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Nov 18 PRNewswire

The US is Safer Than Ever

But US Businesses Abroad Face a Variety of Threats

Control Risks Group Publishes RiskMap to Forecast
Opportunities and Trouble Spots for 2005

LONDON, Nov. 18 /PRNewswire/ — Control Risks Group, the international
business risk consultancy, today launches RiskMap 2005, its annual study and
forecast of political and security risks across the globe.
Although the headlines in 2005 will continue to be dominated by the
ongoing ‘War on Terror’, the report argues that successful action against
al-
Qaida’s leaders, tightening of anti-terror financing laws and the continuing
restructuring of intelligence and law enforcement agencies have made the
United States safer than at any point since 9/11. The organized matrix of
international terrorism has been shattered and replaced by a new paradigm
that
sees small, decentralized cells of local militants attacking Western
interests
abroad.
While acknowledging the role that this type of terrorism plays in risk
management for business, RiskMap 2005 highlights other risks to business,
which will play as great a part in the success or failure of business as
terrorism. Longstanding political uncertainties such as coup threats,
regional economic instability, or civil unrest are all critical risks that
will affect business operating globally. Only by analysing the local as
well
as global threats will business be best prepared for the coming year.
The risks to a number of critical countries are detailed below.

MIDDLE EAST
Iraq:
* Insecurity in Iraq reached unprecedented levels towards the end of
2004 and looks set to continue.
* The US and Iraqi governments remain determined to hold elections
in
January 2005, regardless of the security situation.
* The severe restrictions on the abilities of companies to carry out
reconstruction work in 2004 will continue throughout 2005.

Iran:
* Iran’s nuclear programme will continue to dominate its
international
relations in 2005.
* Effective UN sanctions remain unlikely, which may force the US or
Israel to take decisive action, possibly involving air strikes
against nuclear sites in Iran.
* However, full-scale military action against the regime is not in
prospect.

Saudi Arabia:
* After more than a year of fierce battles against Islamic
militants,
the government appears to be gaining the upper hand, but further
large-scale terrorist attacks remain possible and small-scale
targeted killings of Westerners are probable.
* The wave of terrorist attacks has brought a broad consensus on the
need for far-reaching changes and Saudi Arabia’s rulers have a
rare
chance to define a positive agenda for the country’s future.
* Political and economic reform could limit the recruitment of
extremists among the burgeoning population of under-employed young
men.

AFRICA
Nigeria:
* Crime and corruption will continue to pose the main risks to
companies operating in the country.
* President Olusegun Obasanjo will continue to face challenges, but
opposition groups will not be able to threaten his position.
* Militant groups and community demands will continue to affect
business in the oil-rich Niger delta.

AMERICAS
Brazil:
* Investors will remain watchful for any sign that President Luiz
Inacio da Silva is moving away from business-friendly policies
towards more leftist, labour-orientated policies.
* Violent crime will remain the key security concern for business
personnel, especially in urban areas.
* Any Colombian guerrilla activity will remain restricted to border
areas in Amazonas state.

Venezuela:
* President Hugo Chavez, emboldened by his 2004 referendum victory,
is
likely to adopt a more confrontational approach, bringing greater
state intervention in the economy.
* Any fall in the oil prices would cause serious problems for the
government.
* The main security concerns are the risk of renewed political
violence and rising crime.

ASIA & PACIFIC
China:
* The government’s main priority is to avoid an economic hard landing
following several years of over-investment.
* The operating environment will continue to improve, with new
measures to deregulate the labour market and roll out legal system
improvements.
* Foreign investors’ enthusiasm for China will be boosted by the
build-up to the 2008 Beijing Olympics and related infrastructure
projects.

India:
* Key crisis points will include three state elections — in Bihar,
Jharkhand and Haryana — and the 2005-06 budget, all due in
February
2005.
* Economic policy will be broadly reformist, offering attractive
opportunities to foreign investors in many sectors.
* Growth in the business process outsourcing (BPO) sector will slow in
a tightening labour market.

Indonesia:
* New President Susilo Bambang Yudhoyono will attempt far-reaching
policy reform, but will face difficulties in parliament.
* The convoluted regulatory system and corrupt judiciary will continue
to act as strong deterrents to investment.
* Following a number of counter-terrorism successes, the Islamic
extremist Jemaah Islamiyah (JI) could seek to adopt cruder tactics,
such as individual assassinations.

EUROPE & FORMER SOVIET UNION
Russia:
* President Vladimir Putin will continue to strengthen his rule and
his advisers will begin to prepare public opinion for the
possibility of a constitutional amendment to allow him to remain
in
power beyond 2008.
* The government will play an increasingly active role in the oil
and
gas industries, and deals reached without consulting the
authorities
will be subject to political risk.

For further information contact:
Nicola Hudson in London on +44 20 7970 2103 or via email
Nicola.Hudson@control-risks.com

RiskMap is available to purchase at a price of 150.00 pounds Sterling.

Notes to Editors
Control Risks Group is an international business risk consultancy. Since
its foundation in 1975, Control Risks has worked in more than 130 countries
for more than 5,300 clients — including 86 of the US Fortune Top100
companies. Control Risks’ mission is to enable its clients to succeed in
complex or hostile environments. RiskMap 2005 is based on extensive
analysis
of 195 countries.

Data Sample
RiskMap 2005 includes Control Risks’ security risk ratings forecasts,
which identify the projected level of business risk in various countries
around the globe. Areas listed below have been classified as EXTREME or
HIGH
risk. The forecasts are followed by an explanation of the security risk
levels identified.

Ratings categories and countries/regions
Countries marked in bold refer to the whole country. Countries not in
bold refer to just the region in brackets.

EXTREME POLITICAL RISK
Russia (Chechnya region), Somalia.

EXTREME SECURITY RISK
Iraq, Somalia, Tajikistan (Afghan border area, Garm, Tavildera regions).

HIGH POLITICAL RISK
Afghanistan, Belarus, Bolivia, Burundi, Cote d’Ivoire, Georgia, Guinea
(Conakry), Haiti, Iraq, Israel (Palestinian Authority (PA) areas), Liberia,
North Korea, Philippines, Serbia and Montenegro (Kosovo region), Somalia
(Somaliland), Tajikistan, Togo, Turkmenistan, Venezuela, Zimbabwe.

HIGH SECURITY RISK
Afghanistan, Algeria, Armenia (Azerbaijani border areas), Azerbaijan
(Armenian border areas, Nagorno-Karabakh), Bangladesh, Burundi, Cameroon
(major cities), Central African Republic (north, north-western regions),
Colombia, Congo DRC, Cote d’Ivoire, Eritrea (Ethiopian, Sudanese borders),
Ethiopia (eastern areas towards Somalia, towards Kenyan border, along
Eritrean
border), Georgia, Guatemala (Guatemala City), Haiti, Jamaica (Kingston and
Spanish Town), India (Kashmir, Assam, Manipur, Tripura and Nagaland),
Indonesia (Aceh, Papua, Central Sulawesi and Maluku), Israel (PA areas),
Kenya
(northern areas towards Somalia and along Ethiopian borders), Kyrgyzstan
(Tajik and Uzbek border areas), Laos (Xaysomboune Special Zone and Xieng
Khouang Province), Liberia (border with Cote d’Ivoire), Macedonia
(north-west
region), Moldova (Transdniestr), Nepal, Nigeria (Niger delta), Pakistan,
Panama (Darien Province on Colombian border), Papua New Guinea (Port
Moresby,
Lae and Mount Hagen), Peru (Upper Huallaga, Apurimac, Ene and Perene
valleys),
Philippines (south-central, west Mindanao), Rwanda (border with Burundi),
Russia (Dagestan, Ingushetia and North Ossetia), Saudi Arabia, Serbia and
Montenegro (Kosovo, southern Serbia), Somalia (Somaliland), Tajikistan,
Uzbekistan (Tajik border areas, Fergana valley), Venezuela (Colombian
borders),Yemen, Zimbabwe.

MEDIUM POLITICAL RISK
Albania, Algeria, Angola, Armenia, Azerbaijan, Bangladesh, Benin, Bosnia
and Herzegovina, Burkina Faso, Burma, Cambodia, Cameroon, Central African
Republic, Chad, China, Comoros, Congo, Congo DRC, Croatia, Cyprus (TRNC),
Djibouti, East Timor, Equatorial Guinea, Eritrea, Ethiopia, Fiji, Gabon,
Gambia, Guinea-Bissau, Indonesia, Kazakhstan, Kenya, Kyrgyzstan, Laos,
Lebanon, Lesotho, Libya, Macedonia, Madagascar, Malawi, Maldives,
Mauritania,
Moldova, Mongolia, Morocco (Western Sahara region), Mozambique, Nepal,
Niger,
Nigeria, Pakistan, Papua New Guinea, Russia, Rwanda, Sao Tome and Principe,
Saudi Arabia, Serbia and Montenegro, Sierra Leone, Solomon Islands, Sri
Lanka,
Sudan, Swaziland, Syria, Tanzania (Zanzibar archipelago), Thailand, Turkey,
Uganda, Ukraine, Uzbekistan, Vanuatu, Yemen, Zambia.

MEDIUM SECURITY RISK
Albania (north-east regions), Algeria (Sahara region), Angola, Armenia,
Azerbaijan, Bahrain, Benin (Nigerian border), Burkina Faso, Cambodia,
Cameroon, Central African Republic, Chad, Comoros, East Timor, Ethiopia,
Fiji,
France (Corsica, Les Landes, Alpes Maritimes region), Greece (Athens,
Thessaloniki), Guinea (Conakry), Guinea-Bissau, Indonesia, Israel, Italy
(Calabria, Sicily, Milan, Rome), Jordan, Kenya, Kuwait, Kyrgyzstan, Lebanon,
Laos, Lesotho, Liberia, Macedonia, Madagascar, Malawi, Mauritania, Moldova,
Mongolia, Mozambique, Niger (borders with Algeria, Libya), Nigeria, Oman,
Papua New Guinea, Philippines, Qatar, Russia, Sierra Leone, Solomon Islands,
Sri Lanka (north, north-eastern regions), Swaziland, Tanzania (Zanzibar
archipelago, Rwanda border areas), Thailand, Togo, Turkey, Turkmenistan,
Uganda (northern areas affected by LRA insurgency), Ukraine, United Arab
Emirates, United Kingdom (Northern Ireland and London), Uzbekistan, Zimbabwe
(central urban areas).

Definition of Security Risk Levels

EXTREME
The severity of security risks to assets or personnel is likely to make
business operations untenable. There is no law and order; conditions may
verge on war or civil war. Companies must strongly consider withdrawal.

HIGH
There is a probability that foreign companies will face security
problems;
special measures are required. Assets and personnel are at constant risk
from
violence or theft by state or non-state actors OR there is a high risk of
collateral damage from terrorism or other violence. State protection is
very
limited.

MEDIUM
There is a reasonable possibility of security problems affecting
companies, but there is no sustained threat directed specifically against
foreign companies. Targeted crime or violence poses some risk to foreign
assets and personnel OR they are at risk from violence by terrorists or
unrest.

LOW
Assets are generally secure and the authorities provide adequate
security.
Companies and personnel face only infrequent exposure to violence from
terrorists or criminals; companies are unlikely to be systematically
targeted
for asset theft.

INSIGNIFICANT
Assets and personnel are not at risk except from isolated incidents or petty
crime. Levels of violent crime are low, the authorities provide effective
security and there is virtually no political violence.

Definition of Political Risk Levels

EXTREME
Conditions are hostile to/untenable for business. There is no investment
security. The following conditions may apply: the economy has collapsed;
law
and order has broken down and state bodies ceased to function; there is a
state of war or civil war; non-state actors cause suspension of operations;
or
the state is actively hostile to foreign business and expropriation of
assets
is likely.

HIGH
Business is possible but conditions are difficult or likely to become so
in the near future. Political institutions effectively do not function, the
regulatory framework is poor and judicial decisions are arbitrary. There is
little security for investments. Business may be exposed to the following
risks: economic and political conditions may become rapidly unstable;
international sanctions are possible; non-state actors actively target
business; or there is a risk of contract repudiation or re-negotiation by
state actors.

MEDIUM
Foreign business is likely to face some disruption from state or
non-state
actors OR long-term investment security cannot be guaranteed. There is a
risk
for business of exposure to some or all of the following: corruption; strong
and hostile lobby groups; absence of adequate legal guarantees; restrictions
on imports or exports; weak political institutions; and capricious policy-
making. In some Medium risk countries there is a latent threat of military
or
other illegal intervention.

LOW
Business can operate with few problems. Political institutions are
stable
but there is some possibility of negative policy change. Legal guarantees
are
strong but business may face some regulatory or judicial insecurity. Non-
state actors may occasionally hamper operations.

INSIGNIFICANT
The environment for business is favourable and likely to remain so.
Government policy is stable and the economy is secure. Business faces no
legal or regulatory disadvantages. There are no significant non-state
threats
to operations.

SOURCE Control Risks Group
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