Subject-Sustainability in Global Business, Topic-Gold Mining Industry Assignment

Subject-Sustainability in Global Business, Topic-Gold Mining Industry In Armenia - Assignment Example Such forecasting has resulted in greater invasion of the foreign investors in the country with a motive to extract a larger volume of gold. However, critical analysis to the context reveals that such repeat and continuous invasions in Armenian gold industry have resulted in a major consequence of hazardous mining activities (Abrahamyan, 2012). To obtain a better insight of the gold mining advantages and industrial disadvantages of the same, a PESTEL (Political, Economic, Social, Technological, Environmental and Legal) analysis of the country has been considered in this essay. Based on the analysis results, the discussion in this essay further attempt to measure the extent to which, the gold industry can be sustainable. Moreover, the essay also aims to provide rational solutions on the basis of which gold industry is likely to operate in a more sustainable manner. 2. PESTEL Analysis of Gold Mining Industry in Armenia 2.1. Political Elements In order to attract a larger percentage of g lobal investments in gold mining industry, the political system of the country has adopted a comparatively flexible international trade policies and plans with a vision to promote its exports, which acts as the main source of national income for Armenia (CIA, 2013; Stuhlberger, 2012). Although the increased foreign investments in the gold mining industry of Armenia has resulted in its augmented national income prospects, with the inflow of a greater volume of foreign currencies, the country witnesses immense complications in terms of corruption. Furthermore, the currently persisting unfavourable relationship amid governmental bodies and the mining sector investors have also resulted in greater degree of corruption within the national context (Stuhlberger, 2012). In addition to these national issues, the country has also been facing political conflict issues with Azerbaijan and Georgia, which has further affected its potentialities to attract a larger volume of foreign investment in the most sustainable manner for its gold mining industry (Nichol, 2013). It is thus recommendable that a stable and more organised political system must be developed by the responsible governmental bodies in Armenia in order to develop its gold mining industry in a socially responsible manner. 2.2. Economic Elements The economic condition of the country has developed quite rapidly, wherein the contributions made by the gold mining industry can be argued as inevitable. However, the economic crisis situations on a global context have adversely affected the economic stability conditions of the country to a large extent being majorly depended on foreign investments. As a matter of fact, with the shrinking purchasing power of customers in the gold industry, the investment trend also declined, which affected the Armenian economy adversely. However, in the recent years of post-recessionary phase, the increased demand for gold has attracted a large number of foreign investors in Armenia (Bu siness Reporter, 2013; UN, 2012; Chshmarityan, 2005). It is worth mentioning in this context that in order to be favourable towards the development of mining sectors and suffice the increased demand of valuable metals and minerals, the Armenian government levied taxes and regulations at a marginal extent, focusing more on charging royalties on the miners. However, unlike expectations, these tax control measures to facilitate greater independency of investors in the gold mini