Podesta Group

In an increasingly competitive and globalized economy, companies are looking abroad for new markets and opportunities. This year alone we have seen how breaking political developments at home and abroad, from the passage of free trade agreements, to wholesale societal and governmental changes, to the birth of a new nation, can change the investment environment and create promising possibilities overnight. With the right positioning and shrewd government relations, nimble organizations that are primed to seize the initiative can gain a competitive advantage.

While there is great potential in exploring new opportunities overseas, there can also be considerable risk in doing business in an unfamiliar environment. Companies need a comprehensive approach to assessing the benefits and potential pitfalls. They also need a strategy for developing the relationships that will enable them to make the right decisions – and can make all the difference in the ultimate success of a venture. That is why as businesses have begun to think globally, smart government relations professionals have followed suit. As former staff director for the US Senate Committee on Foreign Relations, I am part of the seasoned Podesta Group team of international strategists equipped for meeting multinational corporations’ growing needs. 

Every new opportunity requires a unique strategy carefully tailored to address a company’s objectives and the situation in a particular country. Once a potential business opportunity has been identified, however, there are some basic factors to consider and questions to answer in determining whether to move forward. These include: 

• Understanding the Investment Environment: Evaluating a potential opportunity abroad starts with understanding the basic environment for foreign investment. The objective is always to minimize risk, but it is also important to plan for all contingencies. Key threshold issues to consider include: respect for the rule of law; regulatory environment; transparency and corruption; protections for property rights; and treaty agreements. 
• Assessing Political Risk: The greatest opportunities sometimes exist in the most uncertain environments. As the Arab Spring made clear, it is important to understand the political situation in a given country -- and region -- before making an investment decision. Key assessments include political stability within the country and across the region and the country’s relationships with its neighbors and any potential conflicts. It is also very important to understand if the country respects basic human rights, freedoms, and labor standards – and any potential for adverse public relations. 
• Gauging US Policy:  US government policy and our bilateral relationship with a given country can also play a role in evaluating a business opportunity. The impact can range from leverage if there are issues that need to be addressed, to damage to corporate reputation, to potential sanctions in extreme cases.  Beyond understanding the current context, it is important to assess US policy and legislative objectives and the officials responsible for advancing them -- and the variables that could be in play.
  It is also worthwhile to explore whether the government is providing any investment incentives. For example, the Overseas Private Investment Corporation (OPIC) provides significant financial support for US companies that invest in certain countries where there are development objectives that advance US national security interests.
• Connecting with Key US Officials: Developing personal relationships with key US officials on the ground is essential. The Secretary of State has emphasized the importance of promoting US business interests as part of our bilateral relationships, and US embassy officials from the ambassador on down can be key resources and allies.  The level of responsiveness can vary depending on the size of the company and potential transaction, so personal relationships are critical. It is also important to establish relationships with the local American chambers of commerce. Finally, it makes sense to reach out to members of Congress from states that have a connection with a given company – they will usually be supportive, and can be helpful if necessary. 
• Building Relationships with the Local Government: Finally, and perhaps most importantly, it is crucial to have access to the key government officials who will be making decisions that can have an impact on investment. These can range from the lower level officials who grant necessary permits or approvals, to the ministers in charge of foreign investment, to those in the highest levels of the government. It is also very helpful to have relationships with the foreign embassies in Washington and national business leaders.