Current Issues (Political and Legal)

Newspaper article analysis: Political and Legal

This news is about the political instability in Libya that causes riots break out in Libyan city of Benghazi. Before rioting occurs, Libya was considered as an absolutist government country. However, most Libyans wanted to have a civilian democracy, not dictatorship (Barclay 2011). Thus, they started the riots. Normally, rioting will create high ownership and operating risk as it directly damages the property values. For example, during rioting, Libyans’ rebel may steal business asset, set building or property on fire. Moreover, if people who are rioting, they are not working. Additionally, those who are not involved in the disturbances are also affected, such as employees cannot get to work and companies cannot carry on with their businesses as usual. Political risks increase the risks of investment, and make the investors feel uncertain. To eliminate or reduce the investment risks, foreign investors may employ a group of experts in the country to give advice and share their opinions independently or use quantifiable methods in order to predict the likelihood of certain events. Overall, if this political risk is too high for investors to invest in Libya, they may choose to locate their operations in other safer countries.

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Reference

Barclay, Joey. Libyan Rebels Say They Look for Democracy. April 4, 2011. http://www.newsi.es/libyan-rebels-say-they-look-for-democracy/884252/ (accessed April 24, 2010).

Libyan rebels take control of border crossing. April 22, 2011. http://www.stltoday.com/news/national/article_a6bce23c-86e8-5b71-bf8f-7fbe165a4509.html (accessed April 24, 2011).