This week Russia was named among the 10 countries with the riskiest political and business environments in the world. Does it deserve to be grouped together with Pakistan and Somalia?
Risk analytics firm Maplecroft, creators of The Political Risk Atlas 2011, which assesses risk areas including conflict, terrorism, the rule of law, and the regulatory and business environment, say yes.
Terrorism is a growing problem, they say:
Russia’s increased risk profile reflects both the heightened activity of militant Islamist separatists in the Northern Caucasus and their ambition to strike targets elsewhere in the country. Russia has suffered a number of devastating terrorist attacks during 2010, including the March 2010 Moscow Metro bombing, which killed 40 people. Such attacks have raised Russia’s risk profile in the Terrorism Risk Index and Conflict and Political Violence Index.
So is Russia’s business environment:
The country’s poor performance is compounded by its ‘extreme risk’ ratings for its business environment, corporate governance and the endemic nature of corruption, which is prevalent throughout all tiers of government.Challenges for companies operating in Russia also stem from an ineffective legal and regulatory system, which includes a lack of judicial independence from the government. This was seen most recently in the politicised case against jailed Yukos oil tycoon Mikhail Khodorkovsky, which most commentators dubbed a show trial.
The worst of 2010:
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