Insurance broker Aon says the political-risk-exposure rating in its 2013 Aon Political Risk Map has improved for 13 countries over the past year, a notable upgrade over last year's report, when only two nations had been upgraded. The number of nations that saw rating downgrades also dropped from 21 in 2012 to 12 this year.
The map measures political risk, political violence and terrorism in 163 countries and territories to help companies assess their risk levels for exchange transfer, legal and regulatory risk, political interference, political violence, sovereign non-payment and supply chain disruption. New for this year, the map measurers banking sector vulnerability, risk to fiscal stimulus and risk of doing business.
The following pages highlight the highs and lows of Aon's ratings and trends.
Europe's Periphery
Medium-High Risk Nations: 3
Medium Risk Nations: 6
Medium-Low Risk Nations: 2
Upgraded: Azerbaijan, Armenia, Belarus, Macedonia and Montenegro
Downgraded: Moldova.
Upgrades for five nations were the result structural reform to attract investment. However, persistent economic strains in Western and Eastern Europe increased economic pressure on several regional governments.
(AP Photo/Ilkin Huseynov)
The Middle East
Very High Risk Nations: 5
Medium-High Risk Nations: 2
Medium-Low Risk Nations: 2
Upgraded: Bahrain, Oman and United Arab Emirates (UAE).
The region dominated downgrades in 2012, but saw a reversal of sorts in 2013 with three upgrades. The upgrades reflect stabilization and economic differentiation in the region, but Aon says this could be a temporary situation because the region remains fragile.
(AP Photo/Hasan Jamali)
Asia
Very-High Risk Nations: 1
High Risk Nations: 7
Medium-High Risk Nations: 7
Medium Risk Nations: 1
Upgraded: Pakistan, Thailand.
Downgraded: Turkmenistan, Uzbekistan.
Overall, the Asia region remains difficult to operate in, but there were two countries that saw modest upgrades. For Pakistan, though, Aon notes that despite the upgrade, political violence and terrorism make the country a difficult environment to operate in.
(AP Photo/Sakchai Lalit)
Africa
Very-High Risk Nations: 8
High Risk Nations: 8
Medium-High Risk Nations: 7
Upgraded: Swaziland.
Downgraded: Algeria, Cameroon, Chad, Ethiopia, Madagascar, Mali and Namibia.
The African continent remains a hotbed of political-risk concern with only two countries—Botswana and South Africa—rated as medium-low risks. Most of the continent is rated high-risk or very-high-risk.
(AP Photo/Sunday Alamba)
South America and Caribbean
Very-High Risk Nations: 2
High Risk Nations: 4
Medium-High Risk Nations: 8
Upgraded: Barbados and Guatemala.
Downgraded: Panama and Paraguay.
Strong economic growth supported improvement in two nations, but the region still faces weakness in property rights, political violence, corruption and weak rule of law.
(AP Photo/Moises Castillo)
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