Wednesday, March 27, 2013
The number of countries with upgraded political risk ratings has increased, according to Aonâ€™s 2013 Political Risk Map.
After several years of greater downgrades due to the Arab Spring, the political effects of the global financial crisis and persistent strains in South Asia, political risk has eased in 13 countries, Aon says.
Despite the upgrades this year, Aon warns that businesses operating in emerging markets still face significant political risks.
The 2013 map shows that 13 countries were upgraded in 2013 compared to just three in 2012. The 2013 map also shows only 12 countries experiencing downgrades, compared to 21 in 2012.
An upgrade is where the overall country or territory risk is rated lower than the previous year.
After dominating the downgrades in 2012, three Middle Eastern countries (Bahrain, Oman and UAE) were upgraded in 2013, reflecting a stabilization and differentiation of political risk in the MENA region.
Several Central Asian and Caucasus countries â€“ Azerbaijan, Armenia, for example, showed improvement, though admittedly from a low base.
In Western Africa, Cameroon, Chad and Mali all were downgraded, along with adjoining Algeria, reflecting the spillovers from difficult regime changes in North African which destabilized these countries.
The 2013 map measures political risk in 163 countries and territories to assess the risks associated with exchange transfers, sovereign non-payment, political interference, supply chain disruption, legal and regulatory regimes, political violence, ease of doing business, banking sector vulnerability and governmentsâ€™ capability to provide fiscal stimulus.
The map is now online and interactive and can be accessed here.
PC360 has more on this story.