Wars and Insurrection
Wars and Insurrection
Military conflicts disrupt traditional international business patterns as partic-
ipants divert their transportation systems and much of their productive ca-
pacity to the war effort. In addition, political animosity and transport
difficulties may interfere with trading channels. For example, Iraq's interna-
tional trade fell sharply after its 1990 invasion of Kuwait as other countries either severed trade relations or disrupted supply lines. The composition of trade changes because of a shift from consumer goods to industrial goods that can be used in meeting military objectives. International investment is disrupted because foreign-owned plants are frequently destroyed or expropriated. There is little capital available to move abroad, and even if there were, uncertainties and political regulations would prevent it.
Increased global interrelationships lend far-reaching impact to today's military conflicts. A particularly notable example was the worldwide oil price increases resulting from Iraq's invasion of Kuwait. Even national disturbances may have widespread international implications. The Chilean disruptions in the early 1970s, for example, had a substantial effect on world copper production and usage. The civil war within Lebanon resulted in a shift in international banking from Beirut to Bahrain and Cyprus.
Military conflicts disrupt traditional international business patterns as partic-
ipants divert their transportation systems and much of their productive ca-
pacity to the war effort. In addition, political animosity and transport
difficulties may interfere with trading channels. For example, Iraq's interna-
tional trade fell sharply after its 1990 invasion of Kuwait as other countries either severed trade relations or disrupted supply lines. The composition of trade changes because of a shift from consumer goods to industrial goods that can be used in meeting military objectives. International investment is disrupted because foreign-owned plants are frequently destroyed or expropriated. There is little capital available to move abroad, and even if there were, uncertainties and political regulations would prevent it.
Increased global interrelationships lend far-reaching impact to today's military conflicts. A particularly notable example was the worldwide oil price increases resulting from Iraq's invasion of Kuwait. Even national disturbances may have widespread international implications. The Chilean disruptions in the early 1970s, for example, had a substantial effect on world copper production and usage. The civil war within Lebanon resulted in a shift in international banking from Beirut to Bahrain and Cyprus.
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