Political Risk Moderates

Aon’s 2013 risk map shows an increase in countries where political risk is lower, but problems may be lurking in supply chains.

Global political risk has moderated as emerging economies stabilize in the wake of the Arab Spring and  pressures related to the financial crisis abate, according to Aon Risk Solutions’ latest mapping of such risk.

On Aon’s political risk map for 2013, 13 countries were upgraded to show they pose less political risk, while 12 were downgraded to show they pose a higher risk. While that nearly even split between upgrades and downgrades may not sound encouraging, it represents a big improvement over 2012, when just three countries were upgraded and 21 were downgraded, and 2011, when 11 upgrades were outpaced by 19 downgrades.

More than half (54%) of the executives surveyed said margin erosion was the most costly type of supply chain problem they encountered, while 40% cited sudden changes in demand.

According to the survey, 63% of companies have a supply chain risk management program. But executives were skeptical about those efforts, with only 55% describing risk management for the supply chain as extremely or very effective.

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