Control Risks Group (CRG) has released its annual RiskMap on business risks worldwide.
Of increasing concern to business is likely to be the enhanced risk of kidnap faced by employees in a growing number of regions. “Allowing for differences of motivation and method, kidnap has become much more of a global issue and new hotspots are likely to emerge in 2009,” says Jonathan Wood, a Control Risks analyst. “It has never been more important for business to understand the dynamics underlying security issues in each country of operation.”<br><br>Kidnapping for ransom has become a global phenomenon and increasingly groups with a political agenda will use kidnapping as a fund-raising tool.<br><br>Although the main driver in the growth of kidnap will remain its adoption by militant groups, the number of piracy incidents involving kidnap is surging – and will continue to do so in 2009.<br><br>CRG speaks of a ‘formidable backdrop of unpredictability’, warning that security flashpoints will intensify, and business will face a challenging landscape of political risk and complex investment opportunities. Also predicted – <br><br>Global economic contagion as hope is abandoned that growth in emerging markets would decouple<br>from mature industrialised countries.<br><br>2009 will be a post-surplus world in which scarcity of key resources increasingly drives political decision-making and poses significant challenges for business.<br><br>While 2009 is unlikely to witness ‘resource wars’, scarcity will have a profound impact on security, operating and regulatory conditions. US foreign policy interests are not expected to change dramatically under President Obama, although he is more likely to work through international bodies than his predecessor, and his major priorities will remain preventing Iran from acquiring nuclear weapons, resolving the Israel/Palestine conflict and the withdrawal of forces from Iraq. The emphasis in the ‘war on terror’ will shift further towards Afghanistan and Pakistan’s tribal areas.<br><br>If the US economy does not improve by the second half of the year Obama will have to resist pressure for protectionism and financial over-regulation.<br><br>Terrorist groups may test the new president’s resolve.<br><br>“In 2009, risk will become still more significant as business is forced to negotiate an increasingly difficult and uncertain landscape”, says Control Risks Research Director, Adam Strangfeld. “It is clear from our analysis that the financial crisis is worldwide – the emerging markets as well as more mature economies are not immune.<br><br>“But not all countries will have the same degree of exposure; and differentiating clearly between markets will become a critical factor in making successful investments; opportunities will remain to those who put a premium on careful pre-investment<br>planning.<br><br>“In many parts of the world, scarcity of resources is a mounting problem that cannot be confined by national boundaries or even regions. In 2009, scarcity will represent a strategic challenge for business that only firstclass intelligence can meet.”<br><br>Ratings<br><br>Countries with areas at EXTREME security risk [* indicates entire country rated at extreme]:<br>Afghanistan, Burundi, Congo (DRC), Iraq, Somalia, Sri Lanka (north and north east), Sudan (Dafur).<br>Countries with areas at HIGH security risk (by region) [* indicates entire country rated at high]:<br>AFRICA: Cameroon, Central African Republic, Chad*, Côte d’Ivoire, Eritrea, Ethiopia, Kenya, Liberia, Niger,<br>Nigeria, Rwanda, Uganda, Zimbabwe*<br>AMERICAS: Colombia, Ecuador, Guatemala, Haiti*, Pakistan, Panama, Peru, Venezuela<br>ASIA: Bangladesh, Burma (Myanmar), East Timor*, India, Indonesia, Papua New Guinea*, Philippines,<br>Thailand<br>EUROPE: Armenia, Azerbaijan, Georgia, Kyrgyzstan, Russia, Tajikistan, Uzbekistan<br>MIDDLE EAST/NORTH AFRICA: Algeria, Palestinian Territories*, Saudi Arabia*, Turkey, Yemen*<br>Countries with areas at MEDIUM security risk (by region) [* indicates entire country rated at medium]:<br>AFRICA: Angola, Benin; Burkina Faso*, Comoros*, Congo, Djibouti*, Ghana, Guinea (Conakry)*, Guinea-<br>Bissau*, Lesotho*, Madagascar*, Mozambique*, São Tomé & Príncipe*, Sierra Leone*, Senegal, South Africa,<br>Swaziland*, Tanzania, Togo*, Zambia<br>AMERICAS: Argentina, Bolivia*, Brazil, Costa Rica, Ecuador, El Salvador*, Guyana*, Honduras*, Jamaica*,<br>Mexico*, Nicaragua, Paraguay, Trinidad & Tobago, United States<br>ASIA: Cambodia*, China, Fiji*, Laos*, Mongolia*, Nepal*, Solomon Islands*, Tonga*<br>EUROPE: Albania; France; Greece; Italy; Kazakhstan*; Macedonia*; Moldova, Serbia, Spain, Turkmenistan*<br>MIDDLE EAST/NORTH AFRICA: Egypt*, Iran*, Israel*, Jordan, Lebanon*, Morocco, Syria.
UK rating
The UK is rated at low for political and security risk, on a scale rising from insignificant to low to medium to high and extreme.
Low political risk is defined as – Business can operate with few problems. Political institutions are stable but there is some possibility of negative policy change. Legal guarantees are strong but business may face some regulatory or judicial insecurity. Non-state actors may occasionally hamper operations.
And low security risk is defined as – Assets are generally secure and the authorities provide adequate security. Companies and personnel face only infrequent exposure to violence from terrorists or criminals; companies are unlikely to be systematically targeted for asset theft.
Extreme is defined as risks being so bad that conditions are hostile, even untenable for businesses.
