Political Risk: Any firm investing outside its home country faces additional risks. These risks include political risk, the risk that the political situation of the country may change in an unfavorable manner for the business. In the worst case, the firm may face the expropriation of its assets in the foreign country. Expropriation is the transferring of all ownership rights to the government.
To address this risk, managers of multinational firms must continuously monitor and assess the political climate in which they invest. The State Department of the United States government regularly publishes reports on the political climate in countries around the world.
Access the Background Notes from the State Department for the country of Turkey.
After reading this report, answer the following questions:
What series of economic reforms were implemented in Turkey during the 1980s? Are these reforms favorable to U.S. firms wishing to invest in Turkey?
What Constitutional amendments and regulatory reforms were passed by the government of Turkey over the period 1999-2002? Are these changes likely to improve or worsen business conditions in Turkey?
What is the current state of relations between the United States and Turkey? Is the current state favorable to U.S. businesses wishing to invest in and export products to Turkey?