Journal of Political Risk, Vol. 4, No. 10, October 2016

Oil-tankers docking in Rotterdam, Holland. Source: Creative Commons/Public Domain.

Reza Yeganehshakib, Ph.D
University of California, Irvine (UCI)

The oil industry has experienced numerous fluctuations in crude prices during its history. Falling prices in 2014 developed into a historic downturn by 2016, reaching lows that were last seen in the 1990s. As a result, several oil giants were forced to decommission almost two thirds of their rigs, while also dramatically decreasing their investment in the upstream oil industry.[1] Counter-intuitively, the crude shipping industry did not go through the same catastrophic loss as its upstream counterpart. Iran, one of the world’s biggest oil exporters and crude shipping operators, experienced this firsthand.[2] While the country’s oil revenue sharply declined, its crude shipping industry grew. This situation was not without problems, however, as explained herein.

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Journal of Political Risk, Vol. 4, No. 8, August 2016

Julian M. Campisi

Introduction: A Macro Analysis of Political Risk

Nigel Farage, leader of Britain’s UK Independence Party laughs as he points to a UKIP poster, before delivering a speech on the forthcoming EU referendum, in London, Friday, April 29, 2016. (AP Photo/Kirsty Wigglesworth)

The concept of political risk has landed at the forefront of media and scholarly outlets in the fields of international politics and economics after a turbulent first half to 2016. Exposure to a number of recent global ‘shocks’, including the latest waves of terrorist attacks, Brexit, and a failed coup d’état in Turkey, has led to a renewed sense of political and economic instability across the globe. However, until recently, the majority of scholars and practitioners working in the sub-field of political risk have mainly engaged with the political and economic factors that affect investments in developing economies—albeit for good reason. In many such countries, the stability and profitability of foreign investments or business ventures is more difficult to guarantee and to predict due to concerns related to political volatility, social upheaval, expropriations, and regulatory uncertainties. Yet developing nations are at the forefront of political risk analysis precisely because of the potentially lucrative business opportunities that accompany fairly rapid economic growth and development in frontier markets. Indeed, recent global foreign direct investment (FDI) flows to developing countries, spurred by growth in Asia, significantly outweighed those to developed ones as table 1 shows below.

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Journal of Political Risk, Vol. 4, No. 7, July 2016

Jeremiah S. Pam

Remarks at a symposium on ISIS: Navigating Conflict with Non-State Actors / The University of Texas School of Law, 15 April 2016

‘Prudentia’ sculpture on roof of 16th century town hall, Gross-Umstadt, Germany. Photo by: Frank Rumpenhorst/picture-alliance/dpa/AP Images

I. Introduction

In considering this conference’s subject of how the international community should respond to the challenge of ISIS, I suspect we can all agree that it is imperative that we be informed by our recent experiences with interventions in Iraq and Afghanistan. Of course, the difficult question is how those experiences should inform us. Given my own time in Iraq and Afghanistan, it is perhaps not surprising that I have a few observations from those cases that strike me as potentially relevant, to which I will turn very briefly in a moment.

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Journal of Political Risk, Vol. 4, No. 6, June 2016

Peter Solomon

Flag atop a Chinese Coast Guard vessel near Panatag/Scarborough Shoal in the South China Sea. As seen from a Philippine fishing boat on Philippine Independence Day. June 12, 2016. (Photo credit: Anders Corr and Kalayaan Atin Ito.)

China is cruising toward the finish line in what has become an uncontested race for power in the East Asia-Western Pacific region. There is no question China’s leadership understands that in order to retain the reins of power it must keep pace with the demands of its population, which is the largest in the world. After three decades of at least 10 percent GDP growth, however, the 2010s have proven difficult for China to attain that level of achievement. China’s transition to a consumer-driven economy, moreover, means that China’s growth rates will likely continue to contract as the middle class expands and cheap labor-intensive jobs move elsewhere.

One way China seeks to support its historically high growth rates is by expanding its territory and power-projection capabilities in the South China Sea. This expansion, for example, involves China’s increased naval presence and China’s transformation of half-submerged reefs into artificial islands boasting newly constructed runways in the region. China’s expansion and its professed ownership of 85% of the Sea — including reefs, islands, sand barges, and rocks — conflicts with the historic claims of ownership of such nations as Malaysia, the Philippines, and Vietnam.

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