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Economic and political stability

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Economic and political stability are important factors to be considered when finalizing an international investment. What are some specific risks of investing in politically and economically unstable countries? Cite real life examples.

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Economic and political stability are serious issues when deciding to invest abroad. There are different ways that organizations have measured the level of stability and government control in different regions. In South and Central America, for example, the number of coups and changes of government as well as the ...

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All the discussion about the political, social, and economic competitive advantages in the Southeast Asia region took to Li and Xu (2007) researched how the level of freedom influenced economic development in seven Asian economies (China, Indonesia, Korea, Malaysia, Philippines, Singapore, and Thailand). The findings showed that an open economy was the critical factor in economic development, as well as the disconnection between economy and politics in terms of freedom and economic influence (Li, and Xu, 2007).

Specific factors of growth related to political stability include:
• Rapid exports
• Economic policy to foster entrepreneurship
• Rapid growth in manufacturing
• Rapid industrialization

It is clear that political stability rather than a specific political system, as well as the disconnection between political pressures and economic policies are critical variables for the economic growth. Do you agree? Disagree? Why or why not?

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