Global Risk Factors in 2006

Oh, to be in New Zealand! Or, for that matter, Iceland, Chile, the Czech Republic or Canada. (No, scratch Canada; it experienced a strike recently among rail workers, which disrupted its supply chain.)

Those countries are among the few places in the world that currently face no significant risk according to Aon Trade Credit, in its “2006 Political and Economic Risk Map.”

These snapshots of all areas of the world examine the potential for shifts in political, economic and social environments that can disrupt business operations for anyone involved in international commerce. That, of course, also means people involved in outsourcing endeavors where the work is being done in multiple geographic areas.

Aon’s analysis examines these risks:

• Economic (such as faced in Panama and the Democratic Republic of Congo).
• Exchange transfer (such as faced in Argentina and Kenya).
• Strike, riot, civil commotion (such as faced in the Ukraine and Libya).
• War (such as faced in the Sudan and China).
• Terrorism (such as faced in the US and Italy).
• Sovereign non-payment (such as faced in Belarus and Thailand).
• Legal & regulatory (such as faced in Egypt and India).
• Political interference (such as faced in Mexico and Bosnia).
• Supply chain vulnerability (such as faced in Venezuela and Israel).

The evaluation also lists “Global Stress Points, events posing the greatest threat to the global economy in 2006.” At the top of the list: oil price shock, which has an “impact” level of 70 on a scale of zero to 100, and a likelihood level of 50. The two global stress points deemed to have the greatest likelihood are “instability in central Asia” and “serious disruption in the Balkans,” both with a level of 65.