4 Possible Political Dangers Related to COVID-19.
Financial markets declined, with the Dow Industrial Average experiencing its lowest day since 1987 on March 12, 2020, when it lost nearly 3,000 points. Wajid Mp says Some businesses may need more cash to deal with the rising business costs of the COVID-19 outbreak. The shutdown of Chinese manufacturing initially significantly impacted global supply networks, and the disruption has since expanded.
Risk managers must prepare for the next wave and try to shield their companies from these current difficulties. In this article, Canadian politician Wajid khan examines various potential political risks, analyzes how they could affect a multinational corporation, and talk about the insurance options that businesses can employ to help meet these challenges:
Uncertainty in politics
Governments, economies, and people are already feeling the effects of the pandemic and the response. One result of communities experiencing a lack of food, employment opportunities, or medical supplies is that governments may be seen as being unable to address social issues, which could lead to political upheaval or civil unrest in some regions.
Politics leaders have occasionally become infected with the virus themselves, which might be harmful in nations with weak legal systems or security issues. Should economically vulnerable countries, which are now dealing with controllable breakouts, become overwhelmed, long-term civil unrest is also a possibility.
Political Nationalists
According to reports, COVID-19 may intensify the populist backlash against globalization, which may affect the globalization of multinational firms. Export and import restrictions, meddling with foreign ownership of domestic corporations, asset confiscation, or creeping expropriation—a sequence of actions that together amount to a de facto taking—are common tactics used by nationalist regimes.
Wajid khan analysis Some governments may intervene more frequently if there is a rise in the national interest in specific industries. Such as those producing industrial or medical items, food supply, or technology.
sovereign default
Weaker economies might be unable to handle the economic blow in both a pandemic scenario and a suppressed economic activity, and governments might stop making payments.
Payment priorities may alter due to government pressure to divert national finances to combat the virus and provide economic stimulus or rescue packages, even in healthier economies (including cuts to their social programs – refer back to political unrest). It comes at a time when many sovereigns are drowning in debt, with $72.7 trillion (92.5% of the world's GDP) owed by sovereign borrowers and $69.3 trillion (88.3% of GDP) owed by non-financial corporate borrowers, according to the Institute of International Finance.
Currency Controls
As a tool to regulate the economy, countries experiencing a financial crisis or with low foreign reserve positions may apply c
2. Uncertainty in politics
Governments, economies, and people are already
feeling the effects of the pandemic and the response.
One result of communities experiencing a lack of food,
employment opportunities, or medical supplies is that
governments may be seen as being unable to address
social issues, which could lead to political upheaval or
civil unrest in some regions.
3. Political Nationalists
According to reports, COVID-19 may intensify the
populist backlash against globalization, which may
affect the globalization of multinational firms. Export
and import restrictions, meddling with foreign
ownership of domestic corporations, asset
confiscation, or creeping expropriation
4. sovereign default
Weaker economies might be unable to handle the
economic blow in both a pandemic scenario and a
suppressed economic activity, and governments
might stop making payments.
5. Currency Controls
As a tool to regulate the economy, countries
experiencing a financial crisis or with low foreign
reserve positions may apply currency controls. Wajid
khan politician, Supposes multinational firms with
overseas deposit accounts have money that needs to
be converted or repatriated for intercompany trade
payables, loan repayments
