analysis risk of political and economy

Topics: Risk, Communism, Economic system Pages: 7 (2414 words) Published: November 14, 2013
GFPP 3413 Analysis political and economy risk

Analysis risk political and economy are one the field in social political economy. To understand what is the analysis political and economy risk, first we must know what its mean. First is Risk, generally risk mean human and organization had to face risk and must make decision. All the decision made, have its own effect. Actually the word ‘ risk’ are come from the French word ‘ Risque’. It mean that if we cannot ventured nothing, we cannot ventured gain. According to the oxford dictionary(1976) risk mean the chance of hazard or bad consequences. Mean while the scholar like John. W. Rowe said “risk is the potential of unwanted negative consequences of an event or an activitiy. Robock and Simmon(1983) said risk is a measure of how that instability might affect the business enterprise. There are two type of risk, it is Calculated risk and Unexpected risk. Calculated risk is a risk that can be measured or expect earlier. While unexpected risk is a risk that happen suddenly. According to Crockford(1986) there are component of risk that divide into two it is ‘threats’ and ‘source’. Threats are broad range of forces which could produce an adverse result. While sources is an assets, people, or earnings which could be affected by the threats.

Then we also need to understand the mean of politics and economy. Politic generally mean the struggle of power. According to Aristotle- “man is by nature the animal of politic. While Almold, Power, Strom, and Dalton(2001), classified politics as power that relate to decision making in territories. That power can be gained by authority or by forced. Economy is an activity that show people or society have unlimited desire for limited resources. Baxter and Davis classified economy as an activity about production, distribution and use of wealth in the society. Political economy is the government which represent by the political people that have some interest in business. The political risk according to Krayenbuehl(1998) defined political risk as risk incurred by the leaders and/or inventors that repatriation of their loan or investment in a particular country such as capital, dividends, interest, fees, is restricted by that country for political reasons only.

GFPP 3413 Analysis political and economy risk
Benefit of learning the risk analysis of economy and political. 1.0 To study any possibilities of benefits and loss in the business. In business field, there are many challenged that we need to faced, sometime the challenged are big and hard to face, sometime it easy to faced. In business of course we are expect to gained big profit and reduce losses. So in that case we need to study the analysis of political and economy risk. By studying it we can know and identified many risk that we need to faced in business. As we know business field are not limited in domestics, it also involved multinational business. So there many uncertainty factors that can cause effect, maybe good effect and bad effect. It also are needed when we want to started our branch in new place. To started a business in the new placed is very difficult because we don’t know either it will make us profits or losses. If we can expect or predict the market situation in that place, it will become our advantage. Maybe our competitors doesn’t know the potential of the new place, they will ignore the new place. It will make you a big profit and you can monopoly the market. Not just that as we know that in field of analysis of political and economy risk there is two type of risk, it is calculated risk and unexpected risk. Calculated risk is risk that we already it will happen in business such as unstabil market, and many more while unexpected risk is a risk that happen suddenly such as currencies that fall sharply, inflasion and many more. Petronas (petroliam cooperate) is the best example organization that can predict posibilites of benefit and losses in the...

References: Inter-American Development Bank, The Politics of Policies, Economic and Social
Progress in Latin America, 2006 Report, Washington, DC 2005: chapters 1-5.
Political Risk, Blackwell, 1998: 15-44.
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