Essay on The Fragile Five: Effects on International Business

1344 Words6 Pages
South Africa, Turkey, India, Indonesia and Brazil become known as the Fragile Five because their economies are too dependent on foreign investment, which is forecast to decline this year (Thomas, L., 2014) The Fragile Five are a huge issue in today’s rising interest rates. The rising rates in these five countries are going to affect the world internationally. Should more countries be supporting the Fragile Five’s investment interests, or should they step back and allow the countries to sort it out for themselves?

Who are the Fragile Five
Who are the Fragile Five? The Fragile Five consists of five countries that in entering the progressive world. These countries consist of Brazil, India, Indonesia, South Africa, and Turkey who are
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Since the growth of the country had been so strong, the Central Bank tried to boost the economy by slashing interest rates, but they ended up making matters worse when they started to raise interest rates back up (Cascione, 2013). The interest rate has already hit 10.5% (Monaghan, 2014). Although the country is struggling, they have taken steps to combat rising interest rates, inflation, and to help keep the people from struggling.
The Indian rupee has become extremely unstable in the economy. Like Brazil, India is facing 6.1% inflation while its growth rate is sitting at 4.4% (Badkar, 2013). In order to curb the inflation, India banks have started buying oil in US dollars, while they sell it Rupees (Badkar, 2013). This allows them to make money off the sell rather than lose money from conversion. The country is still facing serious interest rates, as high as 8% (Monaghan, 2014).
Indonesia has been facing worker strikes due to increasing inflation, because of this; investors are pulling out of the country all together. The country has been facing “social unrest” and protests since the government cut fuel subsidies; prices for petrol and diesel (Monaghan, 2014). This is a problem because the government has put so many stipulations on their currency that it is difficult to sell their money and they are not making a profit as a country (Boyle, 2013). The country has
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