Global Risks ‘Hitting’ Business
 10th NOV 2006

Almost half of the world’s countries do not have stable enough conditions for business to flourish in, a report says. Firms regularly face disruption—and often outright hostility— from governments, according to International Business Consultancy Control Risks. Some 96 of the 198 countries surveyed were ranked as posing medium-to-extreme political risks for businesses.

Somalia, Iraq, Sri Lanka and Burundi were among nations identified as being the most risky places to do business. Terrorism will continue to dominate the headlines but should be treated as a risk like any other, requiring detailed contingency planning Control Risks.

 Although political risks had the widest impact on the ability of firms to function, security risks also posed a major challenge to companies operating in different countries, Control Risks said.
Some 78 out of 198 countries - or 40 per cent - were ranked as being medium, high or extreme for security risks, according to the consultant’s Risk Map 2007 report.
“Risk Map 2007 indicates geographically the difficult operating environment for business around the world,” said Control Risks research director Jennifer Harbison.
“However, by being aware of global trends as well as local issues, business can continue to operate successfully in most jurisdictions.” In worst case areas, security risks made business “completely untenable” Control Risks said. Countries considered as posing an insignificant political or security risk for business included Andorra, Norway, Singapore and New Zealand.

Major economies such as the US, Japan and Britain were ranked as posing low political risks - meaning that their political institutions were stable, but there was some possibility of negative policy change. However, China and Russia were among those ranked as posing a medium political risk, where businesses faced greater exposure to corruption, restrictions on imports or exports and weak political institutions. “Terrorism will continue to dominate the headlines but should be treated as a risk like any other, requiring detailed contingency planning,” Control Risks said.
“The exponential growth of transnational crime in areas like intellectual property and counterfeiting are now widely recognised as crucial security issues.”

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