Country risk relates to the likelihood that changes in the business environment will occur that reduce the

profitability of doing business in a country. These changes can adversely affect operating profits as well

For decades, Argentineans have suffered. Earlier it was due to military dictatorship. Huge debts were acquired for various projects which were left unfinished. Some did not even take off. Power was in the hands of a few who mercilessly milked the country. Argentineans elected Raul Alfonsin who introduced a new currency, the Austral. This move was a total failure and inflation crossed the 200% mark.

In 1970, the US dollar was significantly over valued due to American spending and the Vietnam War. In response to this, in 1971, President Richard Nixon the Group of Ten created and signed the Smithsonian Agreement, which was a revision to the Bretton Woods international monetary system. The Bretton Woods system established the rules for commercial and financial relations anong the world’s largest states. His system was first created in 1944 to help rebuild after WWII.

One of the largest political risks that a company can face is nationalization. Nationalization occurs when a company is a private one but changes to become a firm that is under the control and ownership of a government. Foreign companies, when entering international markets, often consider nationalization as a major risk. Even though some nations might compensate the company that has been nationalized a firm might not be compensated at a fair rate and as research shows there are concerns about the transition from a private firm to a nationalized one.

The South East Asian Crisis was one that many did not see coming but seemed almost improbable because of the many decades, of great performance from their economies, their region had. What it essentially came down to was a weak financial system and governance that left much to be desired.

The Argentine economic crisis during the early 2000’s was the result of a decision, by one of their presidents named Carlos Menem (1991), to peg the Argentine Peso to the U.S. Dollar. The reason for this was to produce financial stability for his country by placing a one-to- one parity between the two currencies.

One of the main reasons why businesses diversify across business risk is because they are preventing the likelihood of failing and going bankrupt.  As an example, firms often invest in hedge funds that from an operational perspective, examined in isolation, are risky- as are technology stocks, energy trading companies or airlines.  However, most investors within the firm do not hold single portfolios.  They diversify stock-specific risk (known as NON-systematic risk) by investing in a range of stocks with different characteristics.  Most of these investors regard it as unwise not to diversi

Every person should understand that risk has its rewards.  Thus, within the academic and “street” realm there is an urge to exploit risk to the highest degree to reap the greatest benefits.  Today, creation of analytical tools to measure risk has provided some insight on ways to diversify risk exposure, and refine the basic understanding of market risk.

Globalization can be a huge opportunity for business and people to engage in business with many countries around the world, however, investing abroad can be accompanied by risk, for example the Venezuelan government might take companies away from foreign companies or investors or worse yet make foreign loan repayments illegal. Business and investors that conduct business abroad have in place a country risk analysis to help decide whether to start a business in a particular country.

The population in Poland is 38,000,000 and the annual growth rate is -.2%. Urban population is 61.4%. Poland ethnic Origins are 97.8% Poles, 0.4% Germans, 0.1% Belarusians, 0.1% Ukrainians and 2.7% other nationalities. The official language is Polish. The most spoken foreign language are German and English but it is useful to know a few words of Polish to travel across the country specially outside large urban areas.