Shale Gas Race: Political Risk in China, Argentina and Mexico

Posted on January 19, 2014 by admin

Journal of Political Risk, Vol. 2, No. 1, January 2014.

A global map showing shale gas basins, top reserve holders.

Global shale gas basins, top reserve holders. Source: Reuters, Catherine Trevethan.

Igor Faynzilbert, CFA
Financial Analyst

As the world continues to embrace cleaner and more efficient sources of energy over the next 25 years, natural gas stands to gain a large market share at the expense of less efficient and more pollutant coal and wood. The United States is currently the biggest winner from hydraulic fracturing and horizontal drilling that allow significantly increased production of shale gas. However, China, Argentina and Mexico are also potential gainers from these new technologies if they manage to overcome political and infrastructure challenges that have considerably slowed development of new gas fields. Continue reading →

Election Boycott will Weaken Thailand’s Democrat Party and the PDRC

Posted on January 10, 2014 by admin

Journal of Political Risk, Vol. 1, No. 8, December 2013.

Anti-government protesters photographed attending a rally outside Government House on December 9, 2013 in Bangkok, Thailand. Photo credit: Sira Anamwong.

Anti-government protesters attend a rally outside Government House on December 9, 2013 in Bangkok, Thailand. Photo credit: Sira Anamwong.

Anders Corr, Ph.D.
Publisher of the Journal of Political Risk

Thailand’s opposition Democrat Party, as well as the supporting People’s Democratic Reform Committee (PDRC) protest movement, will weaken due to strategic missteps of boycotting elections and attempting to block other parties from registering with Thailand’s electoral commission. It should be obvious that elections and elected position are a potent source of influence for both political parties and social movements. Boycotting elections invariably backfires as a strategy because it increases distance between the challenger who wields the strategy, and the electoral source of influence. Election boycotts led to landslide victories for incumbents in Trinidad and Tobago (1971), Jamaica (1983), Burkina Faso (1991), Ghana (1992), Togo (1993), Ethiopia (1994), Mali (1997), Algeria (1999), Gambia (2002), Guinea(2003), Azerbaijan (2003), Iraq (2005) and Venezuela (2005). The incumbent also won the boycotted 3 April 2006 elections in Thailand. These were later invalidated and followed by a coup, resulting in the instability that continues in Thailand today. As in prior boycotts, expect the incumbent political party, in this case Prime Minister Shinawatra’s Pheu Thai, to take advantage of the challenger’s absence to consolidate the Pheu Thai’s parliamentary majority and public image. Expect increased dissatisfaction among the opposition and military, and resulting political instability.1 Continue reading →

Rise of Environmental NGOs in China: Official Ambivalence and Contested Messages

Posted on January 10, 2014 by admin

Journal of Political Risk, Vol. 1, No. 8, December 2013.

Figure 1 is a bar graph titled "Registered NGOs (Civil Organizations) in China 1988 to 2009." and shows an upward trend.

Figure 1. Registered NGOs (Civil Organizations) in China 1988 to 2009. Data source: Xu Ying and Zhao Litao, 2013.

Ruge Gao
Cornell University

With China’s impressive economic growth over the past few decades has come an environmental cost that reaches from the countryside to the capital.[1] While some Chinese economists believe the lack of environmental regulation encourages uninhibited growth, the Chinese State Environmental Protection Agency and State Statistics Bureau have produced statistics that indicate that environmental damages have decreased growth by three percent.[2] Triggered most prominently by the 1998 Yangtze River Floods, the number of Chinese environmental non-governmental organizations (ENGOs) began growing around 2000 and experienced explosive growth within the last decade. According to Chinese Ministry of Civil Affairs statistics,[3] in 2008 China had approximately 212,000 social groups, with 5,330 being of the environmental variety. Many Chinese ENGOs are in the public eye, but must simultaneously satisfy international donors and local government officials in order to survive. Continue reading →

Political Risk to Investment in Iran: Sanctions, Inflation, Protectionism, War, Bonyads, and the IRGC

Posted on January 10, 2014 by admin

Journal of Political Risk, Vol. 1, No. 7, November 2013.

Figure 1 is a bar graph titled "Foreign Investment in Iran and its Neighboring Countries, March 19, 2012-March 19, 2013" and follows a parabolic shape.

Figure 1: Foreign Investment in Iran and its Neighboring Countries, March 19, 2012-March 19, 2013. Data Source: The Government of the Islamic Republic of Iran News.

Reza Yeganehshakib
University of California

Despite a tumultuous recent political history that includes revolution, war and sanctions, relations between Iran and the West are improving and Western investors are increasingly interested. But, Iran’s politics cause sanctions, and the economy suffers from inflation. Protectionist laws are on the books, and in some cases economic crimes are punishable by death. Regardless of warming relations with the West, Iran has in the past reneged on its agreements, and war is still a risk with non-Western bordering countries and regional powers. The Iranian Revolutionary Guard Corps (IRGC) has nationalized foreign investments in the recent past, and the politically powerful revolutionary foundations known as Bonyads control large segments of the most lucrative investment sectors. Continue reading →

Legal Services Reform in China: Limitations, Policy Perspectives, and Strategies for the Future

Posted on October 21, 2013 by admin

Journal of Political Risk, Vol. 1, No. 6, October 2013.

Julian Yang, Esq.
Lawyer

Précis: Mr. Julian Yang, a practicing lawyer and arbitrator in Beijing, China, describes problems with the Chinese legal system, including bias by courts, corruption, a culture of litigation, and lack of sufficient numbers of lawyers to satisfy market demand. He argues for legal services reform in China, including: 1) allowing foreign lawyers to address Chinese courts, 2) allowing foreign lawyers to practice commercial law, 3) increasing consultation of lawyers in contractual law to avoid litigation, 4) use of arbitration to decrease the quantity of litigation, 5) increasing the rights of Chinese lawyers, such as rights to gather evidence, and 6) increasing the rights of clients, for example the right to freely choose and meet with lawyers without police scrutiny. Mr. Yang argues that these reforms will increase the influence of China abroad, improve legal services in China, and provide a test as to whether greater political reform would be possible without loss of political stability.

Continue reading →