Politics In Economics

The role of. Politics, Law, and Ethics. In International Business. Chapter. Political Ideologies. Democracy. Totalitarianism. Forms of Totalitarianism My explanation. Political Risk. Political risk. Where is Political Risk? Political Risk. How can you handle/minimize the risk? World’s Legal Systems. Other Differences of Legal Systems. The law is different, so what? Most conflict is around these issues. Banking and Islamic Law. Laws that Differ Most. Copyright Protection Differences. Differences in Perceptions of Ethics? International corruption cases – Siemens. *in the news international corruption cases - siemens. What do I need to know to do well on the exam.

Conflict and violence Terrorism and kidnapping Property seizure: confiscation, expropriation, nationalization Policy/law changes Change in local content requirements (forced % of local employees, raw materials, etc).

Violent Protests in France: Even developed countries are not immune.

Where would you rather do business? A – low risk B – medium risk C – high risk.

Higher risk  Less Competition  Higher returns.

Exxon-Mobil withdrew from Indonesia due to violence against its facilities.

Russian Official on possibility of Nabucco (gas pipeline from Middle Asia to Europe via Turkey: “If needed, Turkey, Israel, Iran will burn in regional wars, but won’t let the project work!”.

Annual US company office and personnel security bill roughly $1M.

A Ukrainian tanker with Saudi oil worth $40M kidnapped, demanded ransom $10M, 3 months and counting.

Information gathering Pre-departure personnel training Adaptation Local equity/debt and partnerships (share assets and interest, you feel bad, they feel bad) Localization (pretend to be local) Development assistance (aka PR, do good to the community) Insurance Influence local politics Lobbying Supporting “the right” candidates.

The law is different, so what?Most conflict is around these issues:.

Different laws, different procedures Different contract interpretation Law standardization.