Modelling Country Risk of Zambia

The world has experienced a dramatic increase in the flow of transnational investments following increased internationalization and globalization of firms in the previous decade. Country risk exposure is a cause for concern for all the institutions that are engaged in multinational trade and finance. The main objective of this study is modelling Zambia’s country risk. A mixed method with concurrent research design was employed. Personal interviews were the main instrument for collection of primary data and snowball sampling was used to select the interviewees. Secondary data was collected from the Lusaka Stock Exchange (LSE), Ministry of Finance, Bank of Zambia and Central Statistical Office. An autoregressive distributed lag technique was employed on annual data for the 1994 to 2018 period. This approach was chosen as it works best for small samples. The findings of the study revealed that the short run drivers for country risk of Zambia are beta, current account balance, political risk, unemployment rate and weighted short term interest rates. Current account balance was found to positively affect country risk while beta, political stability, and weighted short term interest rates negatively influence it. The study findings established that the long run determinants of country risk of Zambia are current account balance, betas, political risk, and unemployment rate. From the study findings, current account balance positively influences country risk of Zambia whereas beta, and political stability negatively influence country risk of Zambia. The study concluded that the major determinant of country risk of Zambia in the short run and long run is current account balance as it has significant positive influence. Effective policies need to be implemented by authorities to manage or reduce persistent current account deficits and political risk, in order to manage country risk.

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Politics in the De-politicised: TikTok as a Source of China’s Soft Power

Posted on December 2, 2021 by Assistant Editor

Journal of Political Risk, Vol. 9, No. 11, November 2021

TikTok logo. Public domain, via Wikimedia Commons.

Zuza Nazaruk

Last year’s “TikTok war” revealed unprecedented hostility of the US government towards the Chinese tech newcomer. The seemingly innocuous software was developed by ByteDance, a Chinese unicorn company. TikTok is a sister app of Douyin, created for the Chinese market. Both apps allow users to share and watch short videos. In July 2020, then-President Donald Trump accused TikTok of a series of breaches, the most serious of which was sharing user data with the Chinese Communist Party (CCP) (Levine, 2020). Yet, some experts, including Adam Segal from the Council of Foreign Relations, considered the near-ban a smokescreen to hinder the growth of the most globally successful Chinese app to date (Campbell, 2020). In 2020, TikTok was the most downloaded app globally, with 89 million new users just in the US (Geyser, 2021). To date, 23% of Americans use or have watched TikTok, with an average American user having spent 14.3 hours monthly on the app in 2020 (Tankovska, 2021).

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Mineral Revenue-Sharing as Peace Dividend: Incentivizing Stakeholders to Support Peace and Stability in Afghanistan

Posted on June 26, 2021 by admin

Journal of Political Risk, Vol. 9, No. 6, June 2021

The image shows a map of Afghanistan. A satellite image of the region is contained in the map.

Mineral Map of Afghanistan. Source: USGS

Priscilla A. Tacujan, Ph.D.
Analyst for the U.S. Department of Defense

Various players have raised the prospect over the years of Afghanistan developing its mineral wealth as a means to stabilize the country, but nobody believes that it could achieve enough security to prevent attacks on infrastructure and mining operations. However, it is possible that Afghanistan might be able to broker peace and reconciliation through a mineral revenue-sharing scheme^[1] that directly distributes mining dividends and profits to the general population as well as extract concessions from the Taliban — an approach that has helped mitigate conflict in some other war-torn areas where revenue-sharing has been part of their peace accords.^[2] A trickle-down incentive structure could incentivize the Afghan people and militant groups to pursue peace and reconciliation if they become vested stakeholders and direct beneficiaries of their country’s natural resources. While security conditions in Afghanistan’s extractive industries remain a challenge, a review of successful revenue-sharing practices in other countries suggests that a similar practice in Afghanistan may yield long-term gains.

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Chinese Communist Party Cooperation with Gangs and Politicians in Canada: Book Review

Posted on May 23, 2021 by admin

Journal of Political Risk, Vol. 9, No. 5, May 2021

The book cover depicts the words "Wilful blindness" in white against a red backdrop and a world map in black.

The book cover of Wilful Blindness, by Sam Cooper.

Anders Corr, Ph.D.

Publisher of the Journal of Political Risk

Wilful Blindness How a Network of Narcos, Tycoons and CCP agents Infiltrated the West, by Sam Cooper, Optimum Publishing International, 2021, $28.95 CAD.

An investigative reporter in Canada, Sam Cooper, is at the tip of the spear, where China injects money, drugs, spies, and underage prostitutes into all of North America. Cooper provides us with a front-row seat of China’s espionage, drug supercartels, support to terrorism, money laundering, and, for a pledge of support to Beijing, campaign donations to the politicians who lurk around China’s United Front groups in Vancouver, Toronto, and Ottawa. Add to that investigations of trafficking in weapons. Heads of state, including Donald Trump and Justin Trudeau, are linked by the author to the nefarious characters from China who are doing this dirty business.

It sounds too crazy to be true.

But Cooper’s new book, Wilful Blindness, is nonfiction, and based on five years of his investigative reporting on the topic, and confidential sources in Canadian intelligence and police agencies. It vindicates, and brings up to date, a joint Canadian Security and Intelligence Service (CSIS) and Royal Canadian Mounted Police (RCMP) report that in 1997 made many of the same claims. That report, called “Sidewinder”, was suppressed by Ottawa, which at time was trying to ink new trade deals with Beijing.

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