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BUS187 Consulting Report

BUS187 Consulting Report - Dr Reade BUS187 6 November 2008...

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Dr. Reade BUS187 6 November, 2008 Consulting Report on Political Risk: Ecuador 1) According to the trading-safely.com index, Ecuador is ranked at a C when it comes to its political risk assessment. What this means is that Ecuador is considered, “A very uncertain political and economic outlook and a business environment with many troublesome weaknesses can have a significant impact on corporate payment behavior.” 1 One of the major reasons why Ecuador received such a low ranking is because of the election of the current president Rafael Correa who is considered to be an anti-liberal leftwing. Also, Correa recently got an approval of his new constitution which would hand him greater power over the country. Because of this, “foreign investment plunged more than 30 percent last year, giving Ecuador the lowest level in Latin America after Venezuela,” reports the NY Times. 2 2) Given the current political situation in Ecuador it makes it difficult to say that the impact of the risk on ABC Co. will be a positive one. With president Correa with greater power
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