World Geostrategic Insights interview with Arseny Varshavsky on how to navigate highly complex political landscapes by integrating diplomatic insights with corporate strategy to mitigate operational risks and ensure cross-border business success, with a specific focus on Latin America.
Arseny Varshavsky is a business development, political risk, and government relations professional with more than ten years of experience in diplomacy, geopolitical analysis, and international stakeholder engagement, with a primary focus on Latin America.
Before moving into consulting, he served in the Russian diplomatic service in Uruguay and Nicaragua, with regional coverage of El Salvador and Honduras. During this period, he authored a substantial body of analytical reports and participated in complex cross-border negotiations.
Today, Mr. Varshavsky advises international research and institutional clients and prepares political-risk and market-intelligence papers to help organizations build strategic partnerships and navigate emerging markets. He holds bachelor’s and master’s degrees from the Moscow State Institute of International Relations (MGIMO) and is completing a PhD in political science. He works professionally in English, Spanish, and Russian and also speaks French. Outside his analytical work, he is an active musician and a lifelong competitive swimmer with a strong interest in the international sports industry.
Q1 – How has your experience working in politically complex diplomatic environments shaped your approach to assessing business and political risk?
A1 – I would like to begin by noting that diplomacy, both as a profession and as a distinct form of art, involves immersion in the unfamiliar and often complex environment of a host country. Such realities reflect the interplay of its history, socioeconomic conditions, political institutions, public expectations, and the distribution of influence within the government. Business interests are equally important. Political decisions affect companies, while major domestic firms and multinational corporations may, in turn, shape government priorities.
Any political or socioeconomic situation should therefore be understood as the product of a broad set of underlying conditions. These primarily include the interaction of national institutions, informal channels of decision-making, and the international political climate, all of which affect economic performance and public sentiment.
My experience has taught me to examine political and business risk through the interaction of formal institutions, economic interests, personal networks, and external pressures. Any serious assessment should identify who officially holds authority, who exercises influence in practice, and how policy decisions are likely to be implemented. This distinction can be especially important in smaller countries in Central and South America, where formal procedures frequently coexist with personal ties, informal negotiations, and concentrated economic interests. This is precisely why direct engagement with those involved in the relevant decision-making process is becoming increasingly important.
It is also essential to distinguish public rhetoric from actual intentions. Governments may declare that their policy remains unchanged even when domestic priorities, economic pressures, or political calculations point in a different direction. For companies, this disconnect may create regulatory, reputational, or operational vulnerabilities.
Therefore, my approach to risk-assessment consists of a combination of institutional analysis, stakeholder mapping, political incentives, implementation capacity, and the broader international context. The aim is to determine which threats can be managed, which require specific safeguards, and where political complexity may create commercial openings. A sound assessment should help a company protect long-term value, strengthen its market position, and prepare for changes before they affect its operations.
Q2 – Which skills and methods developed in diplomacy are most valuable for professionals working in international business development, government affairs and political-risk advisory?
A2 – Building on my previous point, diplomacy encourages a systemic view of political and commercial developments. As I noted earlier, every event in politics and business emerges from the interaction of multiple processes, some of which may initially appear to have little direct influence on the outcome. Diplomatic experience sharpens this broader perspective and deepens one’s understanding of how decisions are made in practice. Applying this approach calls for several specific skills.
One of them is stakeholder mapping, which involves identifying formal decision-makers, institutional gatekeepers, informal advisers, business representatives, and other actors capable of shaping the outcome. Successful engagement depends on knowing whom to approach and understanding the interests, constraints, and relationships of those involved.
Diplomats must also be able to operate with incomplete and sometimes contradictory information. Political and commercial decisions often need to be made before the full picture becomes clear. This entails comparing official statements with observable behavior, evaluating the credibility of different sources, and distinguishing temporary signals from deeper changes. Scenario analysis helps leaders anticipate several plausible developments and prepare appropriate responses.
Equally valuable is the ability to distill complex information into concise, decision-ready analysis. During my diplomatic career, I regularly prepared briefings for senior officials who needed to understand the central issue, the interests of the parties involved, and the likely consequences within tight time constraints. Business executives face a similar challenge. They need to know what has changed, why it matters, how it may affect their operations, and which measures merit consideration.
Active listening and negotiation form another essential part of this skill set. Effective communication depends on careful preparation, cultural awareness, and a clear grasp of the other side’s priorities. Significant signals are often conveyed indirectly through word choice, hesitation, or subjects a counterpart avoids. Recognizing these nuances can improve commercial negotiations, market-entry strategies, partnership development, and relations with government authorities.
Discretion, patience, and the ability to build trust complete this set of professional capabilities. These qualities help specialists anticipate obstacles, reach the relevant stakeholders, and translate political insight into practical recommendations for business or public policy.
Q3 – In your transition from diplomacy to independent consulting, what have you learned about the ways geopolitical developments affect corporate strategy, market access and commercial performance?
A3 – Perhaps the most important lesson is that geopolitical change can alter the conditions under which a company operates before its full effects become visible in commercial performance. Diplomatic analysis often focuses on broad questions, including a government’s intentions regarding a specific issue or the overall stability of its institutions. Consulting must trace the consequences of such shifts through concrete business channels, including market access, payments, supply chains, reputational exposure, and many other areas. The work therefore draws on a wider range of data and moves at a faster pace. Besides, diplomacy is usually centered on a particular region, while political consulting demands the broadest possible understanding of processes unfolding across the world.
Geopolitical risk affects each company differently depending on its sector, ownership structure, geographic footprint, and reliance on government approvals. A policy shift may constrain one firm while opening new opportunities for another. Sanctions, trade controls, or deteriorating bilateral relations can force businesses to reconsider their markets, partners, payment channels, and supply routes.
Access to a market is also influenced by political and reputational considerations. Formal authorization to operate may be insufficient if regulators, banks, investors, or customers view a company’s presence in a particular jurisdiction as problematic. Decisions on entry, expansion, or withdrawal therefore require a clear assessment of the broader geopolitical environment.
Timing matters just as much because, for example, if a crisis in a particular country becomes public, the room for strategic maneuver may already be limited. Political signals, institutional debates, and shifts in official language can help businesses anticipate change and adapt before their operations or financial results are affected.
In my view, political-risk advisory is most valuable when it informs a specific corporate decision. Its purpose is to identify which strategic assumptions remain valid, where the principal vulnerabilities lie, and what steps may preserve access to markets and sustain commercial performance across several plausible scenarios.
Q4 – Which political and institutional factors are most frequently underestimated by companies entering unfamiliar or emerging markets?
A4 – Building on my earlier points, companies entering an unfamiliar market often study legislation and economic indicators closely, yet devote less attention to how political institutions operate in practice. One of the most commonly underestimated factors is the gap between formal rules and their application. Regulatory frameworks governing investment, taxation, licensing, and public procurement may appear clear on paper, while enforcement remains inconsistent because government agencies lack sufficient capacity, coordinate poorly, or exercise broad discretion.
Companies may also misjudge how influence is distributed among political and economic decision-makers. A formal title does not always indicate who can advance, delay, or block a particular course of action. Governing-party figures, regulators, state-owned enterprises, regional authorities, influential business groups, and informal advisers may all shape how policy is implemented. A well-connected local partner can provide access to the relevant institutions, but dependence on a single network may become a significant vulnerability following an election, cabinet reshuffle, or internal dispute.
In this regard, cultural differences are among the factors most frequently overlooked, especially by U.S. and European companies entering Latin American markets. In many developing countries, commercial relationships are built through trust, regular interaction, and sensitivity to local hierarchies and communication norms. Firms that rely exclusively on formal procedures may misread their partners’ expectations or damage promising ties, potentially placing the venture at risk. This, in turn, can place the business itself at risk. Because practices differ considerably across the region, cultural awareness must be grounded in local knowledge and sustained engagement.
Companies also tend to equate political stability with policy continuity. To an outsider unfamiliar with a country’s political realities, conditions may appear calm even as fiscal pressure, public dissatisfaction, institutional rivalry, or changing foreign-policy priorities gradually alter the operating environment. Effective market-entry analysis should therefore assess institutional capacity, identify centers of influence at several levels, and examine whether existing relationships and official commitments are likely to endure amid political change.
Q5 – As competition among major powers reshapes trade, investment, technology and supply chains, how should companies adapt their growth strategies? Can a multinational company remain politically neutral in an increasingly fragmented international environment?
A5 – For several years, we have been experiencing a period of turbulence rarely seen since the end of the Cold War. Long-standing arrangements and alliances are being reconfigured, while established economic models face growing pressure. Governments and private corporations alike must respond to these shifts. As competition among major powers reshapes the global economy, geopolitical analysis has become an integral element of business strategy.
Selective diversification offers the most practical response. Companies should identify where excessive dependence on a single supplier, market, transport corridor, technology platform, or financial channel could jeopardize their operations. Alternatives can then be developed around the most critical dependencies.
Major investment projects should also be assessed against several plausible geopolitical scenarios. Sanctions, tariffs, export controls, investment screening, diplomatic disputes, and restrictions on data or technology can alter a project’s viability. Local teams and established contacts are especially valuable because they may detect changes in official priorities before those shifts become apparent at headquarters.
Maintaining complete neutrality has become increasingly difficult for multinational companies. Decisions involving markets, suppliers, and financial partners may be viewed through the lens of national security or foreign policy, even when commercial considerations remain the primary motive. During my diplomatic career, I repeatedly saw the activities of foreign companies in local markets acquire broader significance once bilateral relations came into play.
Nevertheless, a multinational can preserve strategic independence and limit unnecessary involvement in interstate disputes. Doing so requires consistent principles, a robust compliance system, and sustained engagement with stakeholders across the jurisdictions where it operates. In the current environment, neutrality is best understood as disciplined decision-making without alignment with a particular political camp, combined with a realistic recognition that corporate actions may still carry geopolitical consequences.
Q6 – What practical opportunities and challenges do you see for business development when companies use alternative currencies, including the yuan and Latin American currencies, in commercial contracts with counterparties in the region?
A6 – Existing regional payment systems demonstrate that settling transactions in local currencies can reduce conversion requirements and transaction costs where adequate banking infrastructure is available. More flexible arrangements may also support business development in markets with limited access to hard currency. Such mechanisms, however, do not eliminate exchange-rate risk.
The main challenges include volatility, limited liquidity, uneven access to hedging instruments, foreign-exchange controls, and restrictions on the repatriation of profits. The reliability of the participating banks and payment channels is equally important. Contracts should therefore contain clear provisions governing applicable exchange rates, conversion dates, price adjustments, deferred payments, changes in the settlement currency, and termination. Latin America currently has demand for economists specializing in this field.
From a geopolitical perspective, the choice of an alternative currency requires considerable caution. I would treat it as a case-specific commercial instrument. Used selectively, such currencies can facilitate market access and strengthen a company’s negotiating position. Without adequate safeguards, the resulting exposure may exceed the initial commercial benefit.
Q7 – Drawing on the extensive analytical work you conducted on Latin America during your diplomatic service, what do you believe are the commercial and strategic pillars that currently underpin the relationship between Moscow and the region?
A7 – Based on my experience in the region, I would first emphasize that there is no single model of relations between Russia and Latin America. The strongest ties arise where commercial complementarity is supported by sustained political dialogue and functioning institutional channels.
The strongest commercial foundation lies in the complementarity between Russian exports and Latin American demand. Fertilizers and other agricultural inputs are particularly important to food production across the region, while Latin American suppliers provide the Russian market with agricultural commodities and food products. Energy goods have also gained significance in recent years. Trade remains concentrated in a limited number of sectors, giving these ties a stable base while highlighting their limited diversification.
State-supported cooperation in energy, nuclear technology, industrial equipment, healthcare, and selected infrastructure initiatives forms another important pillar. These areas involve long planning cycles, government approvals, financing, and sustained coordination between public institutions and private-sector entities. My diplomatic experience suggests that favorable bilateral relations can create opportunities, but further progress ultimately depends on technical considerations, specialist training, and agreements with local businesses.
At the strategic level, several governments in the region seek to diversify their external partnerships and preserve greater freedom of action in foreign policy. Moscow views Latin America as an important part of a more plural international system and promotes engagement through bilateral dialogue, multilateral forums, and ties in education, science, and culture. These political connections often establish the institutional foundation for future business initiatives.
The principal weakness remains the gap between political ambition and the execution of commercial ventures. Limited transport links, complex payment channels, financing constraints, and insufficient local presence can prevent agreements from developing into sustainable operations. Even so, a growing number of Russian companies are turning to Latin America as they seek to diversify and expand their business activities.
Q8 – Russia’s relationships across Latin America vary considerably, from close political ties with Cuba, Nicaragua, and Venezuela to more pragmatic engagement with countries such as Brazil (a BRICS member). From a business development perspective, how should companies assess the commercial opportunities, political sensitivities, and sanctions-related risks associated with these different markets?
A8 – Each market must be assessed on its own terms. Closer political relations may give foreign companies easier access to government institutions and create opportunities in sectors tied to official priorities. Yet businesses operating in so-called friendly countries must still remain alert to shifts in the political environment and take cultural factors into account.
In Cuba, Nicaragua, and Venezuela, companies should pay particular attention to the state’s role in the economy, foreign-exchange constraints, institutional capacity, and sanctions exposure. The restrictions applicable to these three countries differ and may change following new sanctions designations or the issuance of licenses. Businesses should therefore conduct rigorous due diligence on prospective counterparties, their ownership structures, conditions in the relevant sector, the banks processing payments, and the proposed structure of the transaction.
Brazil presents a different commercial profile. The scale of its economy, diversified private sector, established bilateral trade, and participation in BRICS create a wider range of opportunities. Even there, ties to Russian entities may raise concerns involving sanctions, banking services, insurance, logistics, or technologies subject to export controls. In many cases, the exposure arises from the specific transaction and the parties involved, not from the Latin American market as a whole.
From a business development perspective, commercial evaluation should be accompanied by a clear assessment of political and legal risks in every market. This creates a direct need for expertise in political analysis.
Q9 – During your diplomatic career, you supported a complex intergovernmental cooperation process involving public institutions, technical experts and corporate stakeholders. What did that experience teach you about coordinating competing interests in a highly regulated cross-border project?
A9 – Any commercial project involving the interests of the participating states requires substantial preparatory work to establish effective contacts between business leaders and government officials responsible for regulating the relevant sector.
Coordinating competing interests begins with distinguishing the shared objective from the specific constraints facing each stakeholder. My role was to align these positions and ensure that all sides understood one another’s concerns. This required accurate stakeholder mapping, clear documentation of commitments, and regular communication among the institutions involved. Senior-level approval gave the process essential momentum, but further progress ultimately depended on the work of legal departments, regulators, technical agencies, and operational teams.
The central lesson was that effective coordination depends equally on negotiation and the ability to present each side’s position in terms the others can readily grasp. All those involved must recognize the language, incentives, and limitations shaping their counterparts’ actions. This is where diplomacy provides practical value: it converts political support into an actionable sequence of legal, technical, and commercial steps.
Q10 – Economic cooperation between Russia and Latin America remains concentrated in sectors such as energy, medical technology and extractive industries. How have financial restrictions, payment constraints and logistical disruption affected the commercial viability of this cooperation, and what legal, financial and reputational risks should companies assess before entering such transactions?
A10 – The key question is whether political interest can be translated into commercially viable cooperation. Financial and political constraints have, to varying degrees, altered the way Russian and Latin American companies conduct business.
Commercial interest remains, but the conditions for cooperation have become more difficult. Financial restrictions have reduced the number of banks, insurers, and service providers willing to handle Russia-related business. Even lawful payments may be delayed, rejected, or made more expensive. Longer transport routes, higher freight and insurance costs, and limited access to spare parts or technical support can further weaken project economics, especially in capital-intensive sectors.
Before proceeding, companies should assess sanctions exposure, beneficial ownership, export controls, end users, payment routes, credit risk, and insurance. Contracts need clear provisions for regulatory change, alternative payment arrangements, suspension, or termination. Reputational exposure should be reviewed separately, since a lawful project may still attract scrutiny.
Q11 – What role do culture and communication play in building trust with stakeholders in Latin America, and where do international companies most often get this wrong?
A11 – Culture and communication play a central role in building trust with stakeholders in Latin America. During my work in Uruguay and Central America, I found that professional credibility depends on respect for established protocol, consistent follow-through, and a high level of Spanish proficiency. It is important to note that the language has a distinct dialect in each Latin American country, and familiarity with these regional variations is essential for establishing long-term contacts and conducting successful negotiations.
International companies often make the mistake of treating Latin America as a single cultural space. In fact, communication practices, institutional traditions, business hierarchies, and attitudes toward time differ across countries and sectors. Strategies developed at headquarters may prove ineffective when they depend too heavily on English, standardized procedures, or insufficient input from teams on the ground.
Another common error is to view relationship-building as an initial courtesy that loses relevance once negotiations begin. Trust is built through regular engagement, attentive listening, and dependable follow-through. Hesitation or an indirect answer may also be misinterpreted in certain situations. Experienced advisers and regional teams can help clarify such signals without reducing cultural awareness to stereotypes.
Personal ties can facilitate dialogue and help resolve problems, but they cannot replace due diligence, contractual discipline, or compliance. Lasting trust develops when a company adapts to local conditions and consistently honors its commitments.
Arseny Varshavsky – Business development, political risk, and government relations professional.