Political Risk Rising

The impact of the global credit crunch will shift from an economic problem to a political problem in 2009 and Iceland and Greece serve as early warnings, according to the 16th annual Political Risk Map produced by Aon. In its ranking of the political risk of 209 countries and territories, Aon said the past year has seen a number of High Risk countries (Afghanistan, Congo DRC, Iran, Iraq, North Korea, Somalia and Zimbabwe) continue to deteriorate to the point that the creation of a Very High Risk category was warranted. Overall some 18 countries were downgraded to a higher risk level, reflecting the general rise in the risk level globally. On the other hand, four High Risk countries (Malawi, Moldova, Syria and Turkmenistan) saw an improvement in their status to Medium-High Risk. A total of 13 countries were upgraded to a lower risk level. The map measures the risk of: currency inconvertibility and transfer; strikes, riots and civil commotion; war; terrorism; sovereign non-payment; political interference; supply chain interruption; legal and regulatory risk. Included in this year’s map is a Commodity Crunch Exposure Matrix, which identifies the countries most vulnerable to political instability in 2009 if commodity prices (including oils, metals and minerals) continue to fall, as suggested by some forecasters. Check out I.I.I. facts & stats on terrorism.  

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