2013 Political Risk Map

Transcription

1 2013 Political Risk Map March 2013 Aon Risk Solutions Global Broking Centre Crisis Management

2 Interactive Map 2013 Political Risk Map History and general overview: Leading the industry for 15 years Aon Risk Solutions Global Broking Centre Crisis Management

3 About the 2013 Aon Political Risk Map Aon partnered with Roubini Global Economics (RGE), an independent, global research firm founded in 2004 by renowned economist Nouriel Roubini, to produce the 2013 Political Risk Map in order to take advantage of RGE s unique methodology, Quantitative Country Analytics (QCA), for systematically analysing political risk around the world. Aon political risk map is unique as it now follows a 3 layered approach in analysing political risk in emerging countries (excluding EU and OECD countries). Country ratings reflect a combination of: analysis by Aon Risk Solutions analysis by Roubini Global Economics the opinions of 20+ Lloyd's syndicates and corporate insurers actively writing political risk insurance. QCA as applied to the map allows clients: to track changes in countries, systematically obtain more meaningful country comparisons and, most importantly an ability to decompose each country s risk to show the various elements that drive that risk. 2

4 The Interactive Political Risk Map 2013 is the 15 th anniversary of the Political Risk Map and to celebrate, we have created a fully interactive web based map, to compliment the annual print version. The Interactive Map facilitates access to historical and current data as well as analytics. 3

5 The Interactive Political Risk Map Historical Data The Interactive Map collates 15 years of political risk map data and generates 90 different maps which can show: country ratings changes over time risk Icons changes to and comparative ratings that apply to each country a map for each year from a risk Icon perspective PDF versions access to each PDF version of the map from 1998 to

6 The Interactive Political Risk Map Current Data Risk Icon rankings every country has all nine risk Icons and these are graded from Low to Very High Country summaries each country has a country summary (from 2010 on) Quarterly updates - a key feature of the Interactive Map is that it will be updated quarterly and instantly at the time a key political event 5

7 The Interactive Political Risk Map Map analytics - in addition to the current and historical map features, clients have the ability to track their portfolios of country risk over time. Map analytics allow clients to analyse a country historically and can compare different countries against each other over time and with respect to different risk Icons. For this Aon has created two analytical tools for: Country & risk Icon analysis Exposure analysis 6

8 The Interactive Political Risk Map - Map Analysis Map Analysis helps clients analyse a country historically and can compare different countries against each other over time and with respect to different risk Icons. 7

9 The Interactive Political Risk Map - Exposure Calculator Exposure Calculator allows client to enter their financial exposures against each country in the portfolio of countries in which they operate. It also demonstrates current and historic risk changes by value. 8

10 Print version 2013 Political Risk Map What is new in 2013? Aon Risk Solutions Global Broking Centre Crisis Management

11 2013 Political Risk Map 10

12 Rating methodology Country colours Risk rating using the three layered approach Six core risk Icons for country ratings Exchange Transfer Sovereign Non-Payment Political Interference Supply Chain Disruption Legal & Regulatory Risk Political Violence Additional risk Icons for interest only new for 2013 Banking Sector Vulnerability Risk to Doing Business Risk to Fiscal Stimulus 11

13 Scope of the map 163 countries and territories rated 12 downgrades (last year there were 21 downgrades) Africa East Asia & Pacific Eastern Europe & Central Asia Latin America & Caribbean Cameroon Moldova Panama Algeria Chad Turkmenistan Paraguay Ethiopia Uzbekistan Madagascar Mali Namibia Middle East & North Africa South Asia 13 upgrades (last year there were 3 upgrades) Africa East Asia & Pacific Eastern Europe & Central Asia Latin America & Caribbean Middle East & North Africa South Asia Swaziland Thailand Armenia Barbados Bahrain Pakistan Azerbaijan Guatemala Oman Belarus UAE Macedonia Montenegro 12

14 Downgrades & Upgrades Summary Downgrades - 12 Upgrades moved from High to Very-High Chad 6 moved from Medium-High to High Algeria Ethiopia Madagascar Mali Turkmenistan Uzbekistan 3 moved from Medium to Medium-High Cameroon Moldova Paraguay 2 moved from Medium-Low to Medium Namibia Panama 2 moved from Very High to High Belarus Pakistan 5 moved from High to Medium High Armenia Azerbaijan Guatemala Swaziland Thailand 3 moved from Medium High to Medium Bahrain Macedonia Montenegro 3 moved from Medium to Medium Low Barbados Oman UAE 13

15 2013 Map Key BANKING SECTOR VULNERABILITY: RISK TO DOING BUSINESS: RISK TO FISCAL STIMULUS: 3 new risk icons 14

16 Peril spectrum Countries with all six core risk Icons East Asia & Pacific Eastern Europe & Central Asia Latin America Middle East & North Africa South Asia North Korea Afghanistan Argentina Algeria* Bangladesh* Myanmar* Belarus Ecuador* Egypt* Pakistan Papua New Guinea* Tajikistan* Honduras* Iran* Nicaragua* Venezuela Iraq Lebanon Libya* Palestine Syria Yemen * New in

17 Peril spectrum Countries with all six core risk Icons Africa Benin* Burkina Faso* Burundi* Cameroon* Central African Republic* Chad* Congo Brazzaville* Congo DRC Cote d'ivoire Eritrea Ethiopia* Guinea Bissau Guinea Conakry Kenya* Liberia* Madagascar* Mauritania* Niger* Sierra Leone* Somalia Swaziland Uganda Zimbabwe * New in

18 Exchange Transfer Exchange Transfer: The risk of being unable to make hard currency payments as a result of the imposition of local currency controls. This risk looks at various economic factors, including measures of capital account restrictions, the country s de-facto exchange rate regime and foreign exchange reserves. What is new in 2013 This risk Icon has been added to 29 countries and territories, including Cameroon, Sri Lanka, and Ukraine. This risk Icon is removed in 13 countries, including Albania, Cambodia, Paraguay, and Zambia. 85 countries have this Icon 17

19 Sovereign Non-Payment Sovereign Non-payment: The risk of failure of a foreign government or government entity to honor its obligations in connection with loans or other financial commitments. This risk looks at measures of both ability and willingness to pay, including fiscal policy, political risk and rule of law. What is new in 2013 This risk Icon has been added to 12 countries and territories including Gambia, Lesotho, Russia, and Senegal. This risk Icon is removed in 7 countries, including Bosnia, Croatia, Trinidad & Tobago, and the United Arab Emirates. 89 countries have this Icon 18

20 Political Interference Political Interference: The risk of host government intervention in the economy or other policy areas that adversely affect overseas business interests; e.g., nationalization and expropriation. This risk is composed of various measures of social, institutional and regulatory risks. What is new in 2013 This risk Icon has been added to 3 countries and territories including Moldova, Honduras, and Guatemala. This risk Icon is removed in 14 countries, including El Salvador, Peru, Thailand, and Zambia. 80 countries have this Icon 19

21 Supply Chain Disruption Supply Chain Disruption: The risk of disruption to the flow of goods and/or services into or out of a country as a result of political, social, economic or environmental instability. From 2013, this includes an assessment of domestic supply chain risk. What is new in 2013 This risk Icon has been added to 47 countries and territories, including Burundi, Algeria, Mali, and Tunisia. This risk Icon is removed in 8 countries, including Brazil, India, Panama, and China. 97 countries have this Icon 20

22 Legal & Regulatory Legal and Regulatory: The risk of financial or reputational loss as a result of difficulties in complying with a host country's laws, regulations or codes. This risk comprises measures of government effectiveness, rule of law, wider property rights and regulatory quality. What is new in 2013 This risk Icon has been added to 2 countries and territories namely Armenia and Mali. This risk Icon is removed in 10 countries, including Brazil, Croatia, Peru, and Saudi Arabia. 94 countries have this Icon 21

23 Political Violence Political Violence: The risk of strikes, riots, civil commotions, sabotage, terrorism, malicious damage, war, civil war, rebellion, revolution, insurrection, a hostile act by a belligerent power, mutiny or a coup d'etat. Political violence is quantified using measures of political stability, peacefulness and specific acts of violence. What is new in 2013 This risk Icon has been added to 21 countries and territories, including Argentina, Philippines, Russia, and Serbia. This risk Icon is removed in 12 countries, including Columbia, Kuwait, Indonesia, and Oman. 90 countries have this Icon 22

24 Risk to Doing Business new 2013 Risks to Doing Business: The regulatory obstacles to setting up and operating business in the country, such as excessive procedures, the time and cost of registering a new business, dealing with building permits, trading across borders and getting bank credit with sound business plans. What is new in 2013 This risk is found in 96 countries, including Argentina, Bolivia, Dominica, Nigeria and Russia 23

25 Banking Sector Vulnerability new 2013 Banking Sector Vulnerability: The risk of a country s domestic banking sector going into crisis or not being able to support economic growth with adequate credit. This risk comprises measures of the capitalization and strength of the banking sector, and macro-financial linkages such as total indebtedness, trade performance and labor market rigidity. What is new in 2013 This risk is found in 106 countries and territories, including China, India, El Salvador and Thailand. 24

26 Risk to Fiscal Stimulus new 2013 Risks to Fiscal Stimulus: The risk of the government not being able to stimulate the economy due to lack of fiscal credibility, declining reserves, high debt burden or government inefficiency. What is new in 2013 This risk is found in 94 countries and territories, including Albania, Morocco, Liberia, Tanzania and Uganda. 25

27 Political Risk Management Contracts: Government action that frustrates a contract, that is, prevents or restricts the performance of a contract, or the buyer s ability to pay, or the supply chain Political Risk Insurance Assets: Government action that deprives a company of all or part of its assets (i.e. interferes with a company s ability to own & manage its investments or stocks) Contracts Exports Bonds Imports Loans Assets Equity & Debt Projects Plant & Equipment Commodities 26

28 Summary 163 countries and territories rated 12 downgrades (less than last year 21) 13 upgrades (where the risk is rated as better than last year - 3) Additional risk Icons new for 2013 Banking Sector Vulnerability Risk to Doing Business Risk to Fiscal Stimulus 27

29 Political Risk Map 2013: Launch Date 19th March

30 Contacts Marketing Ahmed Gawad +44 (0) Media relations Sarah Booker +44.(0) Political Risks Matthew Shires +44 (0) Visit our website: Aon Risk Solutions Global Broking Centre Crisis Management Aon Risk Solutions Specialty Crisis Management 29