In recent years, investors have learned the hard truth that
in the international economy, politics often matters at
least as much as economic fundamentals for the performance
of global markets. Too many companies and investors haven't
yet learned to read the warning signs: their expertise lies
much more in economics than politics, and the temptation is
to hope that highly volatile situations such as the 2008
Georgia-Russia confrontation will be few and far between.
But as Ian Bremmer and Preston Keat demonstrate, these
scenarios--and their catastrophic effects on
business--happen much more frequently than we imagine. On
the curve that charts both the frequency of these events and
the power of their impact, the 'tail' of extreme political
instability is not reassuringly thin but dangerously fat.
This groundbreaking book is the first to both identify the
wide range of political risks that global firms face and
show investors how to effectively manage them. Written by
two of the world's leading figures in political risk
management, it reveals that while the world remains
exceedingly risky for businesses, it is by no means
incomprehensible. Political risk is unpredictable, but it is
easier to analyze and manage than most people think.
Applying the lessons of world history, Bremmer and Keat
survey a vast range of contemporary risky situations, from
stable markets like the United States or Japan, where
politically driven regulation can still dramatically effect
business, to more precarious places like Iran, China,
Russia, Turkey, Mexico, and Nigeria, where private property
is less secure and energy politics sparks constant
volatility. The book sheds light on a wide array of
political risks--risks that stem from great power rivalries,
terrorist groups, government takeover of private property,
weak leaders and internal strife, and even the "black swans"
that defy prediction. But more importantly, the authors
provide a wealth of unique methods, tools, and concepts to
help corporations, money managers, and policy makers
understand political risk, showing when and how political
risk analysis works--and when it does not. Authored by Ian
Bremmer (author of the bestselling The J-Curve) and Preston
Keat, the president and research director (respectively) of
Eurasia Group, the world's leading political risk
consultancy firm, The Fat Tail is an indispensable guide for
anyone involved in the international economy.
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