The recovery of the economy during 2010 was stronger than that foreseen by the estimates, however the sustainability of this recovery is still uncertain. While large advanced economies are under pressure from sovereign debt, emerging market economies are emerging as growth leaders. These countries, in addition to having contributed extensively to supporting economic growth in recent years, have been the subject of substantial investments by not only industrialized states, but also other similar economies, first and foremost China, which intends to as a leading country in emerging markets.
Investments in these economies represent an attempt to bind themselves to these countries in order to benefit from their growth. This seems like the obvious choice to make, especially when there are currently no viable investment alternatives within one's own countries.
However, these economies are not without risks: in addition to the competition from large multinationals from other emerging countries and the risk of these economies overheating, our companies also have to deal with the political risks present in these markets.
The tensions that have developed in North Africa and the Middle East have revived fears of political risks, which are always lurking in most of these markets. The perception of the "country risks" of these economies takes the form not only of the risk linked to the legislative nature (expropriation, changes in regulation, nationalizations and economic restrictions), but also the fear of civil unrest and political violence is "dusted off".
Although this type of risk is difficult to quantify, it is still possible to detect a certain correlation with variables of an economic and social nature.
In the attached article by Jasmine Zahalka, largely inspired by a recent Sace conference and a presentation by Euler Hermes, we wanted to focus attention, area by area, on the main political risks affecting some of these economies.
15.07.2011
Attachments: FIRST_The_risk_window_remains_open_on_the_global_economic_recovery.pdf
