Somalia, DR Congo and Zimbabwe: Three Most Hazardous Countries for Business
The 26 most significant non-financial risks faced by international business have been analysed and rated to create a ranking of 175 countries by Maplecroft, a firm specialising in corporate risk intelligence.
The Global Risks Index (GRI) measures a combination of strategic risks that are having an increasing impact on the global operations, supply chains and distribution networks of corporations. These include: terrorism, conflict, macroeconomic risks, rule of law, resource security, vulnerability to climate change, natural disasters, human rights violations, poverty, and risks from pandemics and infectious diseases.
According to the GRI, 24 countries are at extreme risk, 17 of which are from Africa. Somalia (1), DR Congo (2), Zimbabwe (3) and Sudan (4) top the ranking, whilst Afghanistan (6), Nigeria (10), Iraq (12), Bangladesh (14), Pakistan (15) and Yemen (24) all feature amongst the poorest performing nations and are characterised by weak governance, internal conflicts and regional instability. Several of these countries, including DR Congo, Nigeria, Iraq and Pakistan, are owners of huge oil, gas and mineral reserves, which form important links in the supply chains of western and BRIC companies alike.
High-risk countries also critical to corporate supply chains include the Philippines (32), Indonesia (41) and India (42). Each of these countries poses specific challenges to business that require monitoring. India’s rating, for instance, reflects its poor human rights record, an increased risk of terrorism, high vulnerability to climate change impacts, a low capacity to contain disease, plus high levels of poverty, water and food insecurity.
The GRI forms the centrepiece of Global Risks Atlas 2010, which includes 34 risk indices and interactive maps, allowing for the easy identification of risks worldwide.
Professor Alyson Warhurst, chief executive of Maplecroft, said: “The key to understanding and managing global risks is to view them as interdependent. Increasingly, conflict is triggered by issues relating to poverty and water security, whilst threats to government stability emerge from energy scarcity. The Global Risks Atlas 2010 enables organisations to understand relationships between different global risks in different geographies, allowing them to develop a global business strategy.”
The countries rated least at risk in the GRI are predominantly Scandinavian with Norway (175), Iceland (174), Finland (173), Sweden (171) and Denmark (169) setting the standard for the rest of Europe.