The impact of Globalization has had an effect on political risk too. Usually developing countries have unstable governments and volatile sociopolitical environments. Even as the world becomes a global village, different national cultures, ideologies and aspirations continue to create political conflicts. Developing countries have their own macroeconomic goals and focus on a catch up rate of growth, industrialization, increase in employment and repayment of heavy foreign debts .A developing countries political system may not have reached a maturity and would like to legitimize itself in face of ethnic, religious or other competing group. The combinations of these factors could have an impact on the quality and stability of political institutions and in turn influence the investment decisions of Multinational Companies.
Political Risk In Singapore is relatively low. In fact according to the Political And Economic Risk Consultancy, PERC, Singapore enjoys the lowest political risk in Asia. Singapore being a democratic country has elected representatives to rule the nation. It has since Independence, enjoyed relative political stability, which has transformed into better business opportunities for the nation.