The Hindu Business Line : India most secure place for business in South Asia

India stands out as the most secure location for business in South Asia, according to an analysis published on Thursday by Control Risks, the international business risk consultancy.

RiskMap 2007, just released by Control Risks, ranks both political and security risk in India as low, whereas concerns over political stability and terrorism in neighbouring countries attract less favourable rankings.

Although the report notes risks posed by mass casualty terrorist attacks by Kashmir-based groups, and the spread of this threat to the high-tech hubs in the south of the country, the `low' security ranking assigned to most parts of the country affirms that it offers business a generally secure platform from which to operate.

Coalition politics will compromise the government's ability to deliver some of the liberalisation measures demanded by investors, yet the general direction of economic policy will remain positive, the report said, adding infrastructure deficiencies in key hubs including Mumbai and Bangalore will remain a key concern for investors.

Mr Jake Stratton, India representative for Control Risks, says, "RiskMap 2007 indicates, geographically, the difficult operating environment for business around the world. However, experience shows that companies can successfully tackle formidable country risk issues. It is a question of being able to identify all the significant risks at an early stage, and to develop country-sensitive risk management strategies to deal with them. Indian multinationals are directing a great deal of attention to these issues as they expand their operations into volatile markets in Latin America, Africa and elsewhere."

On a global level, RiskMap 2007 reveals that 96 of the 198 countries surveyed (49 per cent) were ranked as being medium, high or extreme for political risk. This means that, at best, businesses in these countries are likely to face disruption to their activities and, at worst, the state is actively hostile to foreign business.

On security risks for businesses across the world, RiskMap 2007 said, of the 78 out of the 198 countries surveyed, 40 per cent were ranked as being medium, high or extreme for security risk, implying a reasonable possibility of security problems affecting companies or at worst, business of any sort may be completely untenable.

According to Control Risks, "The United States, Russia and China are all faced with major decisions in the coming year that will have a major impact on business. The US policy in the West Asia will shift, probably signalling an end to its grand West Asia restructuring programme. We will start to see a re-balancing of China's policy of market liberalisation resulting in even greater competitiveness. And Russia will maintain its course of resource nationalism, turning energy into a potent political weapon".

CRITICAL BUSINESS ISSUES

According to Control Risks, "The key issues that could destabilise business in 2007 are more likely to come from actual risks rather than headline threats. Terrorism will continue to dominate the headlines but should be treated as a risk like any other, requiring detailed contingency planning. Energy concerns, always an important issue for business, will prove to be critical. The exponential growth of transactional crime in areas like intellectual property and counterfeiting are now widely recognised as crucial security issues. And the possibility of a worldwide pandemic continues to be a real concern for business across the world".

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