Heightened supply chain risk in Hong Kong following pro-democracy demonstrations

Will Green is news editor of Supply Management
8 October 2014

The risk of business disruption due to civil unrest has increased in a fifth of countries over the past quarter, according to a report.

Maplecroft’s Civil Unrest Index shows risk has increased most in Hong Kong over the past three months, due to the pro-democracy demonstrations. This was followed by Liberia where there has been mounting unrest as a result of the Ebola virus outbreak.

The ranking of 197 countries, which assesses the likelihood of strikes, protests and ethnic and sectarian conflict impacting business operations, includes 11 states that are considered to be “extreme risk”. These include Syria at number one, followed by the Central African Republic, Pakistan and Sudan.

Both Hong Kong (placed 70th of the 197 countries, where 1 is the highest risk) and Liberia (74) have moved from medium to “high risk”.

A further 69 countries are considered to be high risk, including the Asian manufacturing hubs of Thailand (16), Indonesia (23), Vietnam (24), China (26), Cambodia (32) and the Philippines (35).

Maplecroft said firms operating in and sourcing from these countries “faced severe disruptions”. Factories in Vietnam were forced to suspend production during anti-Chinese protests in May 2014, and anti-government protests in Thailand, culminated in a coup and “shut down much of the country’s commercial centre”, halving projected GDP growth to 2.5 per cent.

Charlotte Ingham, principal analyst at Maplecroft, said: “Tracking the trajectory of countries with rising levels of unrest should be the top priority for business continuity planners and risk managers.

“Civil unrest can create significant risks to operations and supply chains and impact the safety of employees and company property.”

The 10 countries with the most civil unrest:

1.     Syria

2.     Central African Republic

3.     Pakistan

4.     Sudan

5.     South Sudan

6.     Iraq

7.     Yemen

8.     Bangladesh

9.     Libya

10.  Somalia

 

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