Terror focus ‘ignores other threats to investment’




By Mark Huband, Security Correspondent

Financial Times, 18 November 2004

Intense focus on regions of the world where Muslim extremists are most active has diverted attention away from countries where the political and security risks are a significant threat to investment, a London-based consultancy has reported.

In its annual Risk Map released yesterday, Control Risks Group (CRG), the risk consultancy organisation, says that while Iraq, Chechnya, Somalia and other areas of instability are of great concern, what it calls “longstanding and local risks” in other countries are “the greatest threat to corporate success in key investment destinations”.

The riskiest countries are unlikely to be investment destinations for most companies.

But the report cites Russia, Nigeria, Venezuela and Indonesia as countries where investors face political and security trends that are of growing concern.

Specifically, the report mentions crime and corruption in Nigeria, increased government intervention in Venezuela’s economy, the growing powers of Vladimir Putin, the Russian president, and corruption within Indonesia’s legal system.

“In many areas of the world, the most direct threat to international companies will continue to be posed by political upheaval and predatory regimes, rather than by non-state actors [such as al-Qaeda],” said Jake Stratton, CRG research director.

The report details both successes and failures in the conflict with Muslim extremist groups that have emerged out of the al-Qaeda network.

It assesses the counter-terrorism efforts of the Saudi Arabian government as having given the security services “the upper hand”.

But it predicts further violence, though on a smaller scale than incidents experienced to date, and concludes that attacks on foreigners are probable.

The overthrow of Afghanistan’s Taliban regime, and the financial, intelligence and law enforcement measures taken worldwide to thwart the network in its activities, have “undoubtedly made the world safer”, the report concludes.

But these successes “have come at a cost”, as new terrorist sanctuaries have emerged, specifically in Iraq.

In addition, “western governments are failing to take seriously enough the need to communicate with the Muslim world” as part of a broader diplomatic and political attempt to address the problems underlying radicalisation, the report states.

The threats to business from direct action groups – in particular from animal rights activists – are described in the report as having been met with inadequate measures by companies. Risk Map 2005 by Control Risks Group, www.crg.com


© Copyright The Financial Times Ltd 2008.