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Aon: Implications of Arab Spring, Political Transitions Raise Concerns for Businesses Globally

Posted on 09 Feb 2012

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While clarity has begun to emerge in some of the countries affected by the Arab Spring, the resulting tension has spurred or intensified protests in dozens of countries, both within the region and elsewhere. According to Aon's 2012 Political Risk Map released today, this remains a concern for businesses operating in those nations.

Aon Risk Solutions, the global risk management business of Aon Corporation, measured political risk in 167 countries and territories to assess the risk level of exchange transfer, sovereign non-payment, political interference, supply chain disruption, legal and regulatory, and political violence.

"These uprisings and protests remain a key concern in 2012 and we see this reflected in rating downgrades of several countries," said Roger Schwartz, senior vice president of political risk for Aon Risk Solutions' Crisis Management Practice. "This is forcing CEOs and CFOs of businesses with overseas operations in emerging markets to revisit risk management and risk mitigation measures."

In addition, the outcome of elections in the U.S., France, Russia and China may contribute to greater global uncertainty. The eurozone debt crisis remains a significant risk, and extends to those countries economically or otherwise dependent on the region.

Aon's map provides an indication of overall levels and types of political risk, which relates to the actions or inactions of foreign governments, including third-party countries which may deprive a business of its assets, prevent or restrict the performance of a contract and affect repayment of loans to financing banks.

Political risk can exist for businesses that invest, operate, trade or lend in emerging markets.