What indicators would you look for in assessing the political riskiness of an investment in Eastern...

What indicators would you look for in assessing the political riskiness of an investment in Eastern Europe?

Expert Solution

While conducting the international business in emerging opportunities in markets for multinational corporations, the upside for such regions in Eastern Europe is usually accompanied with the turmoil and challenges. The struggles for the conducting of the business in a location which is unfamiliar location are often lumped together with the political risk - the threat that social, political or economic factors in a foreign nation may impact the profitability and feasibility of global operations of an organization. Therefore it is important to assess the political riskiness of an investment in these regions. It can be done with the following indicators:

-- Does free prices continue the old system of administered prices that are based mainly on the subsidies from state?

-- Does Eastern Europeans sell and dismantle the state-owned monopolies quickly?

-- Does these regions establish all the requisites of capitalism such as the tax regimes, capital markets, and contract law to cope with the new-found enthusiasm in these free markets?

-- Will be the governments be interested in the temptation to fine-tune their economies for decreasing the costs of making the transition towards the market economy?

-- Would the Eastern Europeans will be keen to see successful businessmen to be more successful and rich?

Rahul Sunny answered 6 months ago

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