With our recent discussion on Political risk, we decided to bring up the topic of U.S. travel warnings. Below, is a link to the U.S. Department of State website, with 29 countries that have been placed on a “Travel Warning” list in 2011. Travel warnings are issued when a country or region is considered dangerous or unstable. Reasons for this may be political instability, military coups, terrorism, or recently as seen in Mexico, violence from local drug cartels. All of which can pose serious threats to travelers in these areas. The U.S. government issues these warning not only to educate its citizens on the dangers when traveling to these countries, but they are also released when the government has a constrained ability to assist American citizens in these countries, due to the closure of an American Embassy or for other political reasons.
Considering what we have covered in class with respect to Political risk,
1st Do you think as a tourist, it is worth the risk to travel in these countries knowing the dangers involved, and what would you do to minimize your threats if traveling. 2nd As a business owner or consultant, would you consider or advise doing business in these areas if the profits were high, if yes, what steps would you take to attempt to manage the political or economical risk involved.
http://travel.state.gov/travel/cis_pa_tw/tw/tw_1764.html
Below is another link with an article about companies managing political risk:
http://smallbusiness.chron.com/examples-companies-managing-political-risk-18262.html
William & Lauren
17 comments:
As for the first question, I would probably avoid places that have high threat of violence or upheaval. If you are travelling for pleasure and going somewhere to relax, why would you knowingly go somewhere that could possibly be detrimental to your health? It would be best to just avoid those areas.
However, as for the second question, I think that if the profits were high enough it could outweigh the possible troubles. You would want to make sure there is extra security and that you work with the government of the U.S. and in the host country to make sure that it can be as safe as possible.
I would try to minimize my travel to countries with a high threat level. I personally do not want to be killed on vacation! If I absolutely had to, I would do everything within my power to not seem too American in that I would conform to their customs.
For the second question, I think I would not want to subject my company to a troubled area of the world just for the sake of profit. If I was already in a country with political upheaval, I would do my best to remove my operations if it seemed long term, but I know money will always be an issue in dealing with business.
first, as an american tourist i don't think it's worth the the risk travelling to high danger areas. why risk being detained for an unspecified amount of time in a foreign country. If i did travel to these countries, i would try to disguise my american nationality so not to stick out as a target. second, if the potential for high profit margins were high, i would advise in favor of doing business there. Necessary steps to manage that risk: research of the laws and government, knowledge of the culture and historical background, consulting with people who have connections to the area, form relations with appropriate government authorities and regulatory organizations, ensuring you have strong legal team to remedy disputes, and proper security measures to protect your capital. --alex
I don't think that it is worth the risk to travel in countries that have a travel risk. You are a prime target for kidnapping simply by virtue of being foreign. I suppose you could avoid the most dangerous parts of the country, but you're playing with fire.
As a businessman, it is possible to continue to do business in these countries. However, you must remove yourself from the dangerous parts of the process. Do not accept responsibility for the goods getting to the domestic market. Rather, require domestic companies to transport them from an international port to their domestic market. All of the risk is on them.
David Mouron
As a traveler, you have the weigh the risks. In some of these countries the risks are too high and not worth it. There are too many countries that I want to visit that I can wait for these places to become safer or avoid them if they never do become safer.
Businesses are all about creating wealth, but they must weigh profits agains safety. I personally would not want to put my people in harm's way. Also, I think the companies would like at the political structure and have to consider if the region would be profitable if there is so much instability.
The pleasure to be gained from traveling abroad will never outweigh the risk of traveling in a dangerous area for me. While traveling anywhere involves risk, the high risk associated with countries like Mexico is prohibitively high.
I think I would only do business in a high-risk country if I were practically guaranteed a high profit. Besides the economic risk, there is personal and emotional risk for everyone involved, so it must be considered very carefully and with every aspect of the venture in mind.
As a tourist, people should listening to certain guidelines proposed by their country because countries like the U.S not only care about their citizens inside their borders but also care about them while travelling to other countries. So listening to these guidelines have more benefit than loss, at least this is what I think.
No, if I was a business owner, I would not have my business location in these locations due to the risk involved. In some countries, when the government wants to take over a business, they just come in and kick the owner out and the owner has no saying. This usually happens to companies who seem to be making high profits. So it would be pointless to put your business in one of these countries and have a chance of having it taking over anytime by its government.
Before traveling to any country we need to understand the risks. Each location has a potential to be dangerous or not. That said, I think that anyone can travel to any country safely under certain regulations or protection from an agency.
From a business standpoint I think that doing business in a country where there is high risk would be a bad idea. The cost of managing the risk alone seems like a hassle. Maybe a medium risk location would be more manageable?
Depending on the country and why the travel risk was issued would be my consideration if I were to travel there or not. Of course, I would do my research to see if it would be worth the risk to travel there. Every country in the world presents different risks upon traveling. You just have to analyze the different variables of the risk to assess the actual danger involved.
As for business, the travel warnings would definitely be something to consider. Some countries provide a great place to conduct business. For example, Nigeria is an ideal place for construction companies dealing with the construction of oil pipelines. Nigeria has a huge oil industry. However, there is a travel warning to two of it's states which happen to be the two most profit producing states. There is a lot to consider when deciding if it's actually worth doing business there. Sometimes travel warnings are issued because of kidnappings or robbery of tourists. This may not be as big of an issue for say a construction company as opposed to people wanting to visit Nigeria. It's all substantial and dependent upon the situation.
As a tourist, I think a simple solution would be to find another destination. Obviously if there are political risks to me traveling to a a certain country, I would not feel safe enough to just want to vacation there. As a business manager, I would try to find a safe way to travel there, and I would do as much research as possible to know all about why there are safety precautions against traveling there.
The Department of State dedicates a lot of time and resources to researching the safety and stability of other countries. I think unless there is a dire situation to travel to a country (like a family event) that U.S. citizens should trust the judgement of the DoS and avoid traveling to them. Americans could find themselves in dangerous situations such as violent protests, natural disasters, legal issues, and attacks that the U.S. government cannot protect them from.
When traveling abroad, there are always risks to be aware of and taken into consideration. Considering the list of countries placed on the travel warnings, I would be very cautious when traveling to these countries, if I would even consider going. I say that because in several of these countries, it is no protection for the citizens, therefore, Americans have little to no assistance in situations grave danger. Secondly, I would not consider placing a business in a country of high risks only because I feel like the welfare of the employees is far more important than any financial gain.
Well its sad that the government had to do something like this but I do understand when the government feels limited in helping its citizens. As for doing business, there are a lot of ways to do business without physically being there, like franchising. So the stability of a country cannot prevent a business man from making his money.
As a tourist the countries listed on the state's website really don't interest me. Besides Mexico I don't see myself going to one of those places but there are dangers associated with going to any foreign country. Deciding what countries are worth the risk is personal opinion. One can always minimize risks during travel by preparing ahead of time and being well educated in the specific dangers. Of course there are always the steps of not carrying cash, carrying a copy of your passport not the real thing, and traveling with others. As far as being a business placing facilities abroad, personally I would avoid hostile countries. With oil companies and military contractors avoiding dangerous companies is not as easy as a private corporation. Sometimes there is more to consider than just high profit (employees safety is a concern).
I would not travel to a country with one of these travel warnings for pleasure. In fact, I had to postpone a trip to Japan last year, and a big part of why I didn't go was the fact that the there was a State Department warning. However, other students who were studying abroad at that time decided to stay. It depends on the level of risk you are personally comfortable with. As far as taking business to one of these countries, I suppose it depends on the nature of the business. In many cases locals will be the majority of the employees at such a facility, and if the profit is high enough, I would probably do it.
I think that if you are going to travel for pleasure, you would be best to avoid areas that are notoriously dangerous. People who are traveling for missions and aid are more likely to visit those kinds of places.
Also, if I was a business owner, I don't see the sense in working out of a country that is highly politically unstable, and I certainly wouldn't want to submit any of my employees to having to go to a dangerous country to work and live. All in all, even if the profits are higher, it would not be a wise business move.
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