It is high time that business and financial community
updated their political risk assessment models:
“Companies need to
recognise that many developed countries are becoming high-risk markets that do
not compensate for those risks by delivering higher returns. They may need to
import risk-management practices that they already apply to emerging markets: making
sure not to concentrate their investments in too few countries; developing
“emergency response plans” in the event of a sudden crisis; and planning how
they will cut their losses and move, or slim, their businesses if a populist
seizes power.”
Events such as Brexit and the rise of populist demagogues in Europe
and US, along with rising fear and uncertainty in developed nations, clearly suggest that the cost of doing business in advanced economies is not
all that much lower than that in emerging markets.