WHAT IS POLITICAL RISK ANALYSIS?

 

Political risk analysis provides a report on patterns and trends within a particular geographic area that may increase the likelihood of risk and liability exposure when carrying on a business.

 

WHAT IS A POLITICAL RISK?

 

Political risks include a wide range of social, economic, government, environmental  or human-made factors that may increase the likelihood of a risk arising that can lead to personal  injury/death, property damage, or other negative consequences including:

 

• weather and climate
• the host country's government policies (i.e., fiscal, monetary), programs, regulations, tariffs, laws, monetary and attitude towards foreign investment (i.e., whether it provides any tax or other incentives to invest in the host country)
• the extent of political stability in the host country and its ability to provide a safe work environment
• the degree of competency (training), efficiency and credibility (amount of coruption) of the host country's government
• relationships between social, ethnic and other groups within the host country and geographic region, i.e., on-going civil wars or ethnic tensions, cross border conflicts  
• the extent and nature of host site's  legal system;  i.e., the fairness of its courts
• the host site’s Infrastructure; i.e.,  the state of its roads, railways, information systems, harbours, airports, rivers 
• availability of and access to raw materials
• distance to markets
• availability of qualified workers or professionals
• the labour climate
• social benefit  costs
• corporate or business tax rates
• morality and sickness rates  
• banking systems
• whether the market place is tightly regulated or unregulated
• level of health services
• level of technology

 HOW WILL POLITICAL RISK ANALYSIS HELP YOUR BUSINESS?

 

Political risk analysis is designed to help you predict probable scenarios from which to consider what kinds of insurance coverage you may need when operating a business in a foreign nation or which risks may be beyond the scope of insurance coverage.

 

It may be crucial to your business's short or long term success to understand and plan to accommodate differences that will arise in the host nation that could lead to obstacles or  conflicts that could disrupt or shut down your business.

 

For example Premises Liability Coverage or other special or excess liability coverages may be required if a business intends to own a building or operate physically in certain nations where crime, executive kidnappings or terrorism make pro-active  property and personal security measures an essential part of the company's risk management portfolio.

 

Proper risk analysis can assure you obtain the best possible insurance coverage for certain risks to protect the ability of your company as well as help plan a proper risk management program to enable secured and continued  business operations in the event of a crisis or conflict.

 

 SUMMARY

 

In today's world of business, global transactions have become common place thanks to advancements in the inter-net and other communications and travel systems that have shrunk the planet and literally inter-twined different economic markets in a complex labyrnth of cross  border interactions.

 

A disruption anywhere along this complex web of inter-connected and inter-dependent global relationships can disrupt transactions leading to serious and negative financial consequences.

 

As a result, planning and providing contingency action plans including risk management programs and proper insurance coverages are now crucial if a business is to continue functioning in the face of certain disruptions or events.

 

In this regard, I provide:

 

1-briefings and reports as to political risks including:

a-analysis of potential risk and liability exposures;

b-suggestions as to which insurance coverages should be purchased

c-advise as to which risk management programs should be created and implemented including liaising and selecting appropriate security and other professionals, i.e., law firms, import/export brokers, acountants, government contacts; translators.

 

2-cross cultural sensitivity training to executives or staff;

 

3-crisis consulting to assist managers or executives resolve cross cultural misunderstandings.

 

For further information send me a memorandum detailing your concerns and needs to mrubenstca@yahoo.com.

 

I respond to all in-coming e-mails within 3 working hours.

 

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