Making Political Risk More Politically Relevant

Journal of Political Risk, Vol. 7, No. 12, December 2019

Alicia N. Ellis, PhD, Arizona State University

Ukraine’s Independence Square in Fall 2013, taken only months before it erupted into violent protests culminating in the overthrow of the sitting government. A busy commercial and tourist hub that day, there was no sign of the war zone it would soon resemble. Photo: Alicia Ellis.

Executive Summary

This report assesses the state of the academic literature on political risk and evaluates its contribution to understanding and mitigating risk for both business and political professionals. This assessment concludes that policy-relevant research has been in some cases limited and, in most cases, ineffectively communicated. Several major problems contribute to the persistent disconnect between policy, industry, and academia. Political scientists do not approach their research questions in a communicable way, nor do they often take the necessary step of connecting their research to an end use. Risk rating organizations have become overly reliant on cross-national aggregate models. Mixed methods research has been applied inappropriately and thus, ineffectively. Systematic biases have been introduced to models at a structural level, and conceptual difficulties plague some of the most basic questions for risk analysts.

Despite these problems, opportunities do exist for bridging the gap between research and practice, and producing policy-relevant research. This article proposes some recommendations for moving forward. Research questions must be structured in new ways to reflect the needs of end consumers that include non-academic professionals. Several research agendas in need of a practical-minded researcher are put forth, including the rise of China and what it means for global trade patterns, the ‘buy local’ movement spreading across the United States, and the problem of democratic consolidation. For each problem identified, the article makes suggestions for how we might reframe the questions in a way that produces more useful research on political risk. Continue reading

Forget Presidential Politics: Sri Lanka’s Green Movement Is Its Best Hope Against China

Journal of Political Risk, Vol. 7, No. 11, November 2019

By Bertie Harrison-Broninski

Pumps dredge sand to reclaim land at the site of a Chinese-funded 1.4 billion USD reclamation project in Colombo on December 5, 2017.
Half of the reclamation project to build Colombo Financial City, previously known as Colombo Port City, has been completed, with Sri Lanka hoping to turn it into an international financial centre with special laws protecting foreign investment. / AFP / LAKRUWAN WANNIARACHCHI / Getty Images

Sri Lanka, like many countries in the Belt and Road Initiative (BRI), is not powerful enough to resist China on political or economic grounds – but hope lies in its burgeoning environmental movements.

This Saturday (November 16th), Sri Lankans go to the polls to elect a new president. The frontrunners are Sajith Premadasa, current Minister for Housing, Development, and Cultural affairs, and Gotabhaya Rajapaksa, the ruthless military leader who played a large part in defeating the ‘Tamil Tigers’ during Sri Lanka’s civil war. Both have family ties to ex-presidents: Premadasa’s father, Ranasinghe, was president 1989-1993, and Rajapaksa’s brother, Mahinda, was from 2005-2015.

International media has largely focused on the geopolitical implications of the Rajapaksas regaining power. Mahinda Rajapaksa is seen as a key player in initiating China’s current economic ‘debt trap’ over Sri Lanka, which has now led to 99-year leases on territory around Hambantota Port and Colombo, where China is constructing an entire ‘Port City’. A President Gotabhaya Rajapaksa would rightly be seen as a return to China-friendly Sri Lankan foreign policy after President Maithripala Sirisena’s more US-aligned years in office. Continue reading

War In The Taiwan Strait Is Not Unthinkable: Some Will Lose More Than Others

Journal of Political Risk, Vol. 7, No. 11, November 2019

By Grant Newsham

Screen capture of Chinese state media video of People’s Liberation Army (PLA) troops training for an assault on Taiwan’s presidential office. Pictured is a mock building at the Zhurihe military base in China, that mimics the actual building in Taipei. The video aired July 5, 2015. CCTV via Apple Daily.

Whether anyone actually ‘wins’ a war is a philosophical debate.  The Germans and Japanese in 1945 might have thought wars do indeed have winners.  But perhaps it’s better said that in most conflicts some parties ‘lose more than others.’

Such would be the case if Beijing attempted to militarily subjugate Taiwan.  And Xi Jinping just might do so.  He declared in a January 2019 speech that “we (China) do not promise to renounce the use of force and reserve the option to use all necessary measures (to take Taiwan.)”[1]

The Battle for Taiwan would have truly global consequences, akin to the invasion of Poland by the Soviets and Germans in 1939.

However, much of the debate over a Taiwan Strait conflict focuses on preparation for and conduct of the PRC’s attack: whether Beijing will or won’t attack, what an attack might look like and Taiwan’s ability to defend itself, whether the US will or should get involved and whether it ought to sell Taiwan ‘this or that’ weapon.  Such discussion is useful, but the actual consequences and longer-term ripple effects of a fight over Taiwan deserve much more attention.[2]

This paper examines key aspects of what happens once the shooting starts, and the follow-on global economic and political effects.  The envisioned scenario is a full-scale PLA assault against Taiwan, but it’s worth noting that even a ‘limited’ assault–such as against one of Taiwan’s offshore islands–may not stay limited for very long: given Beijing’s oft-stated determination to take all of Taiwan, an off-shore island assault would only constitute a tactical objective in the march on Taipei, and would also have serious and wide-ranging political and economic consequences.

Continue reading

Greenpeace Working to Close Rare Earth Processing Facility in Malaysia: the World’s Only Major REE Processing Facility in Competition with China

Journal of Political Risk, Vol. 7, No. 10, October 2019

By Michael K. Cohen

Partial screenshot from the Greenpeace website, taken on 10/3/2019, detailing Greenpeace’s leading role in the ‘Stop Lynas’ campaign. Source: Greenpeace.

Rare earth – the colorful metals derived from 17 extraordinarily hard-to-mine chemical elements – are a little-known part of all of our lives. They are crucial elements of mobile phones, flat screen televisions and more than 200 other consumer electronic devices that we use every day.

But these exotic elements are needed for more than just phones and televisions. Their lightweight properties, and unique magnetic attributes, are indispensable to military assets that use sonar, radar or guidance systems, lasers, electronic displays, and myriad other mechanisms.

The vast majority of rare earths that countries need to protect themselves are produced by one country: The People’s Republic of China. And it does not appear that the situation will change in the near future. China has in recent years worked to monopolize the production of these elements as a strategic resource.

China has made rare earths available to countries around the world that need them, but that could abruptly change. Chinese state-controlled media has warned that sales of rare earths to the United States could be restricted as part of a new front in the ongoing trade war. Continue reading

Arctic Enterprise: The China Dream Goes North

Journal of Political Risk, Vol. 7, No. 9, September 2019

By Jonathan Hall

Arctic Ocean, ship on Barents Sea. Getty.

Until recent years, harsh weather and unmanageable navigation routes have precluded all but the most determined crews from venturing through the Arctic. As climate change continues to take effect, however, warming temperatures are opening up the region to new opportunities. In 2017, for example, merchant ships were able to pass through a shipping lane, known as the Northern Sea Route (NSR), for the first time without icebreaker escort.

The NSR has since been discussed as a logistical windfall that will revolutionize the world of international shipping. The often-cited reasoning is the potential 5,000 mi (8,000 km), or 10-15 days saved in transit, as compared to more traditionally used routes such as the Strait of Malacca, or the Suez Canal. While the NSR is only open three months per year, climatologists predict it will be traversable for 9 months out of the year by 2030, and completely ice free within the next two decades. As these changes are coming into effect, no state seems to understand the geopolitical advantage a strong presence in the Arctic will bring more so than the People’s Republic of China (PRC). Continue reading