Imagine that you work for a large, global company (Power!) that builds power plants for electricity. The power industry has a long-term perspective and requires stable, reliable countries in order to make Foreign Direct Investments. You are assigned to evaluate the following countries for a long-term investment: South Africa, Nigeria, Algeria, and Kenya.
Go over the following political and legal factors, as well as political ideologies:
-How stable is the government?
-Is it a democracy or a dictatorship?
-If a new party comes into power, will the rules of business change dramatically?
-Is power concentrated in the hands of a few, or is it clearly outlined in a constitution or similar national legal document?
-How involved is the government in the private sector?
-Is there a well-established legal environment both to enforce policies and rules as well as to challenge them?
-How transparent is the government’s political, legal, and economic decision-making process?
-Are there tariffs? Subsidies? Import Quotas? Currency controls? Antidumping rules? It is a free trade zone? Administrative policies that make importing difficult?
-Political ideologies?
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