrivals were the product of the Covid-19 outbreak, which recorded a 1.1 percent
decrease in foreign tourist revenue in January. After the outbreak tourism operators have
reported a sudden decline in customers in the commercial district of Bangkok. The Erawan
Shrine on Ratchadamri Road, which is usually crowded with tourists, was nearly deserted.

Covid-19 's influence is also felt by hoteliers in the Thai capital. The Covid-19
outbreak has affected the consumer trust index, which dropped from 68.3 points in December
last year to 54.9 points in January, according to the Thai Chamber of Commerce. Concern
over Covid19's outbreak from China has affected the lives of people, businesses and the
future of Thailand 's economic situation, particularly its tourism sector. The blow to that
important leg of Thailand 's economy has come to the government at a terrible time. The
other two key economic legs that generate exports and agricultural commodities are already
wobbling as higher wages and an overvalued local currency has pushed investors into
cheaper neighboring countries such as Vietnam.

In addition, disrupting the supply chain network is also the effect of Covid-19 on
current economic conditions in Brunei and Thailand for regional and global business
operations. The epicenter of the network of supply chains for global business is declining
because foreign companies rely on China. Supply of assembly components and consumer
products are declining for global manufacturing operations and retail distributions. Covid-19
outbreak causes supply chains disruption due to the non-operation of certain industries in
Brunei and Thailand, such as automotive parts industries, pharmaceutical ingredients,
electronic components, medical equipment, and non-tech products such as sportswear, food,
and textile. Finally, the closure of plants, stores, businesses, and warehouses is causing
disruption to production operations worldwide. Disrupt transportation and logistics network
that prevents access to the biggest consumer markets to the world.
Suggest on how these economic conditions may attract or deter foreign investment

The current COVID-19 pandemic is causing unsteadiness in nations around the globe,
affecting general wellbeing frameworks, ways of life, and economies. Typically, this level of
impermissibility has suggestions for outside exchange and cross-outskirt exchanges. Before
the coronavirus episode in Hubei Province, China, toward the start of this current year,
Thailand was counts on huge outside direct venture (FDI) inflows to help finance its
monetary advancement plans. Be that as it may, as the emergency heads towards its local and
worldwide pinnacle, driving the administration to execute stricter measures, the fate of these
exchanges and by expansion, Thailand's monetary future is very dubious.

The emergency of COVID-19 is one that no individual, government, business, or

exchange could have expected and for which nobody was prepared. In this way, with next to
no confirmation given to financial specialists, it is plausible that most speculation decisions
and task usage will be deferred. Organizations may have acquired use in desire for FDI
inflows before the emission soon. It is trusted the administration would. The info bundle can
make it simpler to make up for a couple of this harm, yet the full impact is not yet clear once
more.

It merits repeating that Thailand is not the main country to experience the ill effects of
this. No created economy in Asia-Pacific, Europe or North America will rise out of this
pandemic. FDI inflows to the worldwide zone unit expected to decrease and can inevitably be
deferred. The most ideal situation is that COVID-19 is deferring, as opposed to upsetting,
further speculation and, at last, the financial change arranged as a component of Thailand 4.0.

Brunei 's incomes rely upon oil and gas trades, yet the episode of COVID-19 and the
decrease in worldwide interest will make Brunei experience a decrease in sends out in 2020.
When all is said in done, outside direct speculation FDI may give the capital expected to
business ventures, address joblessness, move of information and increment income from
corporate expense in the nation.
 FDI can raise a country's, the way of life, improve instruction and a serious market.
The solution for Brunei's exertion toward enhances economy may be Special Economic Zone
as it has been the foundation around the globe to pulls in and energize increasingly Foreign
Direct Investment. FDI will build the way of life of a nation, help instruction and a serious
market. The reaction to Brunei's endeavours to expand the economy could be the Special
Economic Zone, as it has been the world's foundation for pulling in and empowering
increasingly outside direct speculation.

Other than that, these nations will hold the flexibly chain running. A drawn out
pandemic flare-up may rapidly upset gracefully chains, including food flexibly chains, a
powerful system of associations including ranchers, rural items, preparing plants, circulation,
merchants and then some, just as gracefully chains of fundamental clinical supplies to keep
up the conveyance of basic clinical supplies. Any fare obstructions, including administrative
enactment and duty approach choices, will be checked to arrive at producers and clients.
Nations should strike the best trade-off between the longing to keep up yield running and the
need to secure nature, especially buyers and laborers of flexibly chains.
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