Country Z's government may be committed to purchasing a given amount of military supplies,

regardless of how weak the economy is. Thus. Miico's plan to build a military supply subsidiary may still
be feasible, even though Country Z's financial condition is poor.
It is possible, however, that Country Z's government will order its military supplies from a locally
owned firm because it wants its supply needs to remain confidential. This possibility is an element of
country risk because it is a country charactenstic (or attitude) that can affect the feasibility of a project.
Yet, this specific characteristic is relevant only to Milco. Inc., and not to Carco, Inc. ■

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Chaotcr IB: Country Hisk Analysis 453

I his example illustrate how .in appropriate country risk assessment varies with
the firm, industry, and project of concern and therefore why a macroasscssmcni
of coin; try risk has its limitations. A microasscssrr.ciit is also necessary when
evaluating the country risk related to a particular project proposed by a
particular firm.