Security risks in sourcing locations pinpointed

29 April 2015

Nine countries including Pakistan, Kenya, Cameroon, Egypt and Turkey are facing an ‘extreme risk’ from cross-border security threats, according to research from Verisk Maplecroft.

The risks arise from their proximity to conflicts and countries that are exporting terrorism, the research says.

Verisk Maplecroft’s Global Risks and Resilience Atlas 2015 (GRRA) has assessed the prevalence of 14 cross-border risks and eight resilience factors in 198 countries. It aims to identify the economies most vulnerable to external threats from global demand shocks, regional insecurity, environmental disasters, resource insecurity and pandemics.

The most volatile factor is regional security with violence from conflicts and terrorist attacks undermining the operating environment for businesses and investor confidence.

The key growth markets and sourcing hubs of Pakistan (ranked second most at risk in the Regional Security Risk Index), Kenya (third), Cameroon (fourth), Egypt (fifth) and Turkey (ninth), are all rated as ‘extreme risk'. Lebanon (first), Niger (sixth), Iran (seventh) and Central African Republic (eighth) complete the highest risk category.

The Middle East and North Africa have more than 40 per cent of the countries categorised as ‘extreme’ or ‘high risk’ in the Regional Security Risk Index, mostly due to ongoing conflicts and terrorism emanating from Iraq, Syria, Libya and most recently Yemen.

East Africa is host to almost 20 per cent of the countries categorised as ‘extreme’ or ‘high risk’, with Kenya the region’s only ‘extreme risk’ country, driven by the risks emanating from Somalia.

More frequent and severe weather events associated with climate change are identified as the most significant long-term risk.

More than 50 per cent of countries are categorised as ‘extreme’ or ‘high risk’ in the GRRA’s Climate Change Exposure Index, with the key Asian economies of Bangladesh (third), Hong Kong (fourth), Japan (sixth), Philippines (seventh), Cambodia (14th), Thailand (15th), Vietnam (20th) and India (24th) among the highest risk.

The economies of Japan and Hong Kong are rated ‘low risk’ and among the best performing in the GRRA’s Global Risks Resilience Index, ranking 184th and 191st respectively.

Verisk Maplecroft identifies Bangladesh (34th), Cambodia (39th), India (66th), the Philippines (74th) and Vietnam (80th) as ‘high risk’ countries where vulnerabilities to a global risk event should be taken into account in business continuity planning.

The Global Risks and Resilience Atlas also assesses countries’ dependence on other countries for food, energy and water, via its Water Import Security Index.

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