The security and political risk outlook looks worse than at any point in the past decade
Terrorism, Middle Eastern instability, cyber-risk, a Chinese economy in transition and European financial and political uncertainties mean a potentially more volatile world in 2016
But there are causes for optimism, including the possibility of further successes of multilateral diplomacy following the landmark Iranian nuclear deal and the restoration of US ties with Cuba
Stable growth in most western economies, the possibility of a gradual rise in commodity prices as the decade continues, and indications by governments that they are willing to cooperate on environmental issues, offer a range of opportunities to well-prepared businesses in 2016 and beyond
Control Risks, the global business risk consultancy, today publishes its annual RiskMap report, an authoritative guide to political and business risk and a key reference for policy makers and business leaders seeking to plot global trends over the coming year. RiskMap highlights the most significant underlying trends in global risk and security, and provides a detailed view from the markets that will matter most in 2016.
Control Risks' report suggests 2016 will be a challenging year for businesses, as they are forced to navigate escalating security and political risks.
The cyber threat will grow as more nation states engage in cyber operations and criminal attacks on corporate networks become increasingly damaging.
Uncertainty over China's capacity to adapt to a new era of 6% growth has the potential to send jitters through global markets.
Presidents Obama, Putin and Xi are locked into an impasse, each grappling with his own domestic issues and nullifying the others' influence overseas.
Civil society activism is flourishing, threatening unwary business with serious reputational damage.
Al Qaida regroups in the Yemen and elsewhere, while IS continues to entrench its 'caliphate' in the Levant.
Europe is fractured, dealing with growing nationalism at home and failing to provide co-ordinated responses to challenges such as terrorism, regional security threats and migration.
And perhaps the biggest potential disruption of all, another global financial crisis, could be triggered by any combination of an end to cheap money, a Eurozone crisis, or a Chinese hard landing.
But political and security concerns need not translate into a major business downturn. Control Risks expects that the relative political stability of Western democracies will potentially give their economies a renewed competitive advantage over developing economies (such as China and India), which are confronting slowing growth and the prospect of political unrest.
Introducing RiskMap 2016, Richard Fenning, CEO, Control Risks, commented:
"We live in an age of surprises.
"We have seen very clearly how agile start-ups can subvert entire industries, how firebrand celebrities can single-handedly alter a country's political landscape, how corrupt governments can be jolted into reform by angry protests, how terrorists can use social media and the internet to revolutionise their operations, and how skilled cybercriminals can steal sensitive data from even the most secure corporate databases.
"These risks - and many others - will continue to threaten unprepared businesses. Whether it is the see-sawing balance of economic power between the East and the West, uncertainty about the future of commodities prices, the disconcerting metastasis of IS, the ramifications of China's adjustment to its new economic reality, or an explosion in the frequency and severity of criminal cyber-attacks, successful businesses will need to prepare themselves to face tough challenges on a number of fronts.
"It would be easy to think the world has never been more unsettled, or unpredictable, than now. But businesses and investors would do well to remember that, despite the many risks and challenges that 2016 will present, the world has always been a shifting and unpredictable place. That may be little comfort if your boat is sinking off the Greek coast, if your company is left stranded by an unforeseen technical innovation, or if you have just discovered a 16-year-old hacker at large in your network, but it is important to remember that the world remains full of promise for the well-prepared investor. Risk is a necessary precondition for opportunity, and 2016 will be no exception."
