Political risks rising
The world’s economic conditions are improving, but political risks are growing, according to Aon Risk Solutions.
Its 2011 Political Risk Map shows more countries at increasing risk of disruption than the number with declining risks.
The Aon map measures such risks as currency inconvertibility and exchange transfer, strikes, riots and civil commotion, political interference and supply chain disruption.
More than 211 countries are rated on a six-point scale from low to very high.
The war risk category has jumped from 29 to 34 with an additional five countries simmering.
Sabotage, riot and civil commotion risks have also jumped from 100 to 111 and the legal/regulatory risk category rose by 10 countries to 104.
Political interference has also risen from 85 to 88, with countries such as Afghanistan and Zambia added to the list, and sovereign non-payment has gone from 87 to 88.
Aon Crisis Management Team Director Beverly Marsden says the perceived or actual risk of sovereign non-payment continues to be an issue in countries across the globe.
“We have seen 13 island nations move into a high risk category this year because of the effect of a decline in tourism on their economies,” she said.
But she says there is some good news, with a 30% increase in the number of countries becoming more active in the world economy and in turn more prosperous.
She says political risk will continue to be a major influence on business with emerging markets this year.
“We believe that political risk will remain elevated while the markets are unstable, but will return to traditional levels as the world economy improves.”