http://localandglobal.wordpress.com/2008/05/05/is-globalization-at-risk/ Jalal Alamgir's views global-local divides and bridges Wed, 04 Nov 2009 21:39:19 +0000 http://wordpress.com/ hourly 1 http://localandglobal.wordpress.com/2008/05/05/is-globalization-at-risk/#comment-39 F Imrana Thu, 21 Aug 2008 16:10:12 +0000 http://localandglobal.wordpress.com/?p=12#comment-39 I agree that companies engaged in cross-border businessess need to be informed (or aware) of local political realities, but there is a difference between being just "informed" and planning to manage the risk. Companies expanding globally would do better to transfer the political risk to a public or private insurer, rather than assuming the risk internally because managing political risk is not their core business. It's best transferred to a firm or company whose core business it is to manage political risk. Of course there is a cost involved. But the cost of the premium can be offset by better financial terms from lenders and the peace of mind that comes with knowing that you are protected in the event of a loss. The World Bank Group's MIGA for instance is a political risk insurer with a substantial portfolio in high-risk, low-income countries. I agree that companies engaged in cross-border businessess need to be informed (or aware) of local political realities, but there is a difference between being just “informed” and planning to manage the risk. Companies expanding globally would do better to transfer the political risk to a public or private insurer, rather than assuming the risk internally because managing political risk is not their core business. It’s best transferred to a firm or company whose core business it is to manage political risk. Of course there is a cost involved. But the cost of the premium can be offset by better financial terms from lenders and the peace of mind that comes with knowing that you are protected in the event of a loss. The World Bank Group’s MIGA for instance is a political risk insurer with a substantial portfolio in high-risk, low-income countries.

]]> http://localandglobal.wordpress.com/2008/05/05/is-globalization-at-risk/#comment-37 The Observer Sun, 03 Aug 2008 15:03:01 +0000 http://localandglobal.wordpress.com/?p=12#comment-37 I like your concept of corporate political responsibility (CPR, no pun intended), and this relates also to another idea that has been taking shape: lobbying for good. Large MNCs have been engaging with government actors, at least in their home countries, for many years, primarily to advance their business concerns. But as more companies go global, particularly into emerging economies still facing widespread poverty, there's an opportunity for companies to create social impact through their political activities. These could include lobbying for changes in working conditions, property rights, or anti-corruption laws -- issues that will benefit both the companies but also the societies in which they seek to operate. The large MNCs may be more suitable to engage in such activities early; but for the slightly smaller, still semi-global, firms whose roles as political actors are still fairly new, it will be important to identify their approaches quickly as they adapt to the global marketplace. I like your concept of corporate political responsibility (CPR, no pun intended), and this relates also to another idea that has been taking shape: lobbying for good. Large MNCs have been engaging with government actors, at least in their home countries, for many years, primarily to advance their business concerns. But as more companies go global, particularly into emerging economies still facing widespread poverty, there’s an opportunity for companies to create social impact through their political activities. These could include lobbying for changes in working conditions, property rights, or anti-corruption laws — issues that will benefit both the companies but also the societies in which they seek to operate. The large MNCs may be more suitable to engage in such activities early; but for the slightly smaller, still semi-global, firms whose roles as political actors are still fairly new, it will be important to identify their approaches quickly as they adapt to the global marketplace.

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