Category Archives: Israel

Political Risk to Investment in Iran: Sanctions, Inflation, Protectionism, War, Bonyads, and the IRGC

Journal of Political Risk, Vol. 1, No. 7, November 2013.

Figure 1: Foreign Investment in Iran and its Neighboring Countries, March 19, 2012-March 19, 2013. Data Source: The Government of the Islamic Republic of Iran News.

Figure 1: Foreign Investment in Iran and its Neighboring Countries, March 19, 2012-March 19, 2013. Data Source: The Government of the Islamic Republic of Iran News.

By Reza Yeganehshakib

Despite a tumultuous recent political history that includes revolution, war and sanctions, relations between Iran and the West are improving and Western investors are increasingly interested. But, Iran’s politics cause sanctions, and the economy suffers from inflation. Protectionist laws are on the books, and in some cases economic crimes are punishable by death. Regardless of warming relations with the West, Iran has in the past reneged on its agreements, and war is still a risk with non-Western bordering countries and regional powers. The Iranian Revolutionary Guard Corps (IRGC) has nationalized foreign investments in the recent past, and the politically powerful revolutionary foundations known as Bonyads control large segments of the most lucrative investment sectors.

Continue reading →

Russian weapons delivery in Syria likely met with cooling of East-West relations

Russian naval vessel in Sevastopol. May 2009. Credit: Pavel Parmenov.

Russian naval vessel in Sevastopol. May 2009. Credit: Pavel Parmenov.

Journal of Political Risk, Vol. 1, No. 1, May 2013.

By Anders Corr, Ph.D.

Russia has deployed at least a dozen warships near the coast of Syria in the past few months, the largest Russian naval deployment since the end of the Cold War. Yesterday, Russia delivered sophisticated radar-guided Yakhont anti-ship cruise missiles to Assad’s Syrian forces. The Russian actions are strategically offensive to the United States, as well its European and Israeli allies. They are meant to dissuade Israel, the US, and Europe from increased involvement. The anti-ship weapons, in particular, are offensive weapons that could be used by Assad’s Syrian forces to attack NATO naval platforms necessary for intervention in Syria  (WSJ, NYT).

Russian actions with respect to Syria complicate the war from a primarily internal issue, to one over international influence between aspirant global and regional hegemons. Because the weapons delivery could be seen to counter Western military actions in the region, they have already increased US congressional criticism of Russia. Such criticism will likely increase in future, especially if the weapons are used against Western assets. This strategic offense to Western military commanders will lead them to more strongly support military options. Ironically, the Russian action increases pressure on Western political leaders to order intervention. Continue reading →

GDP Per Capita and Democracy Explain 87% of the Social Progress Index

Leave a reply
Model 1: Effect of GDP Per Capita on the Social Progress Index

Figure 1. Effect of GDP Per Capita on the Social Progress Index (Model 1)

Journal of Political Risk, Vol. 1, No. 1, April 2013.

By Anders Corr, Ph.D.

Social Progress Imperative, a global group that produces well-being data for 50 countries, released their Social Progress Index (SPI) today. The index compares countries not on GDP, but rather on a single quality of life metric as a function of housing, health, education, and environmental sustainability. The index is backed by Harvard Business School professors and the Skoll Foundation (WSJ).

Sweden, Britain, and Switzerland have the best Social Progress Index scores, because these countries have some of the highest GDPs per capita of the fifty countries in the index. It is no coincidence that the three lowest SPI scores – Ethiopia, Nigeria, and Uganda, have very low GDPs per capita. The best way to understand SPI is therefore to control for GDP per capita. Corr Analytics did simple regression analysis on SPI. Approximately 84% of the index is explained by gross domestic product (GDP) per capita (see technical details below). Countries with large economies relative to their populations will have more wealth that can be channeled to the basic necessities measured by SPI. Therefore the simpler standard used by economists for decades — GDP per capita — works quite acceptably for well-being. Continue reading →