Managing Country Risk

Chapter 1

Country Risk in Perspective

When you consider what a mystery the East Side of New York is to the West Side, the business of arranging the world to the satisfaction of the people in it may be seen in something like its true proportions.

Walter Lippmann, 1915¹

Introduction

It became fashionable for political and economic pundits to declare in 2011 that as a result of the arrival of the Arab Spring, the world had become a more dangerous place, and that the risks associated with conducting cross-border business had risen. One could perhaps legitimately make such an argument in the countries directly affected by the Spring, but was cross-border risk in 2011 really more generally perilous than it was in, say, 1988 or 2001, when global shock ...