Political risk: Overview

Spurred by globalisation, companies are taking on greater international exposure than ever before. Conflict in the Middle East, terrorism, and pandemic diseases—to name but three issues—are perennial threats to the security and continuity of global business operations. At the same time, government intervention in national economies is on the rise, and incidences of business setbacks—contract renegotiation or cancellation by a host country, politically driven increases in taxation, or impromptu country exits after significant investment—are surging.

Also worrisome is the growing gap between corporations’ acceptance of political risk for economic rewards and their ability to adequately manage that risk in an effective manner.

Optimising performance regardless of economic and political climate

At PwC and Eurasia Group, know that if political risk can be anticipated, it can measured—and if it can be measured it can be managed. This principle lies at the heart of our political risk practice, and underscores its value to global organisations, now more than ever.

Here some real-world examples of political risk situations:

• You are managing a global supply chain or offshore operation and need to analyse the country-specific forces that could impact performance results.
• You need early warning of a potential problem or opportunity presented by political shifts—and to have in place contingency plans to protect your company from worst-case consequences.

Working with PwC

Using our deep sector knowledge and comprehensive political risk data and tools, PwC and Eurasia Group can help you:

•  and determine your level of preparedness.
• Examine the quality and adequacy of your existing controls and risk-mitigation plans.
• Weigh investment and operating opportunities—and develop associated risk mitigation steps—through scenario planning.
• Embed political risk considerations into your strategic decision-making process and ongoing operations.