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3 Global Risks to Business in 2009

With financial and politically volatility all over the world, what challenges pose the biggest risk to business in 2009? And what regions may be too risky?

By Joan Goodchild, Senior Editor

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So, what we might see in 2009 are a lot of low level security challenges in some countries because of problems created by scarcity

Kidnapping and Piracy

Kidnapping seems to have grown to an out-of-control problem in Mexico. The report indicates this is not just a problem in Latin America anymore. What's changed?
Kidnapping is a very good example of the changes in patterns of crime. We tended to associate kidnapping with Colombia awhile ago. For the last decade or so, it was associated mainly with Latin America. Suddenly it's not so much Latin American as it is a phenomenon elsewhere.

What you are seeing, to some extent, is a globalization of crime. By that, I donâ¬"t mean we have transnational crime syndicates. What I mean is basically criminals across the globe are copying activities and techniques from other places.

What you see in Mexico, and to some extent in Venezuela and Ecuador, is very similar to what you saw in Colombia when Colombia was going through its drug wars. The police were quite weak and there was an easy state to exploit. They have copied the technique. Criminal gangs realized there was a lot of money to be made from kidnapping. They've realized they can exploit weaknesses in systems and protection of personnel and they've gone for it.

So, the challenge for companies is going to be translating the lessons from these countries to places like India and Nigeria in which there is a lot of kidnapping going on now. And itâ¬"s a problem elsewhere as well.

We've also seen the problems with piracy spiral out of control in the waters off of Somalia. Will this become a global issue?
Yes, but with some limitations. I think what is going on in Somalia is a specific situation. Somalia is a failed state which facilitates being able to park a tanker for two months while you negotiate. That is not something you can replicate in other places.

Having said that, what we'll probably see is the technique and idea pick up in other places. Pirates, like kidnappers, are realizing it is a lucrative business. It is only a matter of time before that gets replicated in other places, but probably not on the scale of what is happening in Somalia.

Your report breaks down the risks in regions around the world. Are there any countries now that are considered just too volatile for your clients?
Our mission as a company is not to tell where they should and should not do business. And I donâ¬"t think there is a country, with the exception of Somalia, where business is impossible. We have advised clients on some of the most hostile regions in the world; Afghanistan, Nigeria, Mexico, Colombia. In the end, it is a business decision. In a lot of places, you can do business if you do your homework and understand what you need to do to operate successfully there.