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Risk Analysis Within Political Science - Research Paper Example

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Risks in the political science can also emanate from within a country; this is in the case of the political decisions that are made within the country. Any slight political hiccups in a country do jeopardize the investor’s ability to engage in doing business within some geographical regions…
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Risk Analysis Within Political Science
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Download file to see previous pages Political risks thus do impacts heavily in the way a country deals with the capacity to create employment opportunities to its citizen as well as the ability to ensure sustainable business relation with the neighboring countries and the need to ensure that the balance of trade and the balance of payments are favorable (Kobrin,pg. 111). This is to avoid the currency being inferior to other countries.
Foreign Direct Investment (FDI) is quite common in the worlds emerging markets, the emerging markets are envisioned to have a robust market for the numerous production that is exuded by the foreign investors. This productions has to be consumed in the regions with overwhelming markets and this is why the investors do research t identify these markets and make decision to trap the market available (Waterstone,pg. 123). In some unfortunate circumstances, the political situation in these regions becomes volatile making the investors to renege on their decision to engage the region in productive business; this is so because they fear loosing their investment due to outbreaks of war and other upheaval activities that do not support smooth operation of business.
The analysis of the political risks enables the investors to project on the possibilities of the threat occurring and the likely damage that is associated with them, in this sense the mitigative measures can be coined to help cushion the associated businesses from the devastating and sporadic confusions that come with the political decisions. ...
es, the political situation in these regions becomes volatile making the investors to renege on their decision to engage the region in productive business; this is so because they fear loosing their investment due to outbreaks of war and other upheaval activities that do not support smooth operation of business. The analysis of the political risks enables the investors to project on the possibilities of the threat occurring and the likely damage that is associated with them, in this sense the mitigative measures can be coined to help cushion the associated businesses from the devastating and sporadic confusions that come with the political decisions. These risks can also be brought about by the social problems such as over population, unemployment especially for the youths which always results into juvenile delinquency and increased crimes rate. These factors are recipe for making environment unfit for business and they require political solutions to quell. In political science, the analyst always endeavors to give hypothesis of the situation as they possibly would be and on the other side do give the repercussions tied to them occurring as stated. They also propose on how to mitigate on the effects of the occurrences. The risks in this case would involve several factors including; the change of the government, when the government of a country changes, there are chances that most policies governing the country will also change depending on the policies contained in their manifesto. The policies that might change include the taxation policies with regard to domestic and foreign products. The changes in the taxation policy can turn to be punitive and extorting and this can lead to realization of losses by the companies, organization and other business partners that ...Download file to see next pagesRead More
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