Rise in global political violence challenges supply chains

Will Green is news editor of Supply Management
6 May 2014

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7 May 2014 | Will Green

Levels of conflict and political violence have increased in 48 countries over the past six months and created “significant challenges to supply chains”, according to a report.

Maplecroft’s biannual Conflict and Political Violence Index showed Ukraine moved 52 places to become the 35th most at risk country following its uprising and the threat of Russian intervention, while 16 countries are rated as “extreme risk”.

These include the Central African Republic, South Sudan, Somalia, Democratic Republic of Congo and Libya, while Syria remains the country with the highest levels of conflict and political violence.

Many key growth markets feature in the “high” and “extreme” risk categories, including Colombia (11), Nigeria (15), Philippines (17), India (18), Bangladesh (21), Thailand (23), China (25), Indonesia (29) and Turkey (31).

Charlotte Ingham, principal political risk analyst at Maplecroft, said: “Conflict and political violence has widespread consequences for supply chains, potentially jeopardising the security of personnel, disrupting logistics and in the most severe cases, halting production altogether either because workers are unable to access facilities, or due to the destruction of property and wider infrastructure.

“The risk of conflict and political violence means companies potentially face higher costs due to the need to provide increased security for individuals and property, and also increased insurance premiums. The disruption to supply chains is particularly severe if the affected country is one of a limited number of suppliers of a certain commodity or manufactured good.

“Companies with investments in countries experiencing heightened levels of conflict and political violence also face increased reputational risks, particularly if they are perceived to have close ties to a government which is responsible for violence against its citizens.”

Top 10 countries for conflict and political violence:

1.     Syria

2.     Central African Republic

3.     Iraq

4.     South Sudan

5.     Afghanistan

6.     Somalia

7.     Democratic Republic of Congo

8.     Libya

9.     Sudan

10.   Pakistan

 

 

 

 

 

 

 

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