In the global community, the reigning paradigm seems to be political chaos. News updates in all media justifydeclare the seemingly ever-deepening divides in the world – wars in the Middle East, tension between the West and Russia, economic malaise in China, territorial disputes in Asia, Colombian voter rejection of peace, Brexit and so on.
Turmoil also prevails in the global marketplace. Economic growth is stalled around the world, perhaps driven by uncertainty in the political world. With stagnant economic growth, there is political pressure to find means of boosting economic activity in each country and globally. A critical component of economic growth is domestic and foreign direct investment. Private sector investment decisions require promising forecast of return on investment, including tax expenses of the project in question. Stability in this regard is ideal. If there is fear of cross-border dispute or retroactive adjustment (via legislation or otherwise), forecasts may be rendered problematic, thereby undermining confidence and, as a consequence, willingness to invest or commit resources.