Sovereign risk is one thing, but given Trump has begun withdrawing troops from around Africa & the Middle East & the extreme
Left have taken the White House in 2021, I would say the potential for geopolitical risk would be climbing. Just look at the Obama administrations mark on the region over the 8 years prior to Trump, wars, famine, ISIS & mass migration flooding Europe. This could spur on political instability in the region as well as economic problems.
Trump Orders Withdrawal Of Nearly All US Troops From Somalia | Zero HedgeTrump Is Said to Be Preparing to Withdraw Troops From Afghanistan, Iraq and Somalia - The New York Times (nytimes.com)China is a major player on the African continent, as well as the Middle East, & we all know how well that relationship is going.
"In fact, it already appears that Africa is set to become yet another battleground for the escalating trade war between Beijing and Washington."A new cold war in Africa | Asia Pacific | Al JazeeraAfrica could set the stage for a new "cold war" between two of the biggest economic powerhouses on the planet. It looks like a "powder-keg" to me.
China-US rivalry in Africa fuelled by coronavirus - BBC NewsThe US-China trade rivalry is underway in Africa (cnbc.com)China–United States trade war - WikipediaHere's a scenario to ponder, the
American DFC might fund Karibib & the ore gets sent off to the Middle East & refined into battery grade chemicals, great! But
China, already engaged in a trade war with the US, might take offence to any product coming from a manufacturer, producer or exporter from Africa that's received
American funding instead of
Chinese investment.
So what does China they do? They could outright ban any of those products entering the Chinese markets or slap such a large tariff on the products that it will make Chinese investments exporting from the African region to China look cheaper.
There goes LPDs battery market in China. Currently most of the world's EV batteries are made in China. Where to next, Europe? China has invested billions in Europe through the "Belt & Road" initiative & has their thumb over many of the countries there as well.
Just look at what China has done to Australian wine makers lately.
Geopolitical risk, please research it when considering investments in certain parts of the world.
All IMO.
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