Journal of Political Risk, Vol. 11, No. 1, January 2023
Poster of Giorgia Meloni, leader of the Brothers of Italy Party, 2022. Source: Duncan Cumming via Flickr.
Nationalist identarian right-wing party Fratelli d’Italia (“Brothers of Italy”) was the only major Italian party to oppose former European Central Bank President Mario Draghi’s “national unity” coalition government which governed Italy between February 2021 and September 2022. Among the key campaign promises made by Fratelli d’Italia’s leader and current Italian Prime Minister Giorgia Meloni during the electoral campaign of September 2022 was a break with the economic policies of the Draghi government. However, the first Italian female Prime Minister has thus far demonstrated the opposite orientation.
In fact, Meloni’s sphere of decision making on economic policy is severely limited. Italy’s extremely high levels of public debt (above 150% of GDP) coupled with weak trust from financial markets and the European Union’s tight fiscal rules make it very costly (both financially and reputationally) for any Italian government to finance new public policies. Additionally, investments are currently mainly being made through the European Union’s Recovery Instrument, an ad-hoc fund created after the COVID-19 pandemic which lends money for EU approved projects, greatly constraining the power of the Italian government.
Journal of Political Risk, Vol. 10, No. 8, August 2022
Randfontein Mine, Johannesburg, November 2014. Source: Paul Raad via Flickr.
Ndzalama Cleopatra Mathebula Institute of Risk Management South Africa
Generally defined, political risk is the expected cost or loss incurred by a business due to political decisions, events, and actions. With the evolution of the discipline, it is not only government or organizations that can generate political risks, but also labour unions and civil society that can emanate risks. The South African mining sector includes abundant political risk yet is an attractive investment destination given its large platinum, gold, and coal reserves.
Journal of Political Risk, Vol. 10, No. 3, March 2022
Simon Muwando University of Lusaka
Victor Gumbo University of Botswana
Gelson Tembo University of Zambia
The world has experienced a dramatic increase in the flow of transnational investments following increased internationalization and globalization of firms in the previous decade. Country risk exposure is a cause for concern for all the institutions that are engaged in multinational trade and finance. The main objective of this study is modelling Zambia’s country risk. A mixed method with concurrent research design was employed. Personal interviews were the main instrument for collection of primary data and snowball sampling was used to select the interviewees. Secondary data was collected from the Lusaka Stock Exchange (LSE), Ministry of Finance, Bank of Zambia and Central Statistical Office. An autoregressive distributed lag technique was employed on annual data for the 1994 to 2018 period. This approach was chosen as it works best for small samples. The findings of the study revealed that the short run drivers for country risk of Zambia are beta, current account balance, political risk, unemployment rate and weighted short term interest rates. Current account balance was found to positively affect country risk while beta, political stability, and weighted short term interest rates negatively influence it. The study findings established that the long run determinants of country risk of Zambia are current account balance, betas, political risk, and unemployment rate. From the study findings, current account balance positively influences country risk of Zambia whereas beta, and political stability negatively influence country risk of Zambia. The study concluded that the major determinant of country risk of Zambia in the short run and long run is current account balance as it has significant positive influence. Effective policies need to be implemented by authorities to manage or reduce persistent current account deficits and political risk, in order to manage country risk.
Journal of Political Risk, Vol. 9, No. 10, October 2021
South Africans and supporters gather outside the South African High Commission in London to support students and protest against police violence. Rachel Megawhat.
Stephanie Wild University of Cape Town
The problem of youth unemployment has grown in South Africa for years, but now with the global economy having taken an all-time dip, it has emerged even further at the forefront of South Africans’ minds. Policy geared to expand small business creation in the education sector would be a two-for-one win that keeps on giving.
The crux of the problem
According to Stats SA (2021), in the first quarter of 2021, the official unemployment rate was reported as an astonishingly-high 32.6%. While the number of employed and unemployed South Africans remained rather unchanged from the last quarter of 2020, the number of discouraged work-seekers increased by nearly 7% (Stats SA, 2021). This means that the problem has not necessarily worsened between 2020 and this year. However, it persists and reveals a failure to both ameliorate the problem, and a failure to boost morale that results from the problem. Continue reading →
Corr: Why and when did the Coalition for a Prosperous America begin?
Stumo: CPA started in 2008. Domestic manufacturers, farmers, ranchers and workers agreed that the biggest threat to their well being, and that of the economy, was the large, persistent US trade deficit.
Corr: How is Biden’s ally focus going for him on the issue of trade with China? Is Biden’s outreach to allies helping him on this issue?