Political risk management is vital for foreign investment, as it helps investors assess potential hazards associated with political changes. Countries with robust political risk management frameworks can provide greater stability and predictability, attracting more investors. On the other hand, high political risks—such as instability, corruption, or unfavorable regulations—can deter foreign investment, leading to economic stagnation. Therefore, effective political risk management that identifies and mitigates potential risks is essential for fostering a conducive environment for investment and ensuring long-term economic growth.