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Article

1 Mar 2007

Author:
OECD Observer

Rough Guide: Annual Report on the OECD Guidelines for Multinational Enterprises, 2006 edition: Conducting Business in Weak Governance Zones

How do investors choose whether to set up shop in, say, Somalia rather than Spain, Colombia rather than Canada? For some companies, doing business in…weak governance zones can certainly be profitable, with less competition, less tax and less regulation. Yet the flipside may mean also less legal recourse and support, and potential danger from endemic crime and corruption. The heightened risks encountered in weak governance zones create a need for heightened care. The OECD’s Risk Awareness Tool is designed to help governments and investors consider such dilemmas [refers to Siemens, ABB]