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International business risks consultancy firm Control Risks said in its annual study on levels of global political and security risks, “Riskmap 2008,” that 57 per cent of the emerging markets are at medium political risk or above, indicating significant threats to foreign investments.
However, India has been named as a “low” political risks market and might benefit from political and security instability in other key emerging markets during the course of the year, it noted.
The emergence of trends like economic nationalism, a retreat to authoritarianism and reform fatigue are prompting concerns that politics would increasingly impinge on investment decisions and investments in countries as wide ranging as Russia, Pakistan, Nigeria and Ecuador, could be at increased risk, Control Risks said.
In contrast, it noted that political manoeuvring in India ahead of early elections in 2008 would have only a superficial impact on the business environment and would not check the overall pace and direction of economic reform.
While expressing concern over the continuing Naxalite actions and tribal violence in mineral-rich eastern states where many foreign companies are seeking opportunities, it said that the country’s strong economic growth would continue.
“Commercial exploitation of these areas is problematic, and MNCs need to fully appreciate the political, security and social complexities involved,” Control Risks’ Country Manager for India Steve Wilford said.
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