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Led by authors Coplin and O'Leary, 85 teams of analysts chart the ebb and flow of political risk on the basis of these critical judgments about the year to come.

Our Political and Economic Forecast Chart (an annual feature in Planning Review), highlights the risks and opportunities to international business as we see them from our perspective as editors of Political Risk Services (PRS) publications, and as the organizers of PRS semiannual conferences on political risk.

Recent events have rewritten the political risk map, for the immediate future and perhaps for the 21st century. Regional issues are charted and key risk factors are scored for 86 countries.

Corporate planners rarely incorporate political analysis into the planning process in the same systematic way that they include traditional business factors. Nevertheless, top management knows that politics can affect the bottom line. Reaching a delicate compromise solution within the corporation between labor and management, for example, can mean the difference between growth or decay. Influencing a trade association to adopt a helpful policy or to provide a valuable service to an individual corporation can create new business opportunities. Securing tax breaks from local or state governments or more liberal environmental regulations from the Federal Government can have a profound impact on business costs.

Corporate and strategic planners for international businesses have always been aware of the importance of domestic and foreign political conditions in defining both risks and opportunities for their businesses. Unfortunately, the complexity and subjectivity of political analysis, along with the lack of valid, relevant, and up‐to‐date information makes it very difficult to integrate political analysis into the planning process. Yet in recent years, the U.S. business environment has been radically altered time and again by international events such as changes in government, outbreaks of political turmoil, increasing or decreasing restrictions on the operations of international business, changes in protectionism, or basic shifts in fiscal and monetary policy. At the very least, planners need a warning system to alert them to possible serious reversals of the business climate.

Continued global recession, weak demand for raw materials, mounting international debt, and the reduction in lending from international banks during the past twelve months will exacerbate political risks during 1983 and beyond. Many governments—especially those in Third World countries—will be wrestling with the opposing strains of trying to satisfy internal consumer demands while at the same time trying to conform to the austere expectations of private and public lending sources. In democratic countries, this means lowered chances for the reelection of those now in power. However, more seriously, in countries where political turmoil is a tradition, there will very likely be an escalation of violence.

Intractable national and ethnic conflicts and destabilizing economic trends of the past five years are fomenting political whirlwinds that will make 1993 a risky year for international business.

President Mikhail S. Gorbachev's rise to power in the U.S.S.R. represents a transition from the old guard to the younger party leaders. However, his regime is based on a collective leadership that will undertake only modest reforms. There is little likelihood that either a more reformist or a more hard‐line regime will come to power in the next five years. No major opening to international business is likely, but some liberalization of imports may occur if domestic economic conditions improve.

Almost overnight the political risk map for the decade has been redrafted. This annual forecast of key risk factors keeps score for some 85 countries.

Business continues to face increasing world‐wide political and economic risks, despite signs of a modest economic recovery. This survey of 80 countries shows risks increasing for exporters and financial institutions. However, companies with direct foreign investment will face little increased risk because the desire for new foreign investment will continue to constrain nationalist pressures in most countries. Political violence from terrorist groups, dissidents, and guerrilla forces is not expected to exceed last year's levels. However, the threat of violence from international hostilities is greater for many territorial and maritime disputes.