The overall level of global risk has fallen for the first time in three years, according to Aon's latest political risk map for 2007. But nationalism has emerged as a major source of political risk.
Coups in Fiji and Thailand are obvious examples of nationalistic events that may impact on multinationals, but actions by oil-producing countries such as Bolivia and Russia are also a source of concern.
Charles Keville, director of Aon Crisis Management, said: “Such events, along with other geopolitical problems in other regions of the world, will likely keep oil prices high for at least the next year.”
Venezuela last week announced its intention to target its power and telecoms industries for nationalisation. Those two sectors were privatised in the early 1990s.
Keville also cited the potential risk to global supply chains from embargoes or bird flu.
He said: “The magnitude and complexity of risk is increasing for companies around the world. Companies need to carry out far more detailed and diverse analysis of the risks they face in foreign territories and these issues need to be constantly monitored, whether they be macro or micro in nature.
“In addition, companies are facing greater scrutiny from both internal and external bodies, including non-governmental organisations. There are severe corporate governance and reputational risks. Companies need to be aware that pressures from their own government or country might just as easily be the root of their problems. It is not always the foreign government or country that creates the risk.”
Aon's political risk map indicates that the risk level in 17 countries has decreased since last year.
