# Populism and terrorism converge to compound global risks Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2017-04-10 Category: BUSINESS Category URL: https://financedigest.com/category/business Meta Title: Aon's 2017 Risk Maps: Political Risk & Terrorism Meta Description: Discover the latest insights from Aon's 2017 Risk Maps, revealing a 14% increase in global terrorist attacks and shifting dynamics in political violence. URL: https://financedigest.com/populism-and-terrorism-converge-to-compound-global-riskshtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/earth-globef10m2cr-1736843980237-compressed.jpg) Aon publishes 2017 Risk Maps for Political Risk, Terrorism and Political Violence -  2016 saw a 14 percent increase in the number of terrorist attacks worldwide, up to 4,151 from 3,633 in 2015. Western countries saw a 174 percent increase in terrorist attacks in 2016, up from 35 attacks in 2015 to 96 attacks in 2016. -  Oil and [gas companies](https://www.financedigest.com/russia-sanctions-european-gas-companies-polish-part-of-gas-pipeline.html "Russia sanctions European gas companies, Polish part of gas pipeline") were the target of 41 percent of terrorist attacks on commercial interests in 2016 and the trend has continued in 2017. -  2017 marks the first [year in the last four where as many countries experienced a decline in political risk](https://www.financedigest.com/u-s-dollar-climbs-to-two-year-peak-as-risk-appetite-tumbles-yuan-drops.html "U.S. dollar climbs to two-year peak as risk appetite tumbles; yuan drops") for investors as those experiencing an increase. This suggests a modest improvement in economic resilience after many years of deterioration. -  The potential for divergence between the U.S. and Europe around sanctions regimes could [create uncertainty](https://www.financedigest.com/banning-russian-aluminium-would-create-uncertainty-about-lmes-role-rusal.html "Banning Russian aluminium would create uncertainty about LME’s role -Rusal") for investors in Iran, Russia and even Cuba. LONDON, April 6, 2017 / [PRNewswire](http://www.prnewswire.com/)/ — A 14 percent worldwide increase in terrorist attacks in 2016 and populist nationalism are creating an increasingly volatile operating environment for international business. [Aon’s](http://www.aon.com/default.jsp) (NYSE:AON) 2017 [Risk Maps](http://aon.io/2oyoQvH) covering Political Risk and Terrorism and Political Violence, produced in conjunction with Roubini Global Economics and The Risk Advisory Group, also confirmed that while Western countries saw a marked increase in terrorist incidents, attacks on these countries still account for less than three percent of terrorist violence globally. In 2016, the United States sustained the highest number of terrorist incidents in a decade, although, according to the Report, the threat is likely to remain moderate in 2017. **_Terrorism and Political Violence_** The terrorist threat continues to evolve, affecting an ever-wider [set of sectors](https://www.financedigest.com/telecom-api-market-api-set-to-redefine-telecom-sector-as-telecom-2-0-gets-closer-to-reality.html "Telecom API Market – API Set to Redefine Telecom Sector as Telecom 2.0 Gets Closer to Reality") in more countries with more diversified tactics and intent to kill. Impacts range from loss of life to business interruption and disruption in the [supply chain](https://www.financedigest.com/encouraging-female-talent-and-entrepreneurship-in-the-supply-chain-industry.html "Encouraging female talent and entrepreneurship in the supply chain industry"). Other violent [risks are also evolving at the geopolitical](https://www.financedigest.com/markets-pricing-some-geopolitics-but-risk-premia-can-grow-further-goldman.html "Markets pricing some geopolitics, but risk premia can grow further -Goldman") level, leading to increased defence spending, more authoritarian forms of government and a weakening consensus between states. There are few indications of an overall improvement in violent risks in 2017. These developments have underlined the importance of considering crisis [management perils that go beyond property](https://www.financedigest.com/how-to-get-started-in-the-world-of-property-management.html "How to Get Started in the World of Property Management") damage, particularly in sectors that have been most affected such as oil and gas, transport and retail. **Scott Bolton**, Director, Crisis Management, Aon Risk Solutions commented: “The shifting dynamics around terrorism and political violence, reflected in the global events seen in 2016, are presenting an increasing challenge for companies. Those with both domestic and international footprints have the potential to experience events that could impact their people, operations and assets. If we can understand what might reasonably impact an organisation and its people, then we are better able to apply ‘best fit’, consistent [approaches to manage risk.”](https://www.financedigest.com/demystifying-us-feds-approach-on-systemic-climate-risk-stress-testing.html "Demystifying US Fed’s approach on Systemic Climate Risk Stress Testing") **Henry Wilkinson**, Head of Intelligence & Analysis at Risk Advisory: [“Global politics](https://www.financedigest.com/stocks-tumble-globally-on-raft-of-economic-political-worries.html "Stocks tumble globally on raft of economic, political worries") in 2017 is moving in a more violent and crisis-prone direction. The balance of violent risks is starting to tilt from non-state actors back to states. Islamic State- and Al-Qaeda-linked terrorism remains a critical threat, threatening dozens of countries and key sectors, including [oil and gas](https://www.financedigest.com/switch-from-gas-boosts-oil-demand-but-economic-headwinds-loom-iea.html "Switch from gas boosts oil demand, but economic headwinds loom – IEA"), aviation, tourism, retail and media. But in 2017, businesses must develop strategies to face more business-threatening risks from the geopolitical realm. Authoritarian nationalism is on the [rise and with it the risks](https://www.financedigest.com/world-at-rising-risk-of-recession-as-inflation-hits-consumers.html "World at rising risk of recession as inflation hits consumers") of interstate crises and conflict, coups and rebellion, as well as political risks. **_Political Risk_** Populism and protectionist risks in developed economies could [lead to an increase in political risk in emerging and frontier markets as their resilience](https://www.financedigest.com/private-equity-resilience-leads-to-opportunity.html "Private Equity – Resilience Leads to Opportunity") is challenged. While political risks remain high, particularly in the Middle East and Africa, reform efforts and past economic adjustment have increased resilience. Energy markets will continue to [influence](https://www.financedigest.com/how-to-grow-your-brand-with-influencer-marketing.html "How to grow your brand with influencer marketing") economic risks for many emerging and frontier markets. The [expected stabilization in oil and gas prices](https://www.financedigest.com/portugal-expects-deal-to-disconnect-power-prices-from-gas-prices-very-soon.html "Portugal expects deal to disconnect power prices from gas prices ‘very soon’") will alleviate, but not erase, some economic pressures for producer nations, while amplifying financial vulnerabilities for importers, particularly in Asia. **Sarah Taylor**, Executive Director, Head of Structured Credit and Political Risks, Aon Risk Solutions said: “The changing global landscape, driven by trade protectionism, populist policies and sanctions, is likely to have a significant impact on [emerging and frontier markets](https://www.financedigest.com/allergy-immunotherapy-market-emerging-players-may-yields-new-opportunities-2017-2025.html "Allergy Immunotherapy Market: Emerging Players May Yields New Opportunities 2017-2025").  This makes it more important than ever for global businesses to understand and [mitigate their exposures to political risk.”](https://www.financedigest.com/mitigating-operational-risk-through-centralising-reconciliation.html "MITIGATING OPERATIONAL RISK THROUGH CENTRALISING RECONCILIATION") **Rachel Ziemba**, Managing Director [Emerging Markets](https://www.financedigest.com/surgical-masks-market-emerging-trends-and-will-generate-new-growth-opportunities-status-2030.html "Surgical Masks Market: Emerging Trends and Will Generate New Growth Opportunities Status 2030"), Roubini Global Economics: “In the wake of policy uncertainty in developed economies such as the US and Europe, major trading partners in Asia as well as commodity producers in Sub-Saharan Africa and the Middle East and North Africa seem most exposed. Given the focus on trade, currency and migration renegotiation, we are watching for increases in exchange transfer risk, [supply chain disruption](https://www.financedigest.com/ikea-warns-supply-chain-disruptions-likely-to-last-into-2022.html "IKEA warns supply chain disruptions likely to last into 2022") and government interference in the economy.  Within these regions, we see meaningful differentiation, with the richer countries of the Gulf Cooperation Council outperforming regional peers.” **_Key highlights from the 2017 report_** - [Oil and gas companies](https://www.financedigest.com/hackers-hit-italian-oil-company-enis-computer-networks.html "Hackers hit Italian oil company Eni’s computer networks") were the target of 41 percent of terrorist attacks on commercial interests in 2016 and the trend has continued in 2017. Nigeria and Colombia topped the list of [countries affected by terrorism targeting the energy sector](https://www.financedigest.com/switzerlands-engineering-sector-urges-country-to-start-energy-saving-now.html "Switzerland’s engineering sector urges country to start energy saving now"), with attacks by militants in the Niger Delta during the first half of 2016 causing Nigerian oil production to fall by 36 percent. [Saudi Arabia](https://www.financedigest.com/sommet-education-partners-with-kingdom-of-saudi-arabias-tourism-development-fund.html "Sommet Education partners with Kingdom of Saudi Arabia’s Tourism Development Fund"), Iran, Russia, Venezuela and the U.S are vulnerable to production declines. As the global [oil market](https://www.financedigest.com/iran-deal-a-wild-card-for-oil-market-strained-by-supply-risks-reuters-poll.html "Iran deal a wild card for oil market strained by supply risks – Reuters poll") slowly tightens, these supply shocks may have a more meaningful effect on price. - Businesses are facing growing exposure to political violence risks worldwide. For the second successive year, more country [risk ratings](https://www.financedigest.com/hungary-ramps-up-rate-hikes-as-war-stokes-inflation-risks.html "Hungary ramps up rate hikes as war stokes inflation risks") were increased (19) than decreased (11). The overall terrorism and political violence ratings are the [highest they have been since](https://www.financedigest.com/russian-inflation-accelerates-to-7-61-m-m-in-march-highest-since-1999.html "Russian inflation accelerates to 7.61% m/m in March, highest since 1999") 2013, capturing not only terrorism but also the risk of coups, civil and interstate conflicts and rebellions. There are now 17 countries at highest risk, representing epicentres of instability that emanate international terrorism threats and significantly increase business risk exposures in neighbouring states. Three belts of severe risk run through Africa from the Mediterranean to the Atlantic, through the Levant and through South Asia. - Open trading nations like Chile, Colombia, [Hong Kong](https://www.financedigest.com/evergrande-winding-up-lawsuit-in-hong-kong-adjourned-to-nov-7.html "Evergrande winding-up lawsuit in Hong Kong adjourned to Nov 7"), Malaysia, Singapore and Taiwan are exposed to increased political risk due to dependence on U.S. and other trading partners. Mexico and the Philippines are more vulnerable to declines in remittances if they occur due to trade restrictions. Brazil, India, Indonesia and Nigeria are more resilient due to large [domestic economies](https://www.financedigest.com/irish-domestic-economy-returns-to-growth-in-first-quarter.html "Irish domestic economy returns to growth in first quarter"), which are less reliant on exports. - The Middle East and North Africa has the most dense concentration of high to severe risk countries in the world, with heightened political risk and elevated levels of political violence (for example, in Iraq, Syria, Yemen and Libya) spilling over to neighbours and undermining trade and tourism. Territorial losses for IS in Iraq and Syria will probably lead to a dispersion of the jihadist network, carrying serious threats implications for dozens of countries across the region and beyond, particular in [Europe and Asia](https://www.financedigest.com/us-treasurys-top-international-official-heads-to-europe-asia-for-talks-on-economy.html "US Treasury’s top international official heads to Europe, Asia for talks on economy"). The richer countries of the GCC remain much more resilient to political shocks, but economic vulnerabilities including government arrears to the private sector and [higher cost](https://www.financedigest.com/ds-smith-says-cardboard-box-volumes-strong-flags-higher-costs.html "DS Smith says cardboard box volumes strong; flags higher costs") of capital remain present. --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---