Economic Risks Of A Country Essay

1970 Words Apr 21st, 2016 null Page
When assessing a country there are precautions a business must take. Country risk has been traditionally viewed in terms of political, economic and legal risks. Political risks are often assessed in terms of country stability and sometimes measured by the level of confidence in a government. Economic risks are reflected in levels of national growth, inflation, unemployment, balance of trade and taxes. Legal risks are traditionally viewed in terms of common law, civil law, and theocratic law. How do these play out? A change in national leadership, for example, sometimes leads to instability that can result in social turmoil. And, a new regime that reverses policies often disrupts investments. Some predictable, but mostly unforeseeable, these actions often put international receivables at risk or severely disrupt supply chains. Inflation, for instance, could lead to fewer finished products being sold and therefore less profit for the business. Finally a legal risk that a country might face would be protection on property rights. Greece is a mixed based economy (Socialist), like France, which some production activities are privately owned and and some are government controlled. With that being said, they are still politically fragile. Just last year Greeks granted victory to the radical left Syriza party, which allied with right-wing sovereigns in order to govern. This led to a split within the Syriza. Faced with the resignations of some of his Members of Parliament (MPs),…

Related Documents