ASSESSING POLITICAL RISKS

Areas of Application for Political-Strategic Risk Analysis

Strategic risks are related to various political and economic projects and enterprises. Foresighted and concomitant risk analyses will add value for example in the following areas.

• Political Stability / Country Analysis

  With regards to domestic or foreign involvements it is not only important to know who is presently in command in the respective state. Political power situations constantly change, sometimes abruptly, caused by new actors or a modified distribution of resources. For that reason, one should be well informed about the country’s relevant bureaucratic and informal decision-making processes.
  
  

   

• Legal Security

  Safe investments are founded on the required legal provisions. But political Compliance is needed too, which means the proper implementation of the laws and the observation of treaties. In addition, the assessment of legal security is determined by the independence of the judiciary, protection from organised crime and political control of military and police authorities.
  
  

   

• International Regulation

  Many investments are affected by global developments and international agreements that are best considered at an early stage. Recent examples are provided by issues surrounding climate protection, energy security, international economic and financial cooperation, but also by possible unilateral or collective sanctions imposed on a country. Finally, Non-governmental Organizations (NGOs) assume a growing role in international affairs.
  
  

   

• Negotiation and Mediation

  Political and economic partnerships and cooperations as well as diplomatic crises or labour disputes are managed through negotiations. Strategic risks become very tangible in negotiation situations. The greatest challenge consists of maximizing the contract value for all participants by framing the agenda, systematically analysing the preferences and by mediating fair agreements.