@Risk

Earlier this month, Maplecroft released its Global Risks Index (GRI) 2010, which ranks 175 countries on the basis of the 26 most significant non-financial risks faced by international business.

The list of risks analyzed includes:  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 these 24 are from Africa, and in fact, Somalia (1), DR Congo (2), Zimbabwe (3) and Sudan (4) top the ranking.

The two dozen countries at extreme risk also includes these nations characterized by weak governance, internal conflicts and regional instability: Afghanistan (6), Nigeria (10), Iraq (12), Bangladesh (14), Pakistan (15) and Yemen (24).

It’s worth noting that, as Maplecroft points out, several of these ‘extreme risk’ 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 both western and BRIC companies.

Many corporate supply chains also have fundamental links in the Philippines (32), Indonesia (41) and India (42) –all of which are rated as high risk in the GRI 2010. Maplecroft says businesses need to keep a close watch on suppliers in these countries. 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 ranks China (79) and Brazil (96) as medium risk. China poses significant challenges with regard to human rights, rule of law and water security; Brazil is medium risk for its vulnerability to pandemics and CO2 emissions.

The countries rated least at risk in the GRI are predominantly Scandinavian: Norway (175), Iceland (174), Finland (173), Sweden (171) and Denmark (169).