The coming year will continue to astound us with risk that is new, perplexing and, at times, violent.
So says the annual RiskMap from Control Risks, the survey of business risk from the consultancy. Richard Fenning, pictured, CEO of Control Risks, said that international business has to navigate a narrow and sometimes perilous channel between an increasingly globalised market and a resurgence of national self-interest by individual countries. “We highlighted this in RiskMap 2014, and the trend has accelerated rapidly.” He warned that the world seems more discordant and on edge than at any time in recent memory. “Nowhere is this more apparent than in the cyber world. There is little immediate prospect that the threat of cyber crime will diminish. For that to happen there would need to be a degree of international agreement, co-operation and policing that is years away. So long as nation states of all shapes and sizes battle each other online (it is the cheapest form of warfare since the bow and arrow), there will be the space and technological spin-off for criminals and others to target companies, with only the lightest of curbs on their malevolent ingenuity.”
The document as in previous years ranks each country by political and security risk: the UK is rated as low in each category. For more details from the consultancy email email@example.com, and visit www.controlrisks.com/en/register-for-riskmap-report-2015.
Also in the document, Jonathan Wood, associate director, global risk analysis, says that while World War Three is not on the cards for 2015, there are plenty of worrying situations, from Ukraine’s separatists and Pakistan-based militant groups to fishermen in the South China Sea. Alison Taylor, senior managing director, Americas, makes the case that a company’s culture plays a vital role in its approach to risk management.
Control Risks and Oxford Economics announced a new joint venture, for predictive models for anticipating emerging risks, whether political or economic.
As in previous RiskMaps the document ranged over the continents, from the threat of a caliphate in Sub-Saharan Africa to how in Africa the most attractive growth opportunities are in some of the highest risk countries. As for Europe, David Lea, senior analyst, Europe suggests that Europe will have to set aside continued economic distractions to deal with a number of security challenges. Lea suggests that after the Westminster election of May, the next government will be weak, unlikely to survive a five-year term and prone to populist, short-term policies. Also, debate over the UK’s future in the European Union will reduce the country’s attractiveness to business, he argues.
In Latin America, Mexico is increasingly seen as the region’s rising star; a relatively weak economic performance has tainted the image of emerging market darling Brazil. Also covered is the region’s drugs trade. In Iraq and Syria, the consultancy sees little relief in 2015 in the civil wars. And in China, stricter regulatory enforcement is posing significant risks to business. Topics covered include maritime risk, kidnap and extortion, political violence, cyber-security, terrorism, compliance and anti-corruption. On terrorism, Jonathan Wood sums up: “State sponsorship – funding, training, supply, strategic guidance – will increase the capabilities of some groups to conduct attacks. Otherwise, the main terrorism trends affect intent, implying that in 2015 ambitions will continue to exceed capability, particularly in Western countries.”
On cyber, John Nugent, senior analyst, says that advanced tools and techniques will increasingly spread among and between nation states, cybercriminals and cyber activists.
Meanwhile Control Risks recently also published a survey of business attitudes to corruption; see separate article.