Political Risk

(redirected from Political Risks)
Also found in: Wikipedia.

Political Risk

The risk that a foreign government will significantly alter its policies or other regulations so that it significantly affects one's investment. More broadly, it can apply to the risk that a nation will refuse to comply with an agreement to which it is a party, or that political violence will hurt an investment or business. For example, if one exports goods to a foreign nation, and that nation elects a new government that enacts protectionist tariffs, this will negatively impact the export business.
References in periodicals archive ?
Ironshore will enhance its current representations and warranties insurance for merger and acquisition transactions by providing supplemental coverage for certain political risks which may arise in a number of volatile territories.
Brazil's rating was downgraded; political risks have been increasing from moderate levels as economic weakness has increased the role of the government in the economy.
This, according to the latest Marsh Risk Management Research briefing, Social Media Heightens Political Risks in Emerging Markets, means that the Cyrear view mirror' approach to risk management, which is frequently used by multinationals to forecast risk by examining past events, is no longer sufficient when operating in at-risk countries.
Companies with global investments, global markets or global supply chains need to undertake a process of identifying their political risks and deciding how to mitigate them, Wilkin suggests, using a five-step process.
For example, "the current iron ore rush in Liberia, Sierra Leone and Guinea is seeing South African companies pouring idle plant and machinery into the region," says Tracy de Kock, manager: New Business, Credit and Political Risks at Alexander Forbes.
This book focuses on understanding the political risks of various international regions, how PRI comes into play, and what agencies oversee its costs and uses.
Moreover, some political risks may be related to the behaviours of MNEs, which cannot be forecast depending on external political risk assessment.
Rapidly increasing globalization poses a common challenge--how to integrate the social and political risks of government instability, political corruption, business corruption, child labour practices, anti-corporate sentiment, terrorism, environmental pollution, and others, into management decisions.
Companies occasionally experienced reductions in revenue or operating losses resulting from political risks associated with regime change, social unrest, debt defalcation or currency devaluations.
Political risks can shift rapidly, disrupting business and leading to unexpected losses.
Abmed Riahi-Belkaoui attempts to identify the sources of these political risks as well as provide frameworks for estimating and managing them.

Full browser ?