Case Study:
COUNTRY RISK ANALYSIS
WHAT COUNTRY? ___Brazil
WHAT INDUSTRY? _________________
AgTech
EnergyTech
EnviroTech
MedTech
IT Infa
Consumer Goods
Business Solutions
WHAT RISKS? [Doing Business in _______________]
• Political - What kind of system? Who are the players? Who is in power? How does power change? Smooth or battle? Someone is in power forever and never leaves. Or someone is in power and gets impeached.
• Financial - Is there investment activity? Is there lending activity? Is there capital scarcity? Is capital abundant?
• Economic - growing, shrinking, flat; velocity; volatility
• Geo-Political - What is nearby? Safe, dangerous, other?
• Infrastructure - Have? Have not? Not enough?
o Electricity, water, wastewater, waste, transportation
o IT infrastructure - data centers, wi-fi connections, cellular data, etc.
• Labor Supply - Have, have not, something in between.
o High unemployment may be good if you're an employer needing to hire people.
o Low unemployment is good if you're looking for work, because people are hiring.
o Skilled workers, unskilled workers, technology workers, other.
• Environmental - tsunami, typhoon, tornado, hurricane, pollution (air, water, soil, other)
• Natural Resources - have, don't have, something in between
• Cultural risk - language, religion, business practices, customer cultures, suppliers cultures, etc.
• Legal risks - court system fair or not, contracts are enforceable or not, penalties are recoverable or not - judgement enforceable or not; and regulatory environment, specific burdens or support from regulations
RISK MANAGEMENT - What can you do to reduce risks associated with these topics?
• Here's some ideas to start with... but we need to look into this more.
• Legal (for example) - we'll hire local legal experts to advise us; we'll also talk with international legal specialists to guide us. Based on their advice we'll proceed to set-up, organize, contract, etc. With the various parties involved in our business.
• Financial - Guarantee the risk, insure the risk, shift risk by contract to others, find local partner to co-finance, and other ideas.
• Environmental - Ask country what it has to offer in supporting you doing a environmentally friendly project.
WHAT SOURCES OF INFORMATION? [See Librarian Theresa Gehrig's Instructions.]
When evaluating country risk - it is best to consider from the perspective of a specific kind of business. What issues are particularly safe, risky or mixed? Political, financial, natural resource, labor, environment, legal, or other. Here are the types of business I suggest you could consider. Pick one:
• AgTech
• Consumer Goods (fashion, electronics, food, etc.)
• EnergyTech
• EnviroTech
• IT Infrastructure (data center, networking, communications, cloud, IoT, M2M)
• MedTech
• Business Solutions