Investment in Pakistan risky
* Report lists Pakistan among states where long-term investment security cant be guaranteed
Staff Report
ISLAMABAD: Investments in states including Pakistan, Russia, Nigeria and Ecuador may be facing increased risk during 2008, according to a report, RiskMap-2008, issued this week by UK-based organisation Control Risks.
Control Risks is an independent, specialist risk consultancy with 18 offices in five continents.
In its report, Control Risks rates 57 percent of emerging markets at medium political risk or above, indicating significant threats to foreign investment.
It has identified a trend in these countries towards economic nationalism the promotion of national interests in economic policy. The vast majority of countries worldwide are classified as emerging markets where, increasingly, national political agendas will impact the operational effectiveness of foreign investors, the report said.
It said that in many cases trends towards economic nationalism, a retreat to dictatorship and reform fatigue are prompting concerns that politics will increasingly interrupt on investment decisions. Investments in countries as wide ranging as Russia, Pakistan, Nigeria and Ecuador, could be at increased risk during the year 2008, it said.
Disruption: A further category of medium political risk countries where foreign business is likely to face some disruption or long-term investment security cannot be guaranteed lists Pakistan, Chad, China, Sierra Leone and Sudan. Political risk is back and should be worrying investors. The vast majority of countries worldwide are classified as emerging markets where, increasingly, national political agendas will impact the operational effectiveness of foreign investors, commented Adam Strangfeld, research director at Control Risks.
Given their importance in relation to natural resources and manufacturing, the fact that 60 percent of emerging markets are rated, in whole or in part, at medium, high or extreme security risk should also be of concern to investors, according to the report.
Additionally, within the global risk environment there is also a growing gap between transnational risks including terrorism, armed conflict, the impacts of climate change and pandemics and the measures in place to counter them. These risks have the potential to cause a large number of human casualties and severe shock to economies, but attempts at mitigation are undecided.
The report says that Asia is gearing up for another election cycle of great significance, including critical ballots in Thailand and Pakistan, with investor concerns over political and security risks on the rise.
The report said severity of security risks to assets or personnel is likely to make business operations untenable. There is no law and order; conditions may verge on war or civil war. Foreign companies must strongly consider withdrawal during extreme security risks situation. Countries with areas at extreme security risk (indicates entire country rated at extreme) are Afghanistan, Burundi, Congo (DRC), Iraq, Pakistan, Somalia, Sri Lanka and Sudan.
The RiskMap showed the geographical range and sophistication of risk analysis. It forecast how the world for business will look in 2008, assessing emerging risks and key trends, including terrorism, social tensions, urban unrest and climate change.The report also forecasts political and security developments in the year ahead for more than 150 countries. There are risks rating forecasts for every country.
Daily Times - Leading News Resource of Pakistan
* Report lists Pakistan among states where long-term investment security cant be guaranteed
Staff Report
ISLAMABAD: Investments in states including Pakistan, Russia, Nigeria and Ecuador may be facing increased risk during 2008, according to a report, RiskMap-2008, issued this week by UK-based organisation Control Risks.
Control Risks is an independent, specialist risk consultancy with 18 offices in five continents.
In its report, Control Risks rates 57 percent of emerging markets at medium political risk or above, indicating significant threats to foreign investment.
It has identified a trend in these countries towards economic nationalism the promotion of national interests in economic policy. The vast majority of countries worldwide are classified as emerging markets where, increasingly, national political agendas will impact the operational effectiveness of foreign investors, the report said.
It said that in many cases trends towards economic nationalism, a retreat to dictatorship and reform fatigue are prompting concerns that politics will increasingly interrupt on investment decisions. Investments in countries as wide ranging as Russia, Pakistan, Nigeria and Ecuador, could be at increased risk during the year 2008, it said.
Disruption: A further category of medium political risk countries where foreign business is likely to face some disruption or long-term investment security cannot be guaranteed lists Pakistan, Chad, China, Sierra Leone and Sudan. Political risk is back and should be worrying investors. The vast majority of countries worldwide are classified as emerging markets where, increasingly, national political agendas will impact the operational effectiveness of foreign investors, commented Adam Strangfeld, research director at Control Risks.
Given their importance in relation to natural resources and manufacturing, the fact that 60 percent of emerging markets are rated, in whole or in part, at medium, high or extreme security risk should also be of concern to investors, according to the report.
Additionally, within the global risk environment there is also a growing gap between transnational risks including terrorism, armed conflict, the impacts of climate change and pandemics and the measures in place to counter them. These risks have the potential to cause a large number of human casualties and severe shock to economies, but attempts at mitigation are undecided.
The report says that Asia is gearing up for another election cycle of great significance, including critical ballots in Thailand and Pakistan, with investor concerns over political and security risks on the rise.
The report said severity of security risks to assets or personnel is likely to make business operations untenable. There is no law and order; conditions may verge on war or civil war. Foreign companies must strongly consider withdrawal during extreme security risks situation. Countries with areas at extreme security risk (indicates entire country rated at extreme) are Afghanistan, Burundi, Congo (DRC), Iraq, Pakistan, Somalia, Sri Lanka and Sudan.
The RiskMap showed the geographical range and sophistication of risk analysis. It forecast how the world for business will look in 2008, assessing emerging risks and key trends, including terrorism, social tensions, urban unrest and climate change.The report also forecasts political and security developments in the year ahead for more than 150 countries. There are risks rating forecasts for every country.
Daily Times - Leading News Resource of Pakistan
