LONDON: January 20, 2016. Control Risks, a consultancy that helps organizations manage risk and recognize opportunities, says business and politics now face increasing “insurgency” - a common challenge that is capable of rapidly upsetting the status quo.
In its 2016 ‘Risk Map’ survey of the year ahead, company CEO Richard Fenning notes that this new insurgent model – “makeshift, audacious and willing to seek out unconventional funding” – applies as much to Libyan militia gangs as it does to Palo Alto start-ups.
“Beware the disrupter who is handed the reins of power” he declares, citing the example of Russian president Vladimir Putin: “Russian foreign policy has been built on a strategy of disruption – a skillful ability to unsettle the West in eastern Ukraine, Crimea and Syria with the aim of restoring Russia’s international prestige.
“Nobody should underestimate the ability of Putin and foreign minister Sergei Lavrov to continue to outmaneuver their opponents in this game of geopolitical chess, or the amount of genuine sentiment that underpins their domestic support” says Fenning, who nevertheless warns that at the current price of oil, Russia’s reliance on a hydrocarbon-based economy cannot be ignored forever.
He claims another disrupter is prime minister of India Narendra Modi who, he says, must live up to his promise to change the way the country is governed: “Having swept to power with his own brand of Gujarati radicalism on a wave of iconoclastic popular support that shattered the Congress-dominated consensus, he now faces the same popular intolerance of inaction that he exploited so cleverly in opposition,” observes Fenning.
But behind the ego and ideology, the latest Control Risks report suggests the biggest potential disrupter this year is another financial crisis triggered by any combination of the end of cheap money, the migration (or another) EU crisis, or a Chinese hard landing. “The prospect of a repeat variation of 2008 may only be lurking in the shadows, [but] the prospect of presidents Barack Obama, Xi Jinping and Putin coming together to avert financial peril seems sadly remote,” the company adds.
Despite the dire possibilities Fenning concludes: “Each year we are at pains to emphasize that, for all the apparent insecurity that surrounds us (Yemen/WFP above), the world remains full of promise for the well-prepared investor. Risk is a necessary precondition for opportunity, and 2016 will be no exception.”