2024, Vol. 4, Iss. 1 - go to content...

Permanent address of this page - https://politicjournal.ru/en/05pk124.html

Метаданные этой статьи так же доступны на русском языке

Full article in PDF format (file size: 354.5 KB)

For citation:

Melkonyan G.M. [Political risks in investment activities] Political Science and Technology, 2024, Vol. 4, Iss. 1 Available at: https://politicjournal.ru/PDF/05PK124.pdf (in Russian).

Political risks in investment activities

Melkonyan Gevorg Mhitarovich
Lomonosov Moscow State University, Moscow, Russia
E-mail: gevorgmelkonyan0@yandex.ru

Abstract. The article reviews the problems of political risks associated with investment activities. The author considers a number of serious challenges affecting the efficiency and success of projects implemented by investors.

The author takes into account a wide range of political risks, in particular, such as: the risk of change of the political regime of the state, the risk of change of the regulatory environment to less favourable for the activities of foreign investors, as well as the risk of political instability and the emergence of armed conflicts. The consequences of such risks are also considered.

Particular attention is paid to emerging economies, where the possibility of political risks is higher due to the absence of established government policies on investment. Examples are given of political changes that have led to significant investment losses or a complete loss of control.

The article discusses various methods of assessing and managing political risks and such risk mitigation tools as: conclusion of bilateral or multilateral investment agreements, diversification of investments, political insurance, etc. The author concludes that a comprehensive approach to political risk management is necessary.

The author concludes that a comprehensive approach to the assessment and management of political risks is necessary, since a thorough analysis of political risks and their effective management are prerequisites for the successful implementation of investment projects, while ignoring political risks can lead to significant financial losses for investors.

Keywords: investment activity; political risks; expropriation; nationalisation; currency restrictions; political risk analysis; political risk mitigation

Download article in PDF format