Political Risk Advisory:
Overview

In emerging markets, politics shapes business outcomes as significantly as commercial strategy does. On the whole, Asia's emerging markets remain politically volatile. However, corporations and investors that are able to take calculated risks can expect to gain market leadership and outsized profits.

Emerging Asia provides a degree of customized insight into political risk that other consultancies are unable to. Our analysts and researchers are natives based in-country who speak various national and regional languages and dialects, are well-connected with a variety of government, political, military, media and other sources, and have typically received higher education and training in English-speaking countries such as the USA, Canada, UK, and Australia. This combination allows us to provide our clients with insight that a one-size-fits-all 'Asia Analyst' situated in Washington, DC or London simply cannot, at a level of service that our North American and European clients are accustomed to receiving.

Whereas most other firms provide the same set of metrics and a standard national-level overview of political developments and risk indicators for all countries they cover, Emerging Asia has the ability to provide customized political risk advisory based on each client's unique needs and circumstances. This includes country risk, province-level and urban-area risk, industry and sector risk, project risk, and various combinations thereof.

1. Country Risk

When investing in emerging markets, it is fundamental best practice to have a broad understanding of macro-level country risk, its key drivers, and the key participants of political decision-making and influence. Emerging Asia can provide all that, and more. We monitor key political, social and macroeconomic risk indicators that are customized by country, and we can quickly put together a briefing on country-level risk and future trends.

2. Sub-State / Other Geographical Risk

For most of Asia's emerging markets, an understanding of country-level risk alone is insufficient. Large countries such as China, India, Indonesia, Pakistan, etc., have strong regional characteristics and levels of risk may vary significantly amongst provinces, counties and urban areas. Some areas may provide excellent opportunities for investment and security whereas others are fairly instable or have poor government support. Our clients benefit from the firm's extensive on the ground capabilities, and our ability to provide various sub-national levels of analysis.

3. Industry & Sector Risk

Selected protectionism, state monopolies, and other political interests often lead to wide disparities in risk and opportunity between different industries and sectors within the same country. Emerging Asia can provide advice on those risks for our clients' industries. For investors seeking profitable opportunities, we can also recommend industries and sectors that may provide an acceptable level of risk vs. reward.

4. Project Risk

Even when country risk, regional risk, and industry risk is positively aligned, a particular project may present certain unforeseen risks. Cultural sensitivies, local government interests and priorities, and business partner / supplier / customer risk may be obstacles in the way of an otherwise profitable venture. Emerging Asia can assist clients in dissecting various levels of risk and identifying the motivations and interests of different parties involved in a project.

5. Investment Portfolio Risk Analysis

Emerging Asia works closely with clients in the private equity and hedge fund business in order to support our clients' portfolio risk management goals. We provide inputs that our clients can directly utilize in their internal risk management models. Emerging Asia also monitors investment portfolios and briefs clients when political developments may affect investments within their portfolios. Given our client's portfolio objectives, we also screen investments based on level of risk.

6. Scenario Analysis and War Gaming

For emerging markets with a high degree of political uncertainty, Emerging Asia can help clients foresee possible scenarios and develop strategies to address various outcomes. These exercises help prepare our clients to deal swiftly with crises and other 'unexpected' occurances.