SA rated 'low' for political risk
8 November 2006
The political risks of doing business in South Africa are low, international Business risk consultancy Control Risks says in its latest annual survey of 198 countries worldwide.
However, the London-based group rates SA's security risk for businesses as "medium" overall - and in the country's poorer urban areas as "high".
South Africa's rating is relatively positive in light of the overall finding of the group's RiskMap 2007 report - that almost half of the countries in the world fail to provide a stable environment for business.
According to the report, SA's low political risk rating place it on a par with such countries as Canada, France, Germany, India, Ireland, Italy, Japan, the Netherlands, Spain, Switzerland, the UK and the US.
Low political risk means that businesses can operate "with few problems. Political institutions are stable but there is some possibility of negative policy change. Legal guarantees are strong but business may face some regulatory or judicial insecurity. Non-state actors may occasionally hamper operations."
However, SA's medium security risk rating - with some areas in the country rated as a high security risk - puts the country in the same category as countries like Bolivia and Russia.
Accoring to the report, this means there is a "reasonable possibility of security problems affecting companies, but there is no sustained threat directed specifically against foreign companies."
Forty-nine percent of the countries surveyed in RiskMap 2007 were ranked as being medium, high or extreme for political risk, while 40% were ranked as being medium, high or extreme for security risk.
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. US policy in the Middle East will shift, probably signalling an end to its grand Middle East restructuring programme.
"We will start to see a rebalancing 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."
The report "indicates geographically the difficult operating environment for business around the world," Control Risks research director Jennifer Harbison said in a statement. "However, by being aware of global trends as well as local issues, business can continue to operate successfully in most jurisdictions."
SouthAfrica.info reporter
|
