Political Risk in Emerging Markets

POLITICAL RISK IN EMERGING MARKETS SURVEY

Companies investing in emerging markets are often faced with a variety of political risks, from political violence and expropriation to currency inconvertibility.

This survey, jointly conducted by the Dubai International Financial Center (DIFC) Authority and the Multilateral Investment Guarantee Agency (MIGA), a part of the World Bank Group, will assess how executives in the Arab world perceive political risk in their foreign direct investment decisions, and their strategies for managing this risk.

Your participation in this survey is valued and we would like to encourage you to take just 15-20 minutes of your time to share your experiences and perspectives with us.

In appreciation for your effort, you will receive a free copy of the survey results as well as an invitation to participate in our regional results workshop.

Please note that we are committed to protecting your privacy. Your personal details and company name and information will not be shared with any third party and survey results will be completely anonymous.

Thank you for your time and for taking part in our survey!

Privacy Policy

* 1. Are you involved in, or familiar with, your company’s investment plans in emerging markets?

Yes

Don't Know

* 2. Are you involved in lending to companies making investments in emerging markets?

Yes

Don't Know

* 2 b. Are you involved in advising companies making investments in emerging markets?

Yes

Don't Know

* 3. Please identify the top emerging market destinations for your company’s or division's support of direct investment projects both today and and over the next three years? Please select up to ten responses.

* 4. In your opinion, which of the following factors will pose the greatest constraint on investments in emerging markets this year? Select up to three choices.

* 5. In your opinion, which of the following factors will pose the greatest constraint on investments in emerging markets over the next three years? Select up to three choices.

Definition of Political Risk

Political risk refers to the risks to a business stemming from political events and in particular the actions of governments. Political risk is a broad concept including a variety of different types of risks. For the purposes of this survey, these risks are assumed to include: transfer and convertibility restrictions, expropriation of assets, terrorism, war (internal or external violent conflicts), civil disturbances, labor unrest, breach of contract, restrictions on investment outflows, restrictions on investment in host countries and other adverse regulatory changes. Click here for a list of detailed definitions.

6. In your opinion, which types of political risk are of most concern to your company or division when supporting/lending to investment projects in emerging markets? Select up to three in each row.

7. How has the current global financial crisis affected your company or division's view of the following items? Check all that apply.

* 8. Which of the following does your company or division use or suggest as a tool for managing political risk? Select all that apply.

* 9. What are the primary reasons your company or division does not use political risk insurance? Select all that apply.?

Level of political risk is not high enough to justify using tools to manage these risks

Lack of appropriate tools and products

Cost of tools and products is too expensive

Lengthy and long contracting processes

Lack of Shariah-compliant options

Unaware of tools and product offerings

Don’t know

N/A - We do use political risk insurance

Other, please specify

* 10. Moving forward, do you expect your company to consider or suggest political risk insurance for investments abroad?

Yes

Don’t know

11. Are you interested in learning more about political risk insurance and its applications to your business?

Yes

* Sorry this survey is aimed at executives with experience in these areas. Althought you do not qualify to participate, we would be happy to share the results of the survey with you. Do you wish to receive a free electronic copy of the survey results, when it is published?

Yes

* Do you wish to be informed of future DIFC Authority or MIGA surveys, workshops and learning opportunities?

Yes

Contact details required. If you answered ’yes’ to any of the prior questions, please provide your email address. It will not be shared with any third party, nor used for any purpose other than the one(s) you have specified.

* In which country are you personally based?

Section I: Investment plans at the company level and FDI trends

2. How do you expect your company or division’s planned investments abroad to change this year compared with last year and over the next three years compared with the previous three years?

3. Do you expect your company or division to shift its foreign investments from emerging to developed markets, or vice versa?

* 4. What are the main emerging market destinations for your company or division's direct investments abroad today and over the next three years? Please select up to ten responses.

5. Please rank the destinations that you have identified in terms of current investment activities. Place corresponding numbers in the country response boxes with 1 representing your top investment destination.

Afghanistan
Albania
Algeria
Angola
Antigua and Barbuda
Argentina
Armenia
Azerbaijan
Bahrain
Bangladesh
Barbados
Belarus
Belize
Benin
Bhutan
Bolivia
Bosnia and Herzegovina
Botswana
Brazil
Brunei Darussalam
Bulgaria
Burkina Faso
Burundi
Cambodia
Cameroon
Cape Verde
Central African Republic
Chad
Chile
China
Colombia
Comoros
Congo, Dem. Rep.
Congo, Rep. of
Costa Rica
Côte d’Ivoire
Croatia
Cuba
Czech Republic
Djibouti
Dominica
Dominican Republic
Ecuador
Egypt
El Salvador
Equatorial Guinea
Eritrea
Estonia
Ethiopia
Fiji
Gabon
Gambia
Georgia
Ghana
Grenada
Guatemala
Guinea
Guinea-Bissau
Guyana
Haiti
Honduras
Hong Kong
Hungary
India
Indonesia
Iran
Iraq
Jamaica
Jordan
Kazakhstan
Kenya
Kiribati
Korea, Rep. of
Kosovo
Kuwait
Kyrgyzstan
Laos
Latvia
Lebanon
Lesotho
Liberia
Libya
Lithuania
Macao
Macedonia
Madagascar
Malawi
Malaysia
Maldives
Mali
Marshall Islands
Mauritania
Mauritius
Mexico
Micronesia
Moldova
Mongolia
Montenegro
Morocco
Mozambique
Myanmar
Namibia
Nauru
Nepal
Nicaragua
Niger
Nigeria
Oman
Pakistan
Palau
Panama
Papua New Guinea
Paraguay
Peru
Philippines
Poland
Qatar
Romania
Russia
Rwanda
Saint Kitts and Nevis
Saint Lucia
Saint Vincent and the Grenadines
Samoa
Sao Tome and Principe
Saudi Arabia
Senegal
Serbia
Seychelles
Sierra Leone
Slovakia
Slovenia
Solomon Islands
Somalia
South Africa
Sri Lanka
Sudan
Suriname
Swaziland
Syria
Taiwan
Tajikistan
Tanzania
Thailand
Timor-Leste
Togo
Tonga
Trinidad and Tobago
Tunisia
Turkey
Turkmenistan
Tuvalu
Uganda
Ukraine
United Arab Emirates
Uruguay
Uzbekistan
Vanuatu
Venezuela
Vietnam
West Bank and Gaza
Yemen
Zambia
Zimbabwe

* 6. Does your company or division use Shariah-compliant financial structures when investing in emerging markets?

Yes, for more than 75% of investments

Yes, for 50 – 75% of investments

Yes, for 25 – 50% of investments

Yes, for less than 25% of investments

No, we never use Shariah-compliant structures

Don’t know

* Section II: Trends in political risk

7. In your opinion, which of the following emerging markets are the riskiest to invest in today? Select up to five countries.

* 8. In your opinion, which of the following factors will pose the greatest constraint on investments by your company or division in emerging markets this year? Select up to three choices.

* 9. In your opinion, which of the following factors will pose the greatest constraint on investments by your company or division in emerging markets over the next three years? Select up to three choices.

10. How do the following factors impact the evaluation of emerging market investment opportunities?

11. What is your company or division’s overall perception of the political risks in investing in the following emerging markets?

12. In your opinion, which types of political risk are of most concern to your company or division when investing in emerging markets? Select up to three in each row.

13. How has the current global financial crisis affected your company or division’s view of the following items? Check all that apply.

Section III: Political risk mitigation strategies

14. Which of the following does your company or division use as a tool to manage political risk? Select all that apply.

15. For which of the following types of political risk does your company or division use political risk insurance? For each country, select all that apply.

* 16. If your company or division uses tools to manage your political risk exposure, are these tools Shariah-compliant?

Yes, for more than 75% of cases

Yes, for 50 – 75% of cases

Yes, for 25 – 50% of cases

Yes, for less than 25% of the cases

No, we never use Shariah compliant political risk tools

Don’t know

* 17. What are the primary reasons your company or division does not use political risk insurance? Select all that apply.?

Level of political risk is not high enough to justify using tools to manage these risks

Lack of appropriate tools and products

Cost of tools and products is too expensive

Lengthy and long contracting processes

Lack of Shariah-compliant options

Unaware of tools and product offerings

Don’t know

N/A - We do use political risk insurance

Other, please specify

* 18. Moving forward, do you expect your company or division to consider political risk insurance for its investments abroad?

Yes

Don’t know

* Section IV: Background Information

19. What are your organization’s global annual revenues in US dollars?

$250 million or less

$250 million to $500 million

$500 million to $1 billion

$1 billion to $5 billion

$5 billion to $10 billion

$10 billion or more

* 20. In its foreign investments, does your company invest mostly as equity or as loans?

Equity

Loans

Both

Don’t know

* 21. In its foreign investments, does your company typically take a majority stake or does it invest in companies that are controlled by others?

We typically take a controlling or majority stake

We typically invest in companies that are controlled or majority-owned by others

Both

Don’t know

22. How would you rate your company’s capabilities in the following areas?

* 23. How would you assess your company’s average financial performance relative to its peers over the past three years?

Better

Same

Worse

Don’t know

* 24. In which country is your company headquarters located?

* 25. On what industry do you mainly work?

Agriculture, forestry and fishing

Mining, quarrying and petroleum extraction

Manufacturing

Financial sector

Utilities, transport, storage and communications

Services (excluding financial sector, utilities, transport, storage and communications)

Other

* 26. Which of the following best describes your job title?

* 27. What are your main functional roles? Please choose no more than three functions.

* Follow-up

Do you wish to receive a free electronic copy of the survey analysis, when it is published?

Yes

* Do you wish to be invited to regional DIFC Authority and MIGA workshops and learning events in the region?

Yes

Contact details required.

Please provide your contact details. They will not be shared with any third party, nor used by MIGA or the DIFC Authority for any purpose other than those you have specified above.

* First Name :

* Family Name :

* Company name :

Address :

* City/Region :

* Zip :

* Country :

Phone :

* Email Address :

Thank you for taking part in our research!

Your responses have been collected. Please click on the button below to submit your survey.

Please contact Dr. Fabio Scacciavillani ([email protected]) if you have any questions regarding this survey. For technical probems, email Ms. Roxanna Faily ([email protected]).