You cannot (politely or not) simply state "I don't want to work for someone from XY country" without sounding close minded at best, and full on racist at worst (depending on the context etc...)
You have to identify the mechanism that allowed the other party to "hurt" you, and/or the missing mechanisms which should have protected you. Once this is defined, it makes it very easy to decline with business objective reasons:
The contract/job is in this country. Very well, after former disappointing business experiences with a similar contract setup, I am afraid I can only consider working in this environment again if:
- condition 1
- condition 2
- etc ...
This way the onus is on them to either provide you the guaranties you want ... or to decline.
Sure you can even be cheeky and ask for crazy conditions which you know would be rejected, but this is not the most professional behaviour, and it can even be seen as offensive in some culture. So if you plan to decline anyway, better follow Stephan answer: just decline without explicit justification.
In any case, DO NOT simply decline stating only your dislike of doing business with/in a specific country. Either decline abruptly without justification, or detail the specific reasons which makes you not feeling safe to practice business there.
Ignore the carrot:
I have been hurt very badly a few times from clients from this
country, so I told myself never again will work for them even if
offering me $1M.
Then what if they offer $2M ? ... will you consider it ?
That would be looking at the wrong thing anyway. If you only look at the carrot, you do not see the man with a stick and a string holding the carrot and moving you like a puppet.
You were not hurt because they weren't offering you enough in the first place, I'm assuming (guessing) that you were hurt because you were not given what you were promised in the end, or because nothing happened according to plans and everything went belly up.
So a repeat of that scenario would definitively be hurtful, but a higher expected pay off would in no way guaranty less pain if in the end this number is just a figure with no tangible aspect (might even increase frustration actually).
Know your enemy
I worked several years in a country, culturally very far from most western ideology, but so wealthy that countless western business men come to try their luck and have a bite at what appear to be a golden apple. With time, it became a routine to see a major proportion of these go back home empty handed (some with barely a shirt to wear even after having significantly invested). Ok for a few of them this was just the result of bad management, but a significant number simply got screwed (sorry for the lack of a better word) by their mandatory local partner.
This was ~15 years ago (my very first assignment). The pattern observed was so frequent that it did make an impression on the young me, and I must admit that for a while after I left the country, I did have similar thoughts like:
I'll never work in this country or for people from this country again
but a rational train of thought (and exposure to several other business cultures) quickly turned that into:
"I'll never work in this country in the same conditions, however, provided certain safeguards are in place to limit the (now identified) risks, then it become no more risky than some transactions/jobs with other countries or business cultures"
So Know your enemy.
Remember that at list you have exposure to this specific business culture, so you know the obvious traps and pitfalls. Doing business knowing that is sometimes less risky than doing business with a new partner ... which might look appealing (yeah yeah, this one is from the same country than me, the village next door actually, and he has got a nice carrot of $2M, promised!) ... but who might still stab you in the back at the first opportunity.
Incidentally, as an example, my current company receive numerous quote requests for equipment to be shipped in a very similar country. I was impressed and terrified at the same time when my boss stood his ground and systematically asked 50% of the contract sum before we would start any manufacturing (Our products are worth ~500k$ a pop and take about 6-8 months to be produced) and the remaining 50% before we would box the products and actually ship them.
This is quite 180 degree from the classic line of business we are. In western countries it is not rare to place products directly on customer location, in "consignment", and the product is only invoiced if/when it is used.
Well, sure enough, most quotes do not receive much attention, but we do get responses. And those who respond are the one who are actually interested and didn't have a tricky scheme planned behind. At this point the discussion can be opened and there is still time to review the terms of the mutual protection if the initial ones are too strict for them (escrow accounts and other international safeguards).
In the end, the one which didn't follow up where:
- the scammers (yep, they are in every line of business)
- the cheap ones who think they can make the money to pay for the product with the product (Not saying that some of them are not genuinely honest, but we are not a credit facility and we don't have the capital to support these guys).
- the massively huge number of "one man company" (or a few more) who just try to be the middle man (they see a tender somewhere so they ask quote all around in hope to be able to grab a hefty commission for just a few phone calls).
So putting these conditions was an effective way to filter a lot of the unwanted business cases, yet still remaining open to this market, and discover a few loyal and honest customers ...