Countries Posing 'Extreme Risk' are on the Rise, says Control Risks Group; 'RiskMap 2001' Forecasts Business Climate.

Business Editors/Foreign Writers

WASHINGTON--(BUSINESS WIRE)--Nov. 2, 2000

In less than five years, the number of countries posing an "extreme" political and/or security risk has more than doubled, according to a report released today by international business risk consultancy Control Risks Group.

RiskMap 2001, Control Risks' annual survey of the political and security risks that will define the international environment in the year ahead, rates 12 countries as posing extreme security and/or political risks, compared to just five countries in 1997.

The countries or regions include: Afghanistan, Burundi, Chad, Congo (Brazzaville & DRC), Eritrea, Ethiopia, Liberia, Russia (Chechnya), Sierra Leone, Somalia, Sri-Lanka (North and NorthEast) and Sudan.

Key predictions for 2001:

Sub-Saharan Africa

Despite containing most of the world's extreme risk areas, the prospects for sub-Saharan Africa as a whole are relatively promising. Gradual political and economic reform is likely, albeit accompanied by phases of political instability and renewed conflict. Areas of concern include Liberia, the Central African Republic, Chad, Kenya, Zimbabwe, Guinea-Conakry and Equatorial Guinea.

Americas

The situation in the Americas is increasingly stable, with star-performing countries like Argentina, Brazil and Mexico maintaining their commitment to fiscal austerity and attracting the bulk of inward investment into Latin America.

However, Brazil and Mexico will experience serious crime problems and some of the smaller economies, especially in the Andean region, could experience continued political volatility, possibly undermining investor confidence.

Asia and the Pacific

Both perennial hazards and new areas of uncertainty confront foreign investors in Asia and the Pacific in 2001. The main areas of concern will remain Pakistan, Indonesia and the Philippines, with potential for more unrest in the South Pacific countries of Fiji and the Solomon Islands. Basic political stability in the continent's giants, India and China, will not be in question.

Europe and the FSU 

In Europe and the Former Soviet Union, new risks, from cybercrime to direct action campaigns, will come to the fore. Although overt gangsterism is declining in most of Eastern Europe, criminal groups are becoming more sophisticated, engaging in complex economic fraud, cybertheft and money-laundering.

Western Europe will witness further episodes of direct action, while terrorism will remain a spectre in countries such as Spain and Greece.

Middle East and North Africa

The Middle East and North Africa will see continued political stability and moderate growth. Israel's fragmented parliament will result in weak governing coalitions and further clashes are likely in the West Bank and Gaza. The power struggle between reformists and conservatives in Iran will continue to open to foreign investment.

An increasingly nationalist political atmosphere in Turkey may heighten political risk to foreign business.

Founded in 1975, Control Risks has worked in over 130 countries for more than 5,300 clients, including 89 of the U.S. Fortune100. Its mission is to enable clients to succeed in complex or hostile environments.