Political Risk - Meaning,types,evaluation and its management by Mansi Gupta of Institute of Management Studies , Kurukshetra University , Kurukshetra (MBA-5 Year)

1. POLITICAL RISK
Presented by
Mansi - 031

2. POLITICAL RISK
Possibility of an unexpected politically-motivated
event affecting the outcome of an investment.
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3. TYPES OF POLITICAL
RISK
•MacroRisk
•MicroRisk
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4. TYPES OF Macro Risks
•Forced
Disinvestment
»Expropriation
»Confiscation
»Nationalization 4

5. TYPES OF Macro Risks
•Unwelcomed Regulations
•Interface with operations
•Social Strife / Civil Strife
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6. TYPES OF Micro Risks
•Goal Conflict with Economic Policies
•Corruption
•Credit Risks
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7. Evaluation of political risk
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8. Measurement of political risks
•QuantitativeModels
»PrimaryRiskInvestment
Matrix
»Decision-treeApproach
»HanersMethod 8

9. Measurement of political risks
•QualitativeApproach–Itinvolves
gatheringofinformationand
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10. Management of political risks
•Management Prior to investment
•Management During lifetime of project
•Management following nationalization
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11. Management Prior to investment
•Negotiatingagreementswithhost
government
•PlannedDivestment
•InsuranceofRisk
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12. Management During lifetime of project
•Joint Ventures
•Concession Agreements
•Political Support
•Structured Operating Environment
•Anticipatory Planning 12

13. Management following nationalization
•Negotiation
•Political Pressure
•Arbitration
•Legal Course of Action 13

14. 14

15. 15
ANY
Query