Any analysis of the management of risk, be it personal risk or business risk, fire, flood, famine – or even country risk – can be of only academic interest without affirmative answers to the following questions:
Will such analysis allow predictions concerning the future?
Will such predictions be sufficiently credible, accurate, and time specific (and different from conventional wisdom) to stimulate decision makers to take actions to avoid these risks?
Are there any such actions that can be taken in a cost-efficient manner?
From the point of view of a direct foreign investor, operating a manufacturing/marketing business in a market, it can be advanced, as at least one credible thesis that:
Country risk is not significantly different in kind from any other home market business risk.
Meaningful country-risk-oriented decisions can only be made at time of initial investment or subsequent major investment or divestment decision points.
Such investors probably operate with far fewer degrees of operational freedom to minimize country risk (again, once they are fully operational) than is generally supposed.
Against this background, it would not be surprising if at least some of us in the corporate world were tempted to answer in a generally reserved vein to the foregoing three questions, when they are posed in connection with country risk analyses and the management of such risk.