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Where do companies investing abroad obtain their political and security risk assessment on the target country?

• When considering a direct investment in an emerging or frontier market a firm has some economic considerations like changes in currency rates and market value. But aren't there also some political and security considerations as well? Don't firms need to understand the political and regulatory hurdles and in some cases the country's security situation as well? In other words, don't they need to know if the county they are investing in is able to pay it's debts and is the country secure enough to keep the current government in power?  I know these firms have in-house strategy departments that assess the business and economic risks involved in investing abroad but do they also have in-house political/security risk assessment teams?  If not, where do companies investing abroad obtain their political and security risk assessment on the target country?

• Answer:

  Yes, in-house risk management, FDI, market strategy, etc. may also provide political and security risk assessments and strategies. There are global, credible institutions like Multilateral Investment Guarantee Agency (MIGA) that provide strong foundational data - essential to utilize more than one source of information, to get a balance of information. This provides general information that anyone can access. Also, all emerging markets will have at least a handful of local and reliable political/security risk consultancies. Being local gives these firms many advantages over international firms, i.e. better/more current pulse of domestic environment, actual connections w/ movers and shakers. In lieu of actual "firms," professors at higher education institutions can also make for strong consultants in niche areas such as political risk and security.