Each year Aon Trade Credit ranks the
political and economic risk of 209 countries and territories, measuring risk of
currency inconvertibility and transfer; strikes, riots and civil commotion; war;
terrorism; sovereign non-payment; political interference; supply chain
interruption; legal and regulatory risk. The risk in each country was ranked as
Low, Medium-Low, Medium, Medium-High or High.
A country with an "elevated" risk is
defined as any country with a risk ranked at Medium-Low, Medium, Medium-High or
High.
The results of the analysis are
detailed on the 2008 Political & Economic Risk Map, produced by Aon in
partnership with Oxford Analytica, an international consulting firm. Oxford
Analytica draws its analysis from a global network of more than 1,000 experts to
make independent judgments about geopolitical risk.
According to the 2008 Political and Economic Risk Map, multinational organizations in 25 of the 50 largest global economies face elevated political and economic risks - including risks of business interruption caused by war, terror attacks, and political interference.
Some of the countries highlighted are those nations whose economies are among the fastest growing ones. Yet, even some of the wealthiest nations are under risk.
Thus, terrorism threat remains a factor in the UK in light of last year's attempted car bombings in London and Glasgow, while the country has been placed on "Credit Risk Negative Watch" due to its exposure to the sub-prime credit crunch.
Overall, amongst the top 50
economies, the analysis found political and economic risk is at its highest in
the oil-rich nations of Iran, Nigeria, and Venezuela, where businesses face
civil unrest, war, terrorism, and nonpayment by governments for services
rendered. For example, companies doing business in Russia face an increased
degree of state control in the natural resources sector. Additionally, the
global risk management community is increasingly concerned about supply chain
risks in Asia.
The Global Credit
Crunch
Aon has also introduced a new
feature to their Risk Map, the Global Credit Crunch Index, which measures
emerging markets' exposure to international financial turmoil. The index lists
25 nations for which exposure to the global credit crunch is other than Low. It
finds that particularly the newer entrants to the global economy, such as
Turkey, Hungary, and Romania, are more likely to be impacted by a global credit
crunch.
However, while political and economic risks to companies doing business in the United States, Germany, and the United Kingdom remain comparatively low, companies doing business in those countries are potentially more vulnerable to business interruption due to terror attacks than those doing business in Japan, the world's second largest economy.
The complete map can be downloaded as a PDF. Also see the press release in English and German.
To request your own copy of the map, please complete
the
form.
Oxford Analytica, an international
consulting firm, draws its analysis from a global network of more than 1,000
experts - including senior faculty members at Oxford University and at major
research institutions worldwide - to make independent judgments about
geopolitical risk.
- 6
April 6, 2008
Ilyas M. Mohsin, PPP, Platinum Contributor (296)
On an objective level, it appears to be the outcome of a uni-polar world wherein the US neocons won 2 terms for their President by waging costly wars. This has resulted in general destablization and massive devastation in the'occupied' countries. It has led to undermining of US laws as well major International protocols.
while US economy is crumbling fast, the peace in the world is going down with it. those who can't fight back with equal resources resort to terrorism. this is the lesson since the start of the 20th century. As millions have been killed, the threat from the aggrieved party remains
substantial. While nobody can condone terrorism wherein mainly non-combatants suffer, including business interests, it seem unavoidable in view of the misadventures undertaken by the US in the last 7 years.
Unfortunately the second-stringers in development would suffer much more. However, that is what the current Global Economic set up is all about.