Forecasting the political risk for investment in emerging markets

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.