World Investment and Political Risk 2011

The World Investment and Political Risk report examines the overall trends in political risk perceptions, foreign investment intentions, and longer-term demand for political risk insurance (PRI), especially in emerging economies.

The research conducted for the report includes an Economist Intelligence Unit survey of multinational investors that addresses their risk perceptions for developing countries in the short and medium term. It addresses foreign direct investment (FDI) in the Middle East and North Africa in light of the Arab Spring, as well as the reaction of multinational enterprises to those developments.

The 2011 edition provides an in-depth analysis on the risk of expropriation—perceived risk, actual dimensions, and preferred containment strategies. It found that the probability of disputes between governments and foreign investors is materially increased by an economic shock and/or significant political shift.

Finally, the report focuses on the PRI market and how it can support investment into developing countries. The survey found that heightened global risk perceptions have prompted investors to employ a wide variety of risk-mitigation tools, including PRI. PRI issuance has grown, not only in absolute terms, but also relative to FDI.