You are responsible for risk management in your firm. How would you go about forecasting the political risk for investment in emerging markets? How can a small-medium enterprise (SME) assess and manage political risks?
Assessing the political risks is an important factor that influences the functioning of a company in a given country with its specific political culture and governmental setup. To assess the political risks first an understanding of the political system is necessary. For example is it a democracy or a dictatorship and what kind of dictatorship or democracy it is. Then is to understand the governmental policies of dealing with SME from the outside world. There is also a need to understand the influence of politicians in the registration and operations of SMEs.