Focus on political risks Funk Foundation sponsors risk reports
In 2018, the Funk Foundation has published the series ‘Risk report – political risk scenarios’, which presents the political risks in 25 selected countries.
The reports were created in cooperation with the consulting firm CONIAS Risk Intelligence. On a total of about 30 pages, they show which political changes pose a risk to German companies abroad. This is done by analysing the key lines of conflict in each country, as well as identifying the most influential individuals and upcoming political events.
The 25 countries which are featured in the risk reports include the USA, Russia or China, but also Iran or Turkey. The security of each country, alongside its legal landscape and the possibility of employing qualified personnel there, are analyzed. Cyber risks are also examined. An especially beneficial aspect of the scenario analysis is the investigation of the country’s change processes and their effects on relevant location-specific factors. CONIAS developed the underlying methodology of the analysis in research spanning more than 20 years at Heidelberg University.
Valuable guide for investment decisions
A total of three scenarios are addressed in each risk report: A best-case scenario, worst-case scenario and a ‘trend’ scenario, which describes the most likely developments to take place in the country in question. Chairman of the Board for the Funk Foundation, Hendrik F. Löffler, says, ‘Political risks play an increasingly large role in investment decisions. With the “Risk report” series, we are giving small-to-medium-sized businesses an innovative and modern tool.’ Dr Nicolas Schwank, Managing Director of CONIAS Risk Intelligence, adds, ‘The dynamics of political processes are enormous these days. The risk reports give readers specific information on what changes are most likely and how they could affect the country and its location-specific factors.’
The ‘Risk report’ series is a novel approach to managing political risks due to its empirical methodology. With clearly formulated central questions, readers get a transparent image of the country in question, even without any previous knowledge of the political risks, and can then gauge new developments in the country. Since the methodology used is the same for each country, the countries analyzed in this series are easy to compare. The publication series is therefore a valuable guide when making investment decisions between two or more countries.
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