Politics is a very risky business that causes minor and major effects in the system of a

country. During elections, many aspiring politicians campaign to introduce themselves together
with their platforms to encourage people to vote for them. This is not applicable to all countries
because of their government system but most of the democratic countries experience this kind of
elections. These aspiring politicians has their own specific projects for the betterment of a
country, and they let people know it as a form of their campaign. These campaign period occurs
before elections and may be in the form of advertisement in the television, posters and meeting
de avance. After the election period, the elected officials have the power to monitor, govern and
rule the flow of everything inside the country. They are also responsible in making the country
prosper and gain wealth, they are also the one who needs to prioritize eradicating the sickness of
one’s country—poverty. Some of their projects for the betterment of a country may cause good
and bad effects for its countrymen.
International businesses are also affected with the governmental dispute in some other
countries affecting other country minorly and majorly. There are risks that politics may cause
and this is divided into two levels: the macro level and the micro level. Macro political risks
affects an entire country, and all of the economically based businesses are negatively affected. In
addition, macro risk is a sort of political risk that can affect all of a country's enterprises. It can
be political or induced by macroeconomic variables outside the control of the government. A sort
of financial risk related with political or macroeconomic concerns is known as macro risk.
Interest rates, exchange rates, unemployment rates, price indexes, housing starts, and agricultural
exports are some of the macroeconomic variables that generate macro risk. There are still
macroeconomic variables that was stated in the video that I watched, and these are listed from
the least to the worst: changes to tax and labor laws, regulatory restrictions on business, currency
and exchange controls, terrorist activity, expropriation, or government seizure of property, and
lastly, the worst case scenario is war. If these macroeconomic factors can affect an entire
country, there are microeconomic risks given that can only affect a specific company or group of
business and even all group of companies from a specific country. But first, what is
microeconomic political risk? It is a type of political risk that happens in a small scale. This
includes as mentioned in the video that I watched, specific regulations, breaching of contract,
discrimination in taxes, restrictions in profit, and violence.
In managing political risks, we must consider the following guidelines and restrictions
implemented by one specific group of people who has the power to do such authority—
specifically the government. They can manage these risks by reducing, monitoring, and insuring
everyone involved in such ways that can benefit both of the parties. These political risks tend to
surpass the ability of making a country grow on its own, leaving a mark of hindrance to the
country’s road to growth and being wealthy. To prevent such possibilities, the government,
group of companies and businessmen has the ability to form organizations to control these risks.