FACULTY OF BUSINESS AND MANAGEMENT

MARA UNIVERSITY OF TECHNOLOGY (UiTM)

CAMPUS SEGAMAT, JOHOR

DIPLOMA OF BUSINESS STUDIES (BA111)

SEMESTER OCTOBER 2021 – FEBRUARY 2022

INTRODUCTION TO INTERNATIONAL BUSINESS (MGT361)

MARKETPLACE EASTERN AND CENTRAL OF ASIA

PREPARED BY:
MUHAMMAD HAKIMI BIN ALAUDDIN (2019210636)
NAYLISA AMILIN SOFIA BINTI MOHD ROF (2019249364)
NUR FAIZAH BINTI HUSSEIN (2019205168)
ABDILLAH MU'AZ BIN MISNAN (2019243308)
MUHAMMAD ILYAS SYAHMI BIN SAHRIR (2019419242)

PREPARED FOR:
MADAM ZURINA BINTI OMAR

GROUP:
JBA1115D

DATE OF SUBMISSION:
16 DECEMBER 2021
TABLE OF CONTENT

NO. CONTENT PAGES

1.0 HIGHLIGHT THE COUNTRIES OF THE REGION 2 - 14

1.1 NATURAL ENVIRONMENTS
1.2 CULTURAL HISTORY
1.3 POLITICAL GEOGRAPHY
1.4 ECONOMIC GEOGRAPHY
1.5 GLOBALIZATION AND LOCAL CHANGE
1.6 TECHNOLOGICAL INNOVATION

2.0 TWO COUNTRIES TO HIGHLIGHT 15 - 26

2.1 DEMOGRAPHIC FACTORS
2.2 POLITICAL FACTORS
2.3 ECONOMIC FACTORS
2.4 GEOGRAPHICAL LOCATION ROLE PLAYED BY THE
COUNTRY IN GLOBAL MARKET
2.5 THE DO’S AND DON'TS OF DOING BUSINESS WITH
THE CHOSEN COUNTRY

3.0 REFERENCES 27-28

1
1.0 HIGHLIGHT THE COUNTRIES OF THE REGION

As we know, this earth has been around for millions of years. In the beginning, all

countries were under one continent but known as Gondwana. But as a result of the collision

between the sea plate and the sea plate, the collision of the ocean plate with the continental

plate and the collision of the continental plate with the continental plate caused this one large

continent to split and split which is getting farther and farther away as we can see today. As a

result, the emergence of 7 continents consisting of Asia, Europe, Africa, North America,

South America, Antarctica and Australia.

The image above shows the position of Eastern on a world map consisting of three

overlapping cultural blocks: South Asia (Orange), Southeast Asia (Blue) and East Asia

(Green). Eastern World or as East is a term for various national structures, social structures or

even philosophical systems, which vary depending on each context. It at least covers most of

the countries and cultures of eastern Europe, the Arab world and the Mediterranean region. It

is often said to be similar to the Western world, and has a strong connection with the southern

part of the North-South part. Many of the territories included in the term are altered, difficult

to generalize and do not have a common shared heritage. Although the Eastern world shares

many things in common, especially those in the Global South where they have never

generally characterized themselves collectively. This term originally had a literal

geographical meaning, which refers to the eastern part of the Old World, which distinguishes

between Western European cultures and civilizations with Asian civilizations. Typically, this

2
includes all of South Asia, Central Asia, the Greater Middle East, Southeast Asia and the

Southeast.

The picture above shows the position of the Central Asian region on the world map.

Central Asia could be an area in Asia that extends from the Caspian Ocean in the west to

China and Mongolia in the east, and from Afghanistan and Iran in the south to Russia in the

north. It is also referred to as "stans" because all countries in the region have names ending in

the Persian end "-stan", which means "land". According to history, Central Asia has a

connection with the trade route in ancient times , the Silk Road, which served as a crossroads

for the movement of goods shipments.

Central Asia was colonized by Russia in the mid-19th century resulting in its

incorporation into the Russian Empire, and later the Soviet Union, which led to Russians and

other Slavs migrating to the area. Today, Central Asia is home to a large population of

European pioneers, who generally live in Kazakhstan consisting of 7 million Russians,

500,000 Ukrainians and about 170,000 Germans. The Stalinist-era forced eviction order

moreover meant more than 300,000 Koreans lived there.

3
1.1 NATURAL ENVIRONMENTS
Each country has a different natural environment. In China, rapid industrialization,

populace growth and remiss natural oversight have caused numerous natural issues. As of

2013, Beijing which lies in topographic bowl, has critical industry and warms with coal, is

subject to air inversions resulting in greatly high levels of contamination in winter months.

There are six fundamental categories of natural issues of China according to Jared Diamond

which discuss contamination, water issues, soil issues, territory destruction, mega projects

and biodiversity loss.

In Japan, their culture contains a long history of finding an adjustment between

environmental protection and economic development. Over the nation, there are numerous

extraordinary sights where one may see the coexistence of human daily life and nature. With

a wide range of climatic zones and geographic highlights, people in several areas create their

own specific way of adjusting local culture to nature.For example, “onsen” Culture and

Japan’s hot spring. The Japanese archipelago was made on the Pacific Ring of Fire by

tectonic plate development. This caused the volcanoes to grow over the nations, which

brought within the creation of numerous hot springs. In turn, this gigantic number of hot

springs has given birth to an onsen culture that can be traced back many years.

The environment of Kazakhstan has been severely harmed by human action. Most of

the water in Kazakhstan is contaminated by mechanical effluents, pesticide and fertilizer

buildup, and in a few places, radioactive components. Next, wind disintegration has moreover

affected the central parts of the republic since the introduction of wide scale dry-land wheat

cultivation. Amid the 1950s and 1960s, much soil was lost when tremendous tracts of

Kazakhstan's prairies were plowed beneath as portions of Khrushchev's Virgin Lands rural

extend. By the mid-1990s, an estimated 60 % of the republic's pastureland was in different

stages of desertification. The current issues that happen at Kazakhstan are radioactive or

poisonous chemical locales related with its previous defense industries and test ranges are

4
found all through the nation and pose health dangers for animals and humans. Industrial

contamination is extreme in a few cities; since the two primary waterways which streamed

into the Aral Ocean have been redirected for irrigation, it is drying up and drying out behind a

hurtful layer of chemical pesticides and characteristic salts; these substances are at that point

picked up by the wind and blown into harmful clean storms; contamination within the

Caspian Ocean; soil contamination from overuse of agrarian chemicals and salination from

destitute framework and inefficient water system hones.

5
1.2 CULTURAL HISTORY
Culture shaped the nation. It was being inherited from years of generations. Having

said that, not all cultures shall be retained, especially bad culture and history. Here, we are

going to describe the Eastern and Central Asia culture which has been practiced for a long

time in their society. There are five countries of Central Asia such as Kazakhstan,

Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan. Firstly, People from Kazakhstan are

descendants of indigenous Turkic, Mongol, and Indo-Iranian peoples, as well as the Huns.

The Kazakhs are said to live in a region that runs from Siberia to the Black Sea in the west.

Most people in Kazakhstan are Muslims, Christian and other religions such as neo-Paganism,

Tengrism, Shamanism and Animism. In addition, The Kazakhs have such a unique hunting

tradition. According to several reports, this tribe hunts using a tamed golden eagle.

Besides, Kyrgyzstan is a multi - ethnic country, which creates conflict between

different groups and within groups. In Central Asian communities, there are two sorts of

marriages. The first one is exogamous and prohibits a young man or woman from marrying a

fellow believer until they are up to the 7th knee. On the other hand, another type of marriage

is endogamous, and it refers to Tajikistan, Turkmenistan, and Uzbekistan. Plus, Central Asian

countries are the oldest regions of the Sufism tradition or mysticism.

Next, East Asia is one of the world's oldest civilization centers because of its unique

culture. Thousands of years ago, the East Asian region grew rapidly, influencing the

dynamics of civilization in the surrounding region indirectly. Firstly, each country in East

Asia has a similar belief system, with people believing in animism, natural balance, spirit

beings, etc in the past. For instance, in Chinese beliefs, the reality of harmony between the

life of heaven and the life on earth is always returned. Besides, in Japan, there is the belief of

Shinto (‘’The way of God’’), a belief that respects the natural world or reverence for things

considered sacred such as the sun, rocks, trees, etc. Mugyo's beliefs in Korea are like Shinto's

as well.

6
 Furthermore, East Asian cultures, including architecture, literature, drama, etc. have

been strongly influenced by Buddhism. Art is one of Japan's oldest and most encompassing

values. From the ancient Jomon era to current hybrids combining Asian, European, and North

American influences, Japanese culture has developed over a millennium. Moreover, Chinese

culture has inspired almost all works of art, including architecture, literature, and painting.

During the Three Kingdoms era, trade and diplomatic visits by Chinese imperial envoys

played a significant influence in the diffusion of native Japanese culture to Chinese culture.

Next, as for language, Chinese (hanyu) is from the Sino-Tibetan language. Ancient Chinese

language was used during the Zhou Dynasty. The Chinese language has a major influence on

East Asian languages ​including Korean, Japanese, and Vietnamese. Korea and Japan have a

writing system that uses Chinese characters (hanzi), such as Hanja (Korea) and Kanji

(Japan).

Next, Mongolia, which has its own land, has a distinct culture that is strongly

influenced by its people's traditional nomadic lifestyle. Although Chinese, Indian, and

Russian cultures have influenced the culture, it still has its own distinct identity. Since it was

fitted to the severe climate and lifestyle of the inhabitants, Mongolian’s attire has not changed

much over the centuries. The traditional attire of the people is the deal or kaftan. Mongolian

art is also admired for its beauty and uniqueness. Before the 20th century, the majority of

Mongolian's art served religious purposes. Mongolia's most popular art form is Thangkas, a

type of painting. Large quantities of bronze Buddha carvings were also produced. Thus, it is

clear that there are many different cultures in the regions of Eastern and Central Asia.

7
1.3 POLITICAL GEOGRAPHY
Political geography has a long history as a systematic branch of human geography, but

it is not always distinguished. The exact definition of political geography, like that of other

branches of the discipline, is elusive due to the nature of the discipline, the issues explored,

the approaches taken, and the methods used to display considerable breadth and diversity.

Political geography is concerned with the study of both the spatially uneven outcomes of a

political process and how spatial structure influences the political process itself. While being

careful not to oversimplify, political geography is concerned with the intersection of politics

and geography.

Political systems are transitioning from the socialist policies of the former Soviet

Union to new democratic systems that are subject to high levels of authoritarian rule and

corruption in business and politics. Kazakhstan, Uzbekistan, Turkmenistan, Tajikistan, and

Kyrgyzstan were all part of the former Soviet Union until its dissolution in 1991. They are

now independent countries that comprise the Central Asian region, along with Afghanistan.

Uzbekistan, for example, is the land of the Uzbeks, as the term stan means "land of." Because

of the Turkish influence in the region, Central Asia is also known as Turkestan. Turkey's

people did not come from the Middle East; rather, they came from northern Asia. On their

way to the Middle East, they swept through Central Asia and dominated the region. The

Turkish language and culture have had the greatest influence on the people of Central Asia.

Turkmenistan's name, which means "Turkmen land," is another reminder of the Turkish

connection.

The vast steppes of Central Asia were home to nomadic peoples who rode horses and

herded livestock. This way of life persisted until the 1920s, when the Soviet Union forcibly

relocated many groups to collective farms and cities. The majority of Central Asians still

identify culturally with their nomadic past. Because of the large influx of Russians, Central

Asians living in cities frequently exhibit a mix of local and Russian culture in terms of dress

8
and food. During Soviet rule, more than six million Russians and Ukrainians were resettled in

Central Asia. Russian is frequently used as a common language. Religious practices are one

of the primary ways in which people distinguish themselves culturally. Despite the fact that

the area was part of the Soviet Union, where religious activities were discouraged, Islam was

and still is the dominant religion. The majority of Muslims in Central Asia are Sunnis.

9
1.4 ECONOMIC GEOGRAPHY

Each of the countries have their own unique economic system. It has been

distinguished on how the country governed their economic development. Hence, we are

going to describe how East and Central Asia's economy has been governed up until today.

Firstly, in Central Asia, the most profitable and successful country in terms of economic

indicators is Kazakhstan. Kazakhstan’s main sources of income are oil and mineral mining, as

well as the engineering and metallurgical industries. Other than that, Kazakhstan is the only

country on the continent where agriculture is growing at an incredible rate.

Besides, the economic in Kyrgyzstan is highly dependent on its natural resources and

agricultural sector. Aside from agriculture, the mining industry is also important for Kyrgyz's

economic such as gold, cotton, wool, etc. Next, the Republic of Tajikistan is one of the

poorest countries in terms of economic indices, despite its huge potential. Tajikistan's

mountains are rich with varieties of minerals. Turkmenistan is one of the fastest growing

economies in the world. The extraction and exploitation of natural resources such as natural

gas and petroleum are important to Turkmenistan's economy. Lastly, Uzbekistan is a country

that have a rich oil, gold, uranium, and natural gas. The country's economy is based on the

production of raw materials, primarily cotton.

Next, East Asia is one of the fastest growing regions in the world with Gross

Domestic Products (‘’GDP’’) of around $19 trillion. China is the second largest economy

respectively and contributes to the growth of the region. Besides, China's economy is

dependent on a variety of natural resources, such as fisheries, agricultural land, minerals,

gold, charcoal, etc. Agriculture is important to China's economy since it generates a large

amount of money to the country's GDP. As compared to China, Taiwan's manufacturing

sector is more developed, and it generates high revenue for the government. Next, Hong

Kong has been the most competitive economy in the world for a long time. Hong Kong has a

10
variety of advanced industries, including power engineering, building materials production,

electronic and electrical engineering, food production, printing, etc.

Furthermore, the economics of Japan is highly developed and market oriented. It is

the third country that has the largest nominal GDP. Agriculture is important in Japan and

contributes to around 1.4% of the country's GDP. Not only that, but other major industries in

Japan also include mining and petroleum exploration, and many rare earth elements play an

important role in economics. Then, as for Macau, its economy is based on tourism, textiles,

and other industrial production. Macau also has a free trade economy and a free port policy.

Moreover, Mongolia is a country with a transitional economy that has been rapidly growing

recently. The country’s economy is dependent on agriculture, livestock, mining, etc. Mining

contributes about 20% of Mongolia's GDP, making it the country's most important industry.

Other than that, textiles, fabrics, wool, leather, cowhide and fur, meat processing, and the

manufacturing of building materials are the main industries in Mongolia's economy.

Lastly, North Korea’s economy is centrally planned, although there have been some

slight improvements from 2015. There have been reports that North Korea has experienced

major economic reforms, especially when Kim Jong-un, North Korea’s president took the

lead of the country in 2012. Its primary industries include food processing, textiles, coal

mining, magnesite mining, limestone mining, and more. These industries are the major

contributors to the country's GDP. While in South Korea, the Chaebol family conglomerate

dominates South Korea's economy, which is a highly developed mixed economy. This

country has the fourth largest GDP in Asia and the world's twelfth largest. In 2014, South

Korea was the world's seventh largest exporter and importer, owing to its export-oriented

economic strategy. In conclusion, it is clear that the countries in East and Central Asia are

becoming more economically advanced from time to time.

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1.5 GLOBALIZATION AND LOCAL CHANGE

Globalization refers to the acceleration of global movements and exchanges (of

people, goods and services, capital, technologies, and cultural practices). One of the

consequences of globalization is that it encourages and expands interactions between

different regions and populations around the world. Globalization is defined in geography as

the set of processes (economic, social, cultural, technological, and institutional) that

contribute to the relationship between societies and individuals worldwide. It is a progressive

process that intensifies exchanges and flows between different parts of the world.

According to a 2010 US government report, American geologists and Pentagon

officials discovered vast amounts of mineral wealth in Afghanistan. Afghanistan has massive

deposits of iron, copper, gold, cobalt, and rare industrial minerals such as lithium. Total

reserves are unknown or have not been released, but if extracted, the country would benefit

economically by trillions of dollars. Lithium is in high demand and is used in the production

of batteries, computers, and electronic devices. According to the report, Afghanistan has the

potential to become the world's leading mining country.

The discovery of vast resources helps to put the Afghan war in context in terms of

global competition for resource control. According to reports, China has already offered

millions of dollars in incentive money to Afghan government officials in exchange for

allowing its country to mine copper. Bribery and corruption in the Afghan government are a

serious impediment to a stable political environment, but criminal activities are expected to

persist and grow in response to the prospect of additional mining wealth. Afghanistan does

not have a long history of mining. Agriculture has traditionally been the primary source of

economic activity in rural communities. Afghanistan's future will be altered by the discovery

of new mineral wealth. It will be fascinating to see how Afghanistan responds to and benefits

from the discovery of previously unknown resources.

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1.6 TECHNOLOGICAL INNOVATION
Technological innovation aims to improve an existing product or introduce a new

product or process with new technological characteristics to distinguish it from competitors.

When they are introduced into the market, they are considered innovative and work to the

benefit of the enterprise or the general public.

When it comes to innovation, countries in Central Asia face challenges that fall

somewhere between a horse cart and a self-driving car. In some parts of the region, people

still use horse carts to get around, whereas in others – sometimes even within the same

country – people are thinking about how to produce autonomous vehicles locally. To address

these issues, government officials, researchers, entrepreneurs, and representatives from

various International Financial Institutions (IFIs) convened to identify regional innovation

and technology challenges, translate uncertainty into opportunity, and learn from regional and

global experiences. There is plenty of evidence that innovation and the adoption of existing

technologies can boost economic growth. It has been demonstrated that innovative firms

grow at a faster rate 15% faster in sales and 8% faster in labor productivity. The first task for

policymakers is to create an ecosystem that will unleash the potential for innovation.

Policymakers can use a variety of tools, including innovation grants, matching grants,

venture capital, equity funds, and loan guarantee schemes. The key to selecting the best mix

is to find evidence of what works and what doesn't. These initiatives address a wide range of

issues, including increasing the innovative activities of firms and individuals, promoting

high-quality, nationally relevant research and commercialization of technologies in

Kazakhstan and Serbia, and assisting countries in the Western Balkans in developing a better

innovation ecosystem.

Using R&D data as well as patent and patent citation data, we investigated the very

rapid growth in domestic innovation efforts in East Asian countries such as Korea, Taiwan,

and China. They also used the World Bank's Investment Climate Survey to look into the

13
sources of technological innovation in other East Asian economies with middle- and

low-incomes. They then evaluated the role of three major channels for knowledge flow to

East Asia: international trade, knowledge acquisition without a body, and foreign direct

investment. Estimating international knowledge dissemination models using patent citation

data reveals that, while East Asian innovations continue to rely heavily on knowledge flows

from the United States and Japan, citations to the same or other East Asian economies are

rapidly increasing, indicating the emergence of national and regional knowledge stocks. as a

foundation for innovation.

14
2.0 TWO COUNTRIES TO HIGHLIGHT

2.1 DEMOGRAPHIC FACTORS

Demography or populace science is a part of science that concentrates on the

changeability of human populaces. Socioeconomic incorporates the size, design, and

conveyance of the populace, just as how the populace changes after some time because of

birth, demise, movement, and maturing.

The table above shows the population of Kazakhstan in 2019 and 2020. The United

States International Census Bureau's global information base records Kazakhstan's population

as 18.9 million for 2019, while United Nations sources starting at the 2019 amendment of the

World Population Prospects gives a gauge of 18,319,618 individuals. In 2018, ethnic

Kazakhstan made up 67.5% of the populace and individuals of Russian descent in

Kazakhstan made up 19.8%. Different gatherings incorporate Tatars (1.3%), Uzbeks (2.8%),

Belarusians, Uighurs (1.4%), Ukrainians (2.1%).

Kazakhstan is formally a bilingual country. Kazakhstan, which belongs to the

“Kipchak” family of Turkish languages spoken natively by 64.4% of the population, has the

status of a "state" language, while Russians spoken by most Kazakhstan, considered an

"official" language, and is widely used. “Kipchak” is one of the ancient Turkish peoples. In

business, government and inter-ethnic communication, although Kazakhstan is gradually

replacing it.

Kazakhstan is a common state. As per the 2009 Census, 70% of the populace is

Muslim, 26% Christian, 0.2% Buddhist, 0.1% different religions (for the most part Jewish),

and 3% skeptical, while 0.5% decided not to reply. Obligatory instruction universalization

such as bringing down auxiliary school and grown-up proficiency rate is 99.5%. are

considered and comparable to those for ladies and men in Kazakhstan. Schooling comprises

three fundamental stages: essential training (forms 1 to 4), general fundamental instruction

15
(forms 5 to 9) and advanced education (forms 10 to 11 or 12), partitioned into proceeding

with general instruction and professional training. Professional schooling normally keeps

going for three or four years.

Kazakhstan is different from the country in Eastern, namely Japan. When

industrialization began in 1897, the population was over 42 million. From 1898 to 1918, the

growing industrial and mining towns embraced a large population, as did Hokkaido and

rural silk moth producing areas. Other than that, the population distribution in Japan is very

diverse. Due to the mountainous nature of the country, the population is concentrated in

limited plains and lowlands, especially on the Pacific coast. However, the population growth

there was absorbed by the expanding urban areas, and the rural population decreased sharply

as they moved to urban areas which is mostly due to employment factors. This had the effect

of further concentrating the population in a limited area.

When the first accurate census was conducted in 1920, the population was about 57

million. From 1919 to 1945, Tokyo Yokohama (Keihan), Osaka Kobe Keihanshin

(Keihanshin), Nagoya (Chukyo), and Northern Kyushu became the four most important

industrial areas of the country. At the same time, some small cities have lost the ability to

feed an increasing population and some have declined. By 1940, the population had more

than doubled compared to 1868. However, during World War II, there were large-scale

migrations to rural areas to avoid air raids. Some cities, such as Saka, have been reduced to

one-third their previous size. Since 1945, unusually high growth has been seen due to the

repatriated population of about 9 million and the sometimes explosive rise in fertility.

Post-WWII Japan's notable demographics World War II showed a significant

reduction in the percentage of fertility and mortality as well as a significant increase in the

percentage of health due to the absence of children in the family. Japan's population growth

slowed dramatically in the second half of the 20th century and was essentially stagnant in the

16
first decade of the 21st century. At the end of the last decade, Japan recorded one of the

lowest birth rates in the world and one of the highest life expectancy in the world, but

recorded an annual net loss of population. As a result, the country faced the dual problems

of a declining population and a rapid aging population. This situation could also lead to a

serious labor shortage in a huge economy. In an era of labor shortages, at least the need for

less skilled jobs was met by more and more foreign temporary workers, but such agreements

were interrupted by the recession rice field.

17
2.2 POLITICAL FACTORS

Every country must have good political factors in order to govern the system and

stabilization of its countries. This political factor is one of the factors that will contribute to

the progress of the country's economy. As for the focus of this discussion, we would like to

highlight Kazakhstan (Central Asia) and Japan (East Asia) as these two countries are among

the politically developed countries, which lead to fairly stable countries' development.

Starting off with Kazakhstan (“Kazakh”), where this country is being chosen as this

country is the richest and most economically developed among all Central Asian countries.

The country is led by a President as the Head of State and President of the military. He is

fundamentally answerable for homegrown and international strategy and addresses Kazakh in

worldwide relations. Kazakh is being segregated with fourteen (14) districts and the localities

are separated into 177 areas for each of governance. As one of the countries that practices

democratic and secular belief, they recognise the man, his life, rights and freedoms as the

ultimate values of the country.

The Government of Kazakh implementing the executive powers that heads the system

of the bodies and supervision for the activities, whilst for their Parliament, they are

performing legislative functions, which consist of two (2) Chambers; (i) the Senate; and (ii)

Majilis. The Senate is composed of 2 representatives of each region in Kazakh and fifteen

(15) deputies which are appointed by the President that abides with equal representation of

national and cultural as well as other significant interests of the society. The service terms are

six (6) years. On the other hand, Majlis has 107 deputies where nine (9) of them were

selected by the Assembly. The service terms are five (5) years. The dominating parties at

Majilis are “Nur Otan” People’s Democratic Party, “Ak Zhol” Democratic Party of

Kazakhstan and Communist People’s Party of Kazakhstan.

18
 Having said that, Kazakh is practicing a unique symbiosis of business culture that is

highly affected by the political circumstances in their country. Post-Soviet Union era,

Kazakh’s political elite and big business relationship is quite tight, which means that it is

more on the mutual beneficial partnership between the entities of different kinds (Kjærnet &

Torjesen, 2008). This also means that, if a company would like to venture or get involved

with international business in Kazakh, they need to approach the highest rank of the country

as doing business in Kazakh means it shall be vulnerable toward the political elite. Not only

that, the success or failure of any business will highly depend on the extension of the

business’s access towards the government’s resources, for instance land and permits. If the

companies are facing the challenges of the institutional environment when doing business in

Kazakh, good government connections may aid in mitigating the issues. From here, we able

to analyze that when the government would like to interfere with the business transactions, it

may portray that the government would like to have extended level of political controls over

the business, which may lead to lots of hurdle to the business owners as they may need to pay

more that what they should in order to accommodate the needs of the government’s interest.

Nevertheless, it can be seen as the toll gate for the company in order to establish their

footprint at Kazakh and survive longer in the market.

On the other side of the story, Japan is being chosen as it portrays lots of unique

cultures that shape their own identities from their ancestors, which remains up until today.

Japan was ranked number two (2) among East Asian countries based on the generation of

Gross Domestic Product (“GDP”). Japan is one of the unique countries in the world as it uses

democracy, parliamentary system, unitary state as well as constitutional monarchy as their

political system. In other words, Japan is practicing multi-party bicameral parliamentary

representative democratic constitutional monarchy, where the Emperor is the Head of the

State whilst the Prime Minister is the Head of Government as well as Head of Cabinet

19
(executive branch). This practice commenced after the end of World War II, which was

closely similar to the United Kingdom, maintaining the long-standing monarch and imperial

family as honorary figureheads in the country.

The Emperor’s duty is more ceremonial duties, including but not limited to

appointment of Prime Minister and Chief Justice of the Supreme Court as well as presenting

the awards from the Government of Japan. To add, the Imperial family also serves as the

ambassadors of Japan, entertaining the diplomats as well as foreign visits from abroad. On

the other hand, to be selected as the Prime Minister in Japan, they need to be part of the

National Diet, where the members of the National Diet will appoint their party leader, which

is likely to be the Prime Minister for Japan. The National Diet consists of the upper house of

The House of Councilors and lower house of The House of Representatives, which National

Diet is considered as the highest level of state power in the country.

Japan is practicing seniority in their business ethics, which they highly respect the

elders and may only be the “yes-man” material when the elderly already made any decision.

This has made the Japanese unable to speak of any wrongdoings. Those that wanted to

venture Japan as a new business hub may send the highest ranked in their circle to deal with

the authority or senior management of Japan in order to ensure they are able to penetrate the

market successfully.

20
2.3 ECONOMIC FACTORS

Economic factors also may lead to good marketplace conditions. These economic

factors in Japan and Kazakhstan play a role in enhancing the stability of their countries. Most

countries have the same factors but in different ways.

Kazakhstan is also showing good economic conditions. Kazakhstan is the largest

country and the most developed in Central Asia in terms of per capita. Kazakhstan has

attracted more than $ 370 billion in foreign investment since independence after the collapse

of the Soviet Union. This has also shown that the economic situation of Kazakhstan is in a

favorable state. Kazakhstan has the biggest and best performing economy in Central Asia.

Kazakhstan's economy developed by a normal of 8% yearly until 2013, upheld by rising oil

creation and rising costs. Kazakhstan was the principal of the previous Soviet Republic to

reimburse all obligations to the International Monetary Fund seven years sooner than

arranged.

Due to soaring global oil prices, GDP growth was from 8.9% to 13.5% between 2000

and 2007, but fell from 1 to 3% in 2008 and 2009 and has risen again since 2010. Other

major exports from Kazakhstan are wheat, textiles and cattle. Kazakhstan is a major uranium

exporter. Kazakhstan trades 800 items to 120 nations. They also have grains, potatoes, grapes,

vegetables, melons and cows as the agricultural ingredients.

Japan's economy ranks third in the world in terms of nominal GDP and fourth in

purchasing power parity (PPP). Japan is also ranked the second country with economic

development in the world. According to the International Monetary Fund (IMF), the country's

GDP per capita (PPP) was $ 41,637 in 2020. Japan's per capita GDP is estimated at around $

39,048. This has shown that the Japanese marketplace is in a very good position. Because of

variances in return rates, Japan's GDP vacillates essentially when estimated in dollars.

Considering these changes when utilizing the Atlas technique, Japan is assessed to have a for

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each capita GDP of roughly $ 39,048. The Japanese economy is gauge by the Bank of Japan's

quarterly short-view business feeling overview.

Japan is the world's third largest auto producer and one of the biggest gadgets’

ventures. As the competition with China and South Korea escalates, Japanese assembling is

as of now centered basically around cutting edge and accuracy items like optics, mixture

vehicles and advanced mechanics.

Japan was additionally the world's second biggest economy later the United States as

far as ostensible GDP. At this low development rate, Japanese government securities have

extended because of the enormous measure of social spending in a maturing society where

the assessment base is contracting. The "neglected house" situation keeps on spreading from

provincial regions to metropolitan regions in Japan.

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2.4 GEOGRAPHICAL LOCATION ROLE PLAYED BY THE COUNTRY IN

GLOBAL MARKET

East Asia and Central Asia are the regions that consume a large amount of Asia’s

continent geographically. As chosen, Japan and Kazakhstan are playing humongous roles in

the global market directly and indirectly.

Firstly, let’s focus on the role played by Japan in the global market. Post World War II

has witnessed Japan of its advancement of recovery both politically and economically, which

makes them one of the nations that is respectful among all walks of life. Japan is highly

well-known for its research & development (“R&D”) where they inculcate the R&D culture

among their nations to get the accurateness of the outcome for the betterment of lives. This

has become one of the major roles as other countries including Europe have perceived Japan

as one of the nations that is really developed and standing on par with them as compared to

China. This determination of R&D may take up to 70 years, like what we have for Yakult by

Dr Shirota, a microbiologist developing Yakult for the betterment of guts, which nowadays is

able to be enjoyed by everyone. Not only that, Japan is highly supporting R&D by even

establishing the Japan International Cooperation Agency (“JICA”), where JICA becomes the

arm for R&D internationally, where it is fully funded by the Government of Japan, to aid the

R&D development and projects. From here, we can see that there are lots of improvements

from the R&D done by Japanese, which have impacted not only Japanese but other races as

well, especially in their daily life.

To add, Japan is an important member of the international trading system and has a

market that respects the rule of law and strongly protects intellectual and physical property

rights. Japan's consumer economy is large, diversified and highly developed. Japan is heavily

dependent on the import of natural resources. For example, they are one of the largest net

purchasers of food in the world. Imports of goods from Japan have exceeded $ 142 billion

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and imports of services exceeded $ 37 billion, for a total of $ 179.1 billion, an increase of

4.5% over the previous year. One of Japan's main imports are automobiles, automobile parts

and electronic devices. Japan's rapid aging population, which has begun to decline overall,

continues to impact society and the economy, shaping current and future demand in diverse

sectors such as robotics, pharmacies, franchises and real estate. Japan's strategic alliance and

deep economic integration with the United States offer opportunities in advanced areas such

as space, defense and security. Japan is a major importer of US aerospace and defense

equipment and an increasingly integrated developer. Related growth sectors include defense

procurement, advanced manufacturing and cybersecurity solutions.

Next, the role played by Kazakhstan. Kazakhstan has an export-oriented economy that

relies heavily on the supply of oil and related products (73% of total exports). In addition to

petroleum, the most important exports include iron metals, copper, aluminum, zinc and

uranium. Italy, China, Netherlands, Russia and France are one of the most important export

destinations. The others are Switzerland, Ukraine and Canada. The United States accounts for

1.6% of Kazakhstan's exports. Despite the ongoing global economic crisis as a result of the

Covid-19 pandemic, Kazakhstan is Central Asia's largest economy and a country with many

unmet potentials. The latest economic information, the Kazakhstan economy, is expected to

shrink by nearly 3.0% in 2020 as commodity prices fall, trade falls and Covid-19 precautions

slow economic activity. Weak consumer demand, low oil prices, and an ongoing pandemic

put Kazakhstan's economic outlook at significant risk. A gradual recovery of 2.5% in GDP is

projected in 2021, although uncertainties about the course of the pandemic have distorted the

risk downwards.

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2.5 THE DO’S AND DON’TS OF DOING BUSINESS WITH THE CHOSEN

COUNTRY

Do’s and don’t s is an aspect to form the value of the people in business, where the

people need to follow the practices for their own safeguards and survivals.

Let’s focus first on the practices in Japan. The do’s in Japan that shall be described

here are people need to be on time, learn about Omiyage rituals and be well-groomed on the

formal. Firstly, people need to be on time. Time is considered a golden rule in Japan. Do not

be late as it will be considered blatantly rude in Japan. Secondly, learn about Omiyage rituals.

Providing appreciation to other people by giving the goods is another long-standing and

highly ceremonial practice in Japan. Taking your time to choose on which gifts that are

suitable to be given to your business partner. Lastly, be well-groomed on the formal. With a

few exceptions, Japanese professional attitudes are more conservative or formal, where it is

recommended to wear dark, plain suits, minimalist accessories, clean shoes, nice bags and

well-groomed hair.

On the other hand, the don’t s in Japan are do not express negative emotions

outwards, do not be rude and stay humble as humility is a virtue and do not make excuses.

Firstly, do not express negative emotions outwards. The Japanese perceived that it is

immature if the emotions are negatively expressed openly, as it may be considered as the sign

of lack of self-control. Even if you're upset, it is best to put up your best poker face and speak

calmly. Secondly, do not be rude and stay humble as humility is a virtue within Japanese

society as it can even lead to self-irony. Lastly, if you cannot live up to your expectations, it is

best to just apologize. For example, ‘we apologize for any inconvenience and declare that we

will work to resolve the issue’.

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 Now, let’s focus on Kazakhstan. The do’s in Kazakhstan are using business cards is

very important, practices of local culture and Islamic holidays and prefer to use social

networks. Firstly, using business cards is very important and it is best to give your business

card right away during the first meeting. Secondly, Kazakhstan prefers the practice of local

culture and Islamic holidays. It will be respected if you know a bit of history and a few words

in the mother tongue. For example, the usual greeting is Salam Aleikum. Lastly,

Kazakhstan’s people much prefer to use social networks as a medium for connection. More

and more entrepreneurs prefer to use social networks like Facebook, LinkedIn as well as

WhatsApp, Messenger or Telegram. It will be much easier for them to sell and deal with

businesses. On the other hand, the people in Kazakhstan do not expect English to be spoken

widely as many societies there speak Russian and not practicing English as one of the

common languages in daily lives. Besides that, do not expect all Eastern cities to be the same

because not all of them are practicing the same value of business ethics. Different countries

may practice different cultures and values of business ethics, which are influenced mainly by

the macroeconomic factors within the countries, thus the practices may be different

depending on the countries.

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11. MCKENZIE, B. (2019). Doing Business in Kazakhstan. Retrieved from

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