By Sarah Townsend
Political violence causes substantial risks to international business, say Aon and The Risk Advisory Group
Terrorism and political violence poses a high risk to international business in two of the six GCC states, Saudi Arabia and Bahrain, according to new research.
Both countries received a ‘4’ ranking in the 2016 Terrorism and Political Violence Map, by Aon in partnership with The Risk Advisory Group.
All of the other GCC states – the UAE, Qatar, Kuwait and Oman – received a ‘2’ ranking, meaning that they are at low risk of terrorism and political violence disrupting international business.
Overall, the Middle East was by far the most active region for terrorism in the past year, due mainly to ongoing conflicts, lack of state control and political instability, with 40% more attacks (1,114) than the next most active region of South Asia (799). North Africa was the third most affected region (491).
The largest number of attacks recorded in the Middle East was in Iraq, which had almost three times as many attacks as the next most afflicted country (Afghanistan).
The report said it recorded fewer attacks in the Middle East than in 2014 – though it did not give a figure – but said this was largely due to “a lack of reliable open-source reporting from the conflict zones in Syria, as well as a blurring of definitions of incidents of terrorism and those classified as irregular warfare and armed conflict or war crimes”.
It added that, despite the dominant threat posed by so-called Islamic State (ISIL), sudden and potentially violent political upheaval is just as severe a risk for international business.
The risk of coup d’état and insurrection has been attached to twelve more countries this year, among them Angola, Saudi Arabia, Kazakhstan, Zimbabwe and Angola.
Henry Wilkinson, head of intelligence & analysis at The Risk Advisory Group, which has collaborated with Aon to produce the Terrorism and Political Violence map since 2007, said: “This year’s Aon Terrorism and Political Violence Map shows a rise in political violence and terrorism risks for the first time since 2013.
“The threat of terrorism looms large, but sudden political change at the top as well as war can arguably be more catastrophic for business.
“These risks are less manageable and less foreseeable and have the potential for cascading political risk ramifications across a region.”
He said businesses needed to be flexible and robust in how they anticipate and manage risks to ensure they contain the potential negative ramifications.