Political-Risk Management in the Northern Andean Countries

Political risk is an integral part of the mining business in northern Andean countries. Peru, Ecuador, Colombia and Venezuela all have a higher than average political risk compared with other South American countries. Successful operations require good political-risk information, a thorough political-risk-management plan and a strategy to deal with political-risk perception on the part of the investing public. Colombia is perceived as about the riskiest place in the world to do business. A selection of recent headlines reads: “Colombia on the brink” (Economist, 1998), “Colombia’s ship of state is sinking” (Insight on the News, 1998), or simply “Bad news” (US Catholic, 1998). The World’s Most Dangerous Places rates Colombia as “currently the most dangerous place in the Western Hemisphere, and perhaps the world” (Aral and Pelton,1998). And many prospective investors and analysts say to Greystar Resources: “Yes, we love your results, but Colombia?”