StudentShare solutions
Triangle menu

Country Risk Assessment: Romania - Essay Example

Not dowloaded yet

Extract of sample
Country Risk Assessment: Romania

Most of the businesses manage their risks through financial techniques such as insurance, hedging and ROI calculations. But to develop an effective contingency plan it is important to undertake the economic, political and social evaluation of the country in which the investment is planned to be undertaken. It is not possible to prescribe a significant formula but a relatively common analytical framework can be established. Although many indicators are available which can eke in the process of country risk assessment but some common but important indicators are useful in undertaking a successful evaluation.
The risk assessment techniques have to put up with several shortcomings, which undermine the application of these techniques. First and foremost problem is the availability of right information. Some researchers state the fact that the data that reported for FDI in some countries are different from the reality and is overstated. About of flight capital later returns ("round-trips") as FDI when opportunities emerge. (Gunter, 2004)
The techniques tend to become biased according to the judgements of evaluator since there are not set criteria to determine the dangers with any degree of certainty. The kind of risk and the degree of risk are completely dependent upon the evaluator's will. The social, political and the cultural beliefs of the evaluator can effect the results.
There are some set indicators, which are used as crucial factors in determining the risks attached to a country. An evaluator should undertake the analysis of all the different disciplines and levels. The open theories address all the aspects such as political social and technological extending its scope from other theories, which are confined only at studying the economic consequences. The government policies of privatization and nationalization of the industries in the host country are also important matter of concern. In Romania the Government is taking steps to privatize energy, steel and metal working companies. The other economic indicators include the GDP, Inflation rate, GDP per capita. The figures for Romania revealing the economic conditions of the country are as follows:
Indicators
2005
2006
GDP (USD billion)
79.910
89.657
Real GDP growth (constant prices)
5.0%
5.0%
GDP per capita (USD)
3602.677
4053.548
Inflation rate
8.8%
6.9%
Source: IMF - 2005 data
In today's global economic environment the degree of economic freedom is also an indicator of immense importance which comprises seven major areas to be tested for economic freedom. The seven areas covered by the index are: 1) size of government, 2) economic structure and use of markets, 3) monetary policy and price stability, 4) freedom to use alternative currencies, 5) legal structure and security of private ownership, 6) freedom to trade with foreigners,
and 7) freedom of exchange in capital markets. (Conklin, 2002) The most revealing indicator of an economy's performance is the GDP growth rate. In Romania the GDP mitigated in 2005 due to floods and the increase of imported products. This was a lower growth rate, which was 8.3% in 2004. The scenario explains that the CRA techniques cannot be ...Show more

Summary

In case of the introduction of an innovation in a market the domestic markets benefit from the diffusion of new technology. In the other case when the labour move from domestic firms to foreign firm technology diffusion takes place. The benefits in shape of capital financing it generate put forth the idea that FDI plays an important role in the modernisation of economy and increasing the growth…
Author : carlotta91
Country Risk Assessment: Romania essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Country Risk Assessment: Romania"
with a personal 20% discount.
Grab the best paper

Related Essays

Risk Assessment
In a situation involving terrorism, the threat is the individuals or groups of people that are present. They have the ability and a past of expressing purpose for using actions that are perceived as hostile. Sometimes, they use actual procedures that are hostile against potential targets.
9 pages (2250 words) Essay
Risk Assessment
Risk for individual occurrence is measured as a function of relevant statistics and data pulled from child advocacy studies and current media. The resulting data shows that privacy concerns are the most likely to occur with cyber bullying, identity theft, and sexual exploitation rounding out the list.
5 pages (1250 words) Essay
Morocco Country Risk Assessment
According to the paper Morocco has taken initiatives to attract more investors by establishing conducive business environment and political stability. In addition to development of effective infrastructure system, the government has embarked on privatization of essential services thus attracting foreign direct investment resulting to reduced level of unemployment. To ensure growth of trade and business in Morocco the government has also formed trade partnership thus creating ready market for finished goods.
4 pages (1000 words) Essay
Risk Assessment for Retail Property Investments in Ireland and Europe
In Europe, the third highest level of shopping centre space per capita belongs to Ireland after Holland and Sweden. A number of foreign retailers from different countries like America, Britain, China, Spain, Switzerland, Australia and Portugal have established them in Ireland and added to the boom in the retail property market (Market News, 2006).
12 pages (3000 words) Essay
Evalutating country risk analysis
Country Risk Analysis (CRA) has thus emerged as a measure to identify the imbalances that can arise through cross border investment. (Meldrum: 2000). Risk measures include a number of indicators which are economic as well as socio political summarised as a comprehensive CRA.
4 pages (1000 words) Essay
Romania
Even though this was not foreseen by Western countries, Ceausescu was to become a tyrant who was later to deliver the above diatribe to a Women's Council meeting in the mid 80's. Towards the end of the 1960's, however, he even earned respect from the West for his denunciation of Russia's invasion of Czechoslovakia.
3 pages (750 words) Essay
Risk assessment for a de novo company in a developing country
This paper is an assessment of the building of an automobile parts factory in China. It will analyze several risk factors, and establish a vision and goals for the enterprise. This is a joint venture with a regional government in China, which has the opportunity to develop automobiles in one of the fastest-growing automobile markets in the world.
8 pages (2000 words) Essay
Risk assessment
rvices, processes and production operation; subcontracting and purchasing activities; off site processes including delivery, installation and servicing; change management (product or process introduction and modifications); legal obligation compliance; and risk quantification
11 pages (2750 words) Essay
Risk Assessment
The main idea of the paper is that it proposes an efficient risk assessment toolkit that will highlight the importance of the IT infrastructure for the non-profit organizations. Every organization possesses certain assets like data, policies and procedures etc that
2 pages (500 words) Essay
Risk Assessment
According to Spoolman & Miller (2011), a risk is the probability of suffering harm from a hazard that can cause injury, disease, death, economic loss or damage and is usually expressed as a mathematical
2 pages (500 words) Essay
Get a custom paper written
by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT
Comments (0)
Rate this paper:
Thank you! Your comment has been sent and will be posted after moderation