Chain Reaction From Russia with Risk
Jul 3, 2025
In this engaging discussion, Rachel Ziemba, a geoeconomic and country risk expert and founder of Ziemba Insights, explores the intricacies of political risk in today's volatile landscape. She breaks down the tools of economic coercion like sanctions, detailing how nations like Russia navigate market dynamics. Ziemba reviews the complexities of emerging markets, urging a nuanced understanding beyond traditional classifications. She also emphasizes the importance of clear communication in political risk analysis and the role of personal biases, particularly amid the Ukraine conflict.
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Definition of Political Risk
- Political risk involves above-ground risks like security, conflict, and political changes that affect investments.
- It overlaps with geopolitical and policy risks, requiring horizon scanning and scenario analysis for markets.
Components of Country Risk
- Country risk depends on political instability, policy changes, and macroeconomic vulnerabilities like external deficits.
- Investors must consider sectoral policy impacts and different time horizons when assessing risk.
Risk Factors by Time Horizon
- Assessing risk across time horizons involves examining supply chain relocation, insulation from macro risks, and key players in countries.
- Understanding who wins or loses from policy changes is crucial for scenario analysis.