With oil prices continuing to defy gravity and tensions growing between oil-exporting countries and their customers, political risk has again become headline news. Parallels are being drawn between the current global economic and political plight and the 1970s, when Western multinationals also experienced a strong dose of political risk in the form of the 1973 oil crisis. As doing business in developing markets -- particularly those countries that were home to oil and mining deposits -- became increasingly risky and politically volatile, the political risk insurance market came into its own. Organization for Economic Cooperation and Development countries set up national agencies to provide domestic companies with export credit and political risk insurance. Yet with political risk becoming more pervasive and taking on new forms, the threat is no longer confined to just oil and mining majors. Increasingly it seems that any company looking to do business in developing markets needs to factor political volatility into the equation.
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