Country Risk Assessment for Global Project Management

Country Risk Assessment 1 | P a g e Northeastern University: College of Professional Studies PJM 6145 – Global Project Management WEEK 5 Assignment: Country Risk Assessment DISHA PATEL Submitted To: Prof: Ravi Andrews 24 th March, 2023

Country Risk Assessment 2 | P a g e Table of Content 1. Introduction 2. Risk Analysis and Assessment 3. CRA for Egypt 4. Risk Mitigation 5. Conclusion 6. Reference

Country Risk Assessment 3 | P a g e Introduction This research will concentrate on country risk analysis and assessment (CRA) and how it relates to managing risk for international projects. After a thorough risk assessment of a specific nation (Egypt, China or Mexico), the paper will discuss risk mitigation techniques for at least three identified hazards and an explanation of the idea of CRA and its significance in global project risk management. Risk Analysis and Assessment It is critical for a firm to be proactive rather than reactive when considering international expansion. When conducting international business, there are several things to take into account. When intending to grow internationally, "Country Risk Assessment" is the initial step to be conducted. This evaluation assesses the quantitative or qualitative value of the political, economic, social, and corporate risks associated with conducting business in a specific nation (ALS group,2014). Often, country rating agencies are where we may get this information. Country risk analysis is, in essence, the assessment of potential risks and benefits associated with conducting business in a certain nation (MBA Knowledge base, n. d). Using the use of PESTEL research, I have chosen to classify nation hazards in this essay. By categorising opportunities and threats into the following groups, it is a strategic tool for evaluating an organization's external environment:  Political: the elements influencing a political party's degree of influence that may change some business possibilities.  Economic: All of the financial metrics and performance that have an immediate impact on the long-term objectives and investments of a business are related to by these qualities.

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Country Risk Assessment 4 | P a g e  Social: elements like cultural trends, geography, or demographic data that study social situations and assess repercussions.  Technological: technical developments that may favourably or unfavourably affect the growth of a market or a firm.  Environmental: This adds up to every aspect that is influenced by a catastrophe, be it environmental, pandemic, or other.  Legal: laws and policies that influence a nation's business climate, as well as certain practises that various firms uphold to remain competitive. Making a plan to reduce the hazards that have been determined comes next when a thorough risk assessment has been completed. The project's resources, communications, team formation and coordination, and decision-making must be the focal points of the strategy. For instance, it may be useful to take into account the political environment of the nation, the potency of its judicial system, and the accessibility of the resources needed to complete the project when establishing a preventive measure for political risk. The accessibility of materials is another aspect to think about. The risk-mitigation strategy should also include methods for keeping tabs on the project's progress and for addressing any issues that could arise during execution. CRA for EGYPT With this specific article, Egypt will be the case study nation. The country's political, economic, foreign exchange, legal, and social risks will all be heavily considered in an extensive risk assessment of Egypt. In order to evaluate the risk, we will research the political situation in the country as well as the economic situation, the legal situation, the exchange rate between the currencies, and the resource availability. The risk assessment will also take into account the

Country Risk Assessment 5 | P a g e nation's social environment and the accessibility of skilled workers. The potential for civil disturbance is included in this. But, there are also advantageous aspects to take into account when analysing Egypt's nation risk. Egypt benefits from a favourable geographic location, a diverse economy, and a sophisticated infrastructure. In recent years, the government has also implemented important economic and regulatory changes, including initiatives to enhance the business climate, encourage private investment, and cut back on bureaucracy. In order to identify four important risks that might impede the worldwide project's overall success, I used the PESTEL analysis method: 1. Political Factor: Egypt has a stable administration and is a presidential republic. The House of Representatives and the Senate make up the nation's bicameral legislature. The president has considerable influence, and the political system is highly centralised. To entice foreign investment and foster prosperity, the nation has been undertaking economic changes. 2. Economic Factor: With a GDP of US$362.7 billion in 2020, Egypt would have one of the greatest economies in Africa. The economy of the nation is diverse, with the service sector making up the greatest portion of GDP. To entice foreign investment and foster prosperity, the nation has been adopting structural changes, including as trade liberalisation, the privatisation of state-owned companies, and improvements to the business climate. 3. Social Factor: Egypt's population is predominately Muslim, and it has a rich cultural history. Although English is commonly used, Arabic is the native tongue. With an average lifespan of 25.3 years, the nation boasts a youthful and expanding population. A considerable gender gap exists in schooling, and the literacy level is 73.9%.

Country Risk Assessment 6 | P a g e 4. Technological Factor: With the government encouraging the growth of the ICT sector, Egypt has achieved notable advancements in the technology field. The labour force in the nation is highly educated and competent, with a large number of scientific and engineering graduates. The nation has also made investments in renewable energy with intentions to enhance the percentage of environmentally friendly energy in the overall energy mix. 5. Environmental Factor: Significant environmental problems Egypt is facing include desertification, air pollution, and a lack of water. The National Program for Sustainable Agriculture 2030, which is designed to encourage sustainable development, is one of the measures the government has initiated to address these issues. 6. Legal Factor: Egypt's legal system is based on civil law, and the nation has been enacting changes to strengthen the judicial and regulatory framework. Moreover, the government has ratified a number of international accords, including the United Nations Convention against Corruption and the World Trade Organization (WTO) (UNCAC). Risk Mitigation At least three of the identified risks will have risk mitigation plans created when the risk assessment is complete. These strategies might include developing project resources, utilizing project communication technology, and putting best practises for project management into action. Moreover, risk-reduction strategies must put a strong emphasis on the formation, management, and decision-making of project teams. The risk mitigation strategies should take both of these factors into account since they have the power and ability to have a negative influence on the project's execution, including the probability of social disturbance and the availability of skilled personnel.

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Country Risk Assessment 7 | P a g e Political unpredictability, terrorism, economic difficulties, and environmental concerns are just a few of the dangers Egypt confronts that might impede its stability and progress. There are numerous measures that may be taken to lessen these hazards. The administration should first concentrate on creating a politically stable atmosphere that promotes economic development and international investment. This may be done through encouraging political and social stability, putting in place clear-cut rules of conduct, and upholding the rule of law. The government should also give top priority to measures that foster the growth of the private sector, such as those that enhance the business environment, cut back on red tape, and broaden financial access. Second, Egypt should step up its campaigns against terrorism by strengthening its intelligence services and putting in place tough security measures. In order to create capacity, exchange information, and coordinate its responses to terrorist threats, the government should also collaborate closely with foreign partners. It should also encourage inclusive social and economic growth in order to address the core causes of terrorism, such as poverty, illiteracy, and social stigma. By implementing these actions, Egypt can lessen the dangers of political unrest and terrorism and provide its people a safer and prosperous future. Conclusion In conclusion, analyzing and assessing country hazards is a critical step in controlling the risks involved in international projects. If project managers first carry out a thorough risk assessment of a specific nation, they will be able to identify potential dangers and devise efficient means for managing such risks. This article gives an overview of the concept of critical risk assessment (CRA) and its relevance in the management of risks connected with international

Country Risk Assessment 8 | P a g e projects after a thorough risk assessment of Egypt and risk mitigation strategies for at least three identified concerns. Reference The authors of the study are Brown, D. A. Cavusgil, S. T. Lord, and T. (2015). Measurement and analysis of country risk for companies doing business internationally The International Business Review, Volume 24 Number 3, Pages 315-324 CIA. (2021). (2021). Egypt entry in the World Factbook. Retrieved from https://www.cia.gov/the- world-factbook/countries/egypt/ Monitor of the Global Risk Scene (2021). Egypt. This information was obtained from the website https://globalriskmonitor.com/egypt. IMF. (2021). (2021). Egypt: A Selection of Concerns The information was retrieved from the website located at https://www.imf.org/en/Publications/CR/Issues/Egy/. Bank of the World (2021). Risk Management Database: Egypt. This information was obtained from the World Bank's website at https://www.worldbank.org/en/country/egypt/risk-management- database . Trading Economics. (2021). Egypt Inflation Rate. https://tradingeconomics.com/egypt/inflation- cpi World Bank. (2021). Egypt, Arab Rep. | Overview. https://www.worldbank.org/en/country/egypt/overview World Bank. (2020). Doing Business 2020: Egypt, Arab Rep. https://www.doingbusiness.org/content/dam/doingBusiness/country/e/egypt/EGY.pdf

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