Risky Business in Conflict Zones: Opportunities and Threats in Post Conflict Economies

Abstract

Attracting international businesses and enterprises to transfer both resources and capabilities into post conflict economies is a must for sustaining long term stability, economic growth and success of recovery process. Recently, international business organizations operating in post-conflict countries became more integrated with recovery and transition process of post conflict economies. In this study, the opportunities and threats for international firms operating in post conflicted economies have been evaluated based on literature review. This study also demonstrates that (1) investment opportunities in transition economies are attractive for short and mid-term, (2) capturing undervalued firms, accessing unique marketplace, benefiting incentives, accessing IMF’s and the World Bank’s low cost credit resources and having a good reputation via contributing into stability and peace are just some of the major advantage (3) the loss of control and capital attached to the risk of unstable political conditions, the possibility of high ethnic tensions and violent riots, the lack effective corporate culture and high burden of inside conflicts, the lack of sustainable economic growth and the risk of new tax packages have negative impacts on long term success for the firms (4) the conflict risk itself is major problem dissolving investment conditions.