By Indira Srivastava
Even though the terrorist situation in Iraq has improved, the frequency, scale and human impact of attacks still makes it the most extreme risk country for terrorism, with nearly 4,500 civilians killed in 2009, says a new report.
Together with Afghanistan, Pakistan and Somalia, Iraq tops for the second year the Terrorism Risk Index (TRI) -- developed by Maplecroft, a London-based risk advisory company -- that discloses the countries most at risk from terrorist attacks.
According to the index, countries as divergent as Lebanon, India, Algeria, Colombia and Thailand are among 196 nations prone to “extreme risk”.
Thailand has dropped two places in the ranking of the previous year into the “extreme risk” category. Terrorism incidents in Thailand's restive Muslim south -- such as the October 2009 bomb attacks in Sungai Kolok -- largely account for the country's status in the index, says the London-based risk advisory company, Maplecroft.
TRI is intended for companies to assess terrorism risks to their international assets. The index measures not only the risks of an attack, but also the chances of mass casualties occurring.
To provide a comprehensive picture of worldwide terrorism risk, TRI analyses terrorist incidents every six months for their frequency, intensity and number of victims, as well as the proportion of attacks that were 'mass-casualty' in each nation.
A country's historical experience of terrorism is also factored in along with threats made against it by groups such as al-Qaeda.
According to the index published February 16, the Philippines, Turkey, Russia, Nigeria and Spain all rate as “high risk” countries, while the UK, China, USA and France are considered “medium risk”. Countries rated at “low risk” include Germany, Canada and Australia.
To accompany the TRI, the London-based risk consultants have developed an interactive map recording all terrorist attacks since January 2008.
The Localised Terrorism Intensity Map is updated quarterly and uses the most up-to-date data from the U.S.- based National Counter-Terrorism Unit to plot the coordinates of each terrorist incident.
This approach is intended to enable users to drill down and see terrorism at a local level, as well as the intensity of attacks on a national, regional and global scale.
Eva Molyneux, a political analyst at Maplecroft, says: “Media coverage can often skew public perceptions of terrorism risk in a country by publicising mass-casualty attacks. However, smaller terrorist incidents often go unreported, despite having potential to disrupt business operations and supply chains.”
The analyst adds: “The Terrorism Risk Index and the Localised Terrorism Intensity Map have been developed to bridge this knowledge divide and give organisations the intelligence they need to help manage terrorism risks.”
POLITICAL RISK
Yet another index, the Dynamic Political Risk Index (DPRI) forms part of Maplecroft's Political Risk Atlas 2010 and rates 196 countries across the political risk issues most commonly found on corporate risk registers.
The Political Risk Atlas 2010 identifies growing investment risk in India and regional economies. India, Pakistan, Afghanistan, Bangladesh and Sri Lanka have all fallen in the rankings of a new political risk index released December 17, 2009.
These include: conflict and terrorism, regime stability, the rule of law, corruption, expropriation, and the business and macroeconomic environments. Maplecroft uses the term "dynamic" because these risks can change quickly due to direct government action, business activities or to action by sub-states or politically-motivated groups.
Of the South Asian nations, India saw the biggest fall in the rankings, down nine places from previous year. The country was rated as high risk in the DPRI, but extreme risk in the categories of conflict and political violence, terrorism, and business integrity and corruption.
Afghanistan and Pakistan, both rated at extreme risk, dropped one place in the ranking, while Bangladesh moved down four places and Sri Lanka fell one place. Both are deemed high risk countries.
"In part, India's new ranking in the DPRI reflects the persistent risk of terrorism and conflict across the country, including potential violence from separatist movements,” says Molyneux.
She adds: “India recently formed the separate state of Telangana, to forestall violence in Andhra Pradesh, a move that may provide fresh impetus to separatist groups in Assam and elsewhere. The conflict in Kashmir is still ongoing and India remains vulnerable to al-Qaeda style Islamist terrorism and Maoist terrorism.”
These factors can present significant security challenges for organisations with operations, supply chains and distribution networks in the country, unless they are managed correctly, warns the UK risk consultancy.
Somalia, Democratic Republic of Congo and Iraq are rated most at risk in the Dynamic Political Risk Index, while Zimbabwe, Nigeria and Russia also feature as extreme risk nations. On the other end of the scale, Norway, Luxembourg, Finland, Denmark and New Zealand are rated as the nations least at risk.
The Political Risk Atlas 2010 also includes the Structural Political Risk Index (SPRI), an aggregation of 19 indices assessing the long-term trends and deeply ingrained features of 196 countries. These include human rights, resource security, infrastructure and vulnerability to climate change and natural hazards.
India does score better than its regional neighbours for structural risk, with Afghanistan, Pakistan and Bangladesh all considered extreme risk and Sri Lanka, rated high risk.
“However, India is considered most at risk out of the emerging powers, primarily because of its poor human rights record, high vulnerability to climate change and infectious disease, plus high levels of poverty, water and food insecurity,” says a Maplecroft release.
China is also considered high risk, whilst the SPRI rates both Russia and Brazil as medium risk.
"Structural and dynamic risks are very interlinked in most countries, but not however for the world's fastest growing economies, the BRICs -- Brazil, Russia, India and China, where the long term structural risk forecast is very encouraging. This will create an attractive growth environment for investors so long as they proficiently navigate short term dynamic risks," says Alyson Warhurst, executive chair of Maplecroft and a professor at Warwick Business School.
"Maplecroft's research on structural political risk illustrates the potential of the BRICs as the economic powerhouses of the 21st century, which is also a similar finding of the Growth Environment Scores (GES) of Goldman Sachs,” Jim O'Neill, Chief Economist of Goldman Sachs and founder of the BRICs concept points out.
The Political Risk Atlas 2010 provides interactive maps for all 41 political risk indices, plus sub-national maps charting terrorist, conflict and political violence incidents. Data sources for the atlas include the World Bank, IMF, U.S. Department of State, the United Nations and Maplecroft's own research.
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