Four of 2016’s Ten Risk Hot Spots in Middle East, IHS Says
January 25 2016 - 3:30AM
Business Wire
Europe’s Schengen rules are likely to be revised; Climate ripe
for return to piracy in Gulf of Aden
IHS Inc. (NYSE:IHS), the leading global source of critical
information and insight, today announced findings from the annual
top risk environments report.
The report, produced by IHS Country Risk, explores 10 of the
major risk environments of 2016, with their likely impact and key
indicators for change.
“Four of the 10 risk hot spots for 2016 are in the Middle East,”
said Keerti Rajan, head of political risk analysis at IHS Country
Risk. “The new cold war between Saudi Arabia and Iran, the rising
threat from the Islamic State, the potential for more protests in
Egypt and contract risks in Iran are all risks for businesses
operating in the region.”
Short summaries of the major risk environments of 2016
follow.
Iran:
In addition to a sustained risk of the US unilaterally imposing
non-nuclear-related sanctions (for instance, terrorism-related),
divergence among Iran’s political factions on the scope and pace of
FDI presents high risk of contracts becoming politicised and
consequently subject to review and renegotiation.
The Gulf:
The emergence of Islamic State in Saudi Arabia and a revived
terrorist campaign there poses risks of the country being used as a
launching pad to expand the group’s activities and recruitment
elsewhere in the region, especially in Kuwait and Bahrain.
Syria, Iraq:
The proxy conflicts in Iraq, Yemen and Syria are drawing Russia,
Iran, Turkey and Saudi Arabia into more direct and overt
involvement, raising the risk of limited direct confrontations
between these sponsors. With the Saudi air force bombing the
Iranian-backed Houthi movement in Yemen, Iran sending IRGC combat
units into Iraq and Syria to fight against Turkish and Saudi
militia proxies, and Russia bombing Saudi and Turkish Sunni
insurgent proxies in Syria, the proxy war in the Middle East is
significantly expanding.
Egypt:
Egypt’s military-backed government is consolidating its own
power and suppressing political opposition, but ongoing failures to
meet security and economic challenges would heighten the risk of
protests re-emerging. At the same time, Egypt’s jihadist insurgency
poses risks to economic recovery.
Somalia:
The onshore and maritime security environment that has
contributed to a reduction in Somali-based piracy since 2012 is
changing, with indicators of an increasing risk of piracy in 2016.
The pirates that thrived in Somalia between 2005 and 2012 were
reliant on the support of regional political leaders who were
willing to provide safe havens for hijacked ships to be stored
during lengthy ransom negotiations. The two conditions that led
regional politicians to provide that support, namely a lack of
alternative economic opportunities and a threat to their control of
their territory, are currently being recreated in the Galmudug
region of central Somalia.
About 60 percent of commercial shipping travelling through this
historic piracy zone no longer carry privately contracted armed
security personnel (PCASP) on-board due to the costs involved and
perception that piracy is not a significant risk. This means that
Somali pirates, who still have the technical capabilities,
manpower, weaponry and financing networks to organise deep-water
hijacks, may soon regain the secure ship-storage locations required
to resume operations.
Argentina:
Newly elected president Mauricio Macri faces significant
challenges through the first half of 2016, despite expectations of
a swift improvement in the business operating environment.
Europe:
The record-high influx of refugees continues to place the EU
under significant strain, with protests, inter-EU political
disputes and a revision of Schengen likely in 2016. A heightened
risk of terrorist attacks will add to Europe’s challenging outlook.
Disruption to ground, rail, and marine cargo in the EU and its
neighbouring countries as a direct result of the refugee crisis is
likely to continue in 2016, causing delays to cargo and disruption
to supply chains.
Nigeria:
Nigerian president Muhammadu Buhari faces a daunting series of
security and economic challenges in 2016 to match some of the high
expectations of him since assuming office in May 2015. Despite
President Buhari giving his new security chiefs until December 2015
to finish off Boko Haram, the Islamist militant group has continued
to stage regular suicide bombing attacks aimed at causing mass
casualties, and the faction, led by Abubakar Shekau, is likely to
receive increased support from the Islamic State. The collapse in
the oil price means Buhari has greatly reduced resources at his
disposal as he attempts to boost fading GDP growth
Myanmar:
The landslide victory by opposition pro-democracy leader Aung
San Suu Kyi’s National League for Democracy (NLD) in the November
2015 election has placed Myanmar on an unchartered path towards
democratic rule, but political stability depends on Suu Kyi’s
ability to negotiate her party’s co-existence with the military and
the outgoing Union Solidarity and Development Party (USDP).
Russia:
As public grievances about the government’s inability to
maintain public services mount, Russia’s elites will strive to
scapegoat prominent policymakers, leading to changes in key
influencers and contract reviews and corruption investigations in
construction, real estate, and transport among the provinces.
About IHS (www.ihs.com)
IHS (NYSE:IHS) is the leading source of insight, analytics and
expertise in critical areas that shape today’s business landscape.
Businesses and governments in more than 140 countries around the
globe rely on the comprehensive content, expert independent
analysis and flexible delivery methods of IHS to make high-impact
decisions and develop strategies with speed and confidence. IHS has
been in business since 1959 and became a publicly traded company on
the New York Stock Exchange in 2005. Headquartered in Englewood,
Colorado, USA, IHS is committed to sustainable, profitable growth
and employs approximately 8,600 people in 32 countries around the
world.
IHS is a registered trademark of IHS Inc. All other company and
product names may be trademarks of their respective owners. © 2016
IHS Inc. All rights reserved.
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IHS Inc.Amanda Russo, +44 208 276 4727+44 781 460
3420amanda.russo@ihs.comPress Team, +1 303 305
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