The Need Of Rule For Domestic Investors Compensationguarantee Against Political Risks The Case Of Political Violence

In Ethiopia, there has been social and political unrest in many parts of the country that causesrnmassive loss of human life and destruction of investment assets/properties. These situations notrnonly hinder the flow of investments and the growth of an economy it also entails a hugerneconomic loss in the country. Both foreign and domestic investors in Ethiopia are facingrnpolitical violence risk challenges, though most foreign investors (especially those that have BITrnprotection) have the protection of investment guarantee against political violence throughrndifferent way, there is no formal and rule based compensation scheme for domestic investors.rnActually Ethiopian law has made provisions for protection against expropriation and currencyrnrisk; it however, has failed to provide protection against political violence.rnThus the main purpose of this research is to assess the existence of laws or regulation forrndomestic investments against political violence risks adopted to protect and guarantee domesticrninvestors investment in the form of political violence guarantee scheme. The finding of thernresearcher indicates that there is no explicit political violence risk guarantee scheme establishedrnto protect domestic investors‟ investment in Ethiopia. The researcher also found the existence ofrnsome informal kind of protection, which is not based on law where the government is not forcedrnto act accordingly to protect domestic investors‟ investment. In addition, as per the interviewrnconducted with the Ethiopian Investment Commission officials they believe in the importance ofrnthe establishment political violence risk guarantee against domestic investments.rnBased on the present situation of the political instability in the country, future possiblernchallenges and other countries experience the researcher recommends that the state regulatorrnshould work on establishing the political violence insurance market pool at national level as wellrnas to incorporate the standard of Full Protection and Security in the legal frame work in order tornpromotes and protects domestic investment in Ethiopia.

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