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.
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.
China (79) and Brazil (96) are considered medium risk. They perform better than other emerging nations due to the strength of their economies, but still are associated with considerable risks; China in the areas of human rights, rule of law and water security, and Brazil for vulnerability to pandemics and CO2 emissions.
The GRI forms the centrepiece of Global Risks Atlas 2010, which includes 34 risk indices in all, accompanied by interactive maps for the easy identification of risk worldwide.