We highlight how the top five global risks are playing out at a regional level. Highlighting the geopolitical and security challenges facing our highlighted countries; China, Brazil, South Africa, India, Spain and the USA.
RiskMap 2020 Special Edition
Maps | RiskMap 2020 Special Edition
Political risk evaluates the likelihood of government interference and political instability, and their impact on the business environment. Political risk assesses general political stability and policy issues such as regulatory change, high-level corruption, reputational risk, expropriation and nationalisation, contractual interference, sovereign default and non-payment, and international sanctions. While the rating applies generally to the designated jurisdiction, political risk may vary considerably between industry sectors and investor nationalities.
Security risk evaluates threats to the financial, physical and human assets of a company, as well as the willingness and capability of public security forces to protect corporate assets and personnel. Factors assessed include military conflict, insurgency, terrorist attacks, strikes and riots, vandalism, kidnapping, and violent and acquisitive crime. Security risk may vary for companies and investment projects because of factors such as industry sector, investor nationality and geographic location.
Our partners at Oxford Economics have chosen five measures that they believe to be the most relevant for assessing economic risk in a given country: exchange rate, demand, cost, sovereign credit, and trade credit. They rate each of those measures on a scale of 1 to 10, with 10 representing the highest risk. The exchange rate, demand and cost ratings are produced using a series of multivariate risk models. These models rank countries on a variety of metrics related to economic riskiness, transform these rankings into a set of sub-indices scaled from 1 to 10, and then combine these sub-indices into a composite index by equally weighting them.