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 →

Physical Vulnerability of the Internet

Posted on November 7, 2013 by admin

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

Tom Elliott, Ph.D.
Managing Consultant and Vice President

On March 27, 2013, while the technology world preoccupied itself with a sophisticated cyberattack on a spam prevention service, a low-tech assault on the Internet was taking place in shallow waters off Alexandria, Egypt. Three men with scuba gear and a fishing boat were arrested while allegedly trying to cut one of the main communications cables that links Europe to the Middle East and Africa.[1] This incident of hacking – in the most literal sense of the word – should remind us that the Internet we all rely upon depends upon physical infrastructure, much of which is easily located and relatively unprotected.

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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.

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Stalemate in Egypt: Expect Years of Insurgency vs. Autocracy

Posted on October 14, 2013 by admin

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

Map of Egypt. Source: University of Texas.

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

Egypt is on the verge of being engulfed by a long-term insurgency. After a brief period of democratization following the Arab Spring, the world’s most populous Arab country has returned to a popular military dictatorship. General Sisi will likely lead the country, either as power behind the President, or as President himself. The primary difference between the Egypt of Sisi and the Egypt of the pre-Arab-Spring Mubarak will be a function of the overthrow of the democratic Islamism of President Morsi. A new outraged minority with pro-democracy and pro-Islamist beliefs fielded popular protests, and was repressed with lethal force. A significant minority of that minority will now divert their energy towards terrorism and organized insurgency.

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Constitutional Change Needed to Avoid Future US Shutdowns

Posted on October 6, 2013 by admin

United States Capitol Building photographed in black and white.

United States Capitol Building. Artwork by Damian Brandon.

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

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

The United States is, and continues to be, a politically stable country. Despite a shutdown of non-essential federal government services that started at midnight on October 1, uniformed military personnel and most federal services, including the postal service, federal courts, and federal prisons, will remain open and functional. The “shut-down” is more accurately described as a temporary defunding of non-essential federal services. A spending bill will pass within the next few weeks, and non-essential government services will return to normal. Nevertheless, the appearance of a shutdown of the United States Government has huge reputation costs both domestically and internationally.

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