Using this definition, kindly define and describe the global risks that surround the global political environment. list $3$ risks. In your discussion, provide examples attached to the chosen risks. and remove plagiarism$-$Political Risk

Clearly, as evidenced by the $2011$ Arab Spring uprisings, the $2014$ annexation of the Crimean Peninsula by the Russian Federation, and the $2019$ political unrest in Venezuela, major political changes can affect the business environment and risk level almost overnight. As far as political risk is concerned, a survey$$based on $211$ countries and territories$$by Aon Risk Solutions $($the firm discussed earlier$)$ found that the political risk level is rising in more countries than it is declining. That conclusion was based on the level of exposure to factors such as currency inconvertibility and transfer; strikes, riots, and civil commotion; war; sovereign nonpayment; political interference; supply chain interruption; and legal and regulatory risk$\mathrm{.}101$ It is clear from the past that firms operating in some countries are exposed to political risks that can drastically affect them with little warning, as illustrated by the opening profile.

The managers of a global firm need to investigate the political risks to which they expose their company in certain countries$$and the implications of those risks for the economic success of the firm. Political risks are any governmental action or politically motivated event that could adversely affect the long$-$run profitability or value of a firm. Like many countries in the world, certain countries in the Middle East have faced periods of instability in recent decades. As such, political risk heavily influences business decisions in unstable countries.

In unstable areas, multinational corporations weigh the risks of nationalization or expropriation. Nationalization refers to the forced sale of an MNC$$s assets to local buyers, with some compensation to the firm, perhaps leaving a minority ownership with the MNC$\mathrm{.}102$ In April $2012,$ Argentina, under President Cristina Fernandez de Kerchner, announced plans to nationalize Repsol YPF$,$ the Spanish oil company, taking a $51$ percent stake in YPF$,$ which accounts for a third of Argentina$$s oil production$\mathrm{.}103$ In retaliation, Spain announced that it would restrict imports of biodiesel from Argentina. In Venezuela, nationalization was a key policy of the Hugo Chavez regime. Over the past decade, the state seized farmers$$ farms, food processing plants, and retailers$$ supermarket chain stores. Nationalization is not the only driver of food shortages throughout Venezuela. Price controls have forced businesses to operate at a loss or to cease operating. In fact, $75$ percent of private businesses in Venezuela had discontinued as of $2018\mathrm{.}104$

Expropriation occurs when a local government seizes and provides inadequate compensation for the foreign$-$owned assets of an MNC; when no compensation is provided, it is confiscation. In countries that have a proven history of stability and consistency, the risk of expropriation is relatively low; it is highest in countries that experience continuous political upheaval, violence, and change. An event that affects all foreign firms doing business in a country or region is called a macropolitical risk event. In many regions, terrorism poses a severe and random political risk to company personnel and assets and obviously can interrupt the conduct of business. According to Micklous, terrorism is $$the use, or threat of use, of anxiety$-$inducing $...$ violence for ideological or political purposes.$105$ The increasing incidence of terrorism around the world concerns MNCs$.$ In particular, the kidnapping of business executives has become quite common. In addition, the random acts of violence around the world have a downward effect on global expansion, not the least because of the difficulty in attracting and retaining good managers in high$-$risk areas as well as the expense of maintaining security to protect people and assets and the cost of insurance to cover them. Companies that invest in those high$-$risk areas do so with the expectation of a higher profit premium to offset risk.

An event that affects one industry or company or only a few companies is called a micropolitical risk event. Such events have become more common than macropolitical risk events. Such micropolitical action is often called creeping expropriation, indicating a government$$s gradual and subtle action against foreign firms. This situation occurs when a firm hasn$$t been expropriated, but it takes ten times longer to do anything. Typically, such continuing problems with aExpropriation of corporate assets without prompt and adequate compensation

Forced sale of equity to host$-$country nationals, usually at or below depreciated book value

Discriminatory treatment against foreign firms in the application of regulations or laws

Barriers to repatriation of funds $($profits or equity$)$

Loss of technology or other intellectual property $($such as patents, trademarks, or trade names$)$

Interference in managerial decision making

Dishonesty by government officials, including canceling or altering contractual agreements, extortion demands, and so forth