Role A: The President

Role Play 3: Deciding where to invest

Introduction

You work for an international bank, and you are selecting a major new investment project. What criteria do you use to make your choice? You are not only choosing the project itself, but at the same time the country or region where the project will be realized.

Look at this list of possible criteria. Work with a partner, and choose what you think are the important criteria. At the same time, eliminate criteria you think are unimportant.

• political stability in the country or region concerned
• the climate
• the viability of the project
• the level of development of the country or region
• the availability of subsidies
• the return on investment
• the friendliness of the local people
• the duration of the loan
• the amount of investment you already have in the country or region
• who your partners will be
• the life expectancy of the local people
• exchange rate variations
• religious beliefs and practices
• guarantees

2. When you have eliminated the unimportant factors, number your criteria in order of importance (1 = most important).

Situation

You work for the Toshoya Bank, which has its head office in Tokyo and branches around the world. It is one of the ten biggest banks in the world. You are meeting today to discuss major investment projects. These are the projects in which you are considering investing:

• a dam for hydroelectricity

• an irrigation and water supply project

• a shipyard

• a road bridge in Canada between Ontario and Quebec

You want to choose the most suitable project. You must in particular consider:

— the political stability in the countries concerned

— the viability of the project

— the return on investment

— the duration of the loan

— who your partners will be

— exchange rate variations

— guarantees

You must decide:

• which is the most promising project for the bank

• for which project the bank should begin detailed negotiations

Worksheet

ROLES:

Role A: The President

Chairing the meeting: You chair the meeting and ensure everyone joins in. It is important to consider each project and how well it meets all the criteria (in the Situation) for investment. Organize the meeting in the following way: 1. Ask each participant to give their opinion of each project. They can fill in their Worksheets as the different projects are discussed.

2. Choose the most suitable project for the bank.

Your own point of view: You favour the dam in Malaysia. It’s the most expensive project, but political stability is good in Malaysia, the average economic growth over the last twenty years has been higher than in most countries, and the currency is stable against the average level of other currencies in the region. You already finance two other major projects in Malaysia and Singapore, your bank is the second largest in the country, and you have a close partnership with the Malay Industrial Bank, the largest commercial bank in the country.

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