While the world economy is broadly on the road to recovery, the level of political risk has risen in more countries than it has declined, according to Aon’s 18th annual Political Risk Map.
St. Kitts-Nevis is one of several countries downgraded in Aon’s 2011 Political Risk Map, its benchmark annual review of political and economic risks. Aon Risk Solutions, the global risk management business of Aon Corporation (NYSE: AON), measures the political risk of 211 countries and territories based on the level of risks such as currency inconvertibility and exchange transfer; strikes, riots and civil commotion; war; civil war; sovereign non-payment; political interference; supply chain disruption and legal and regulatory risk.
“This downgrade by AON Risk Solutions in my view is a further indictment of the present Labour Administration and their mismanagement of our social and economic affairs,” said MP Hamilton.
“The AON listing takes into account things like sovereign non-payment and political interference and they are of the opinion that based on their information that St. Kitts-Nevis should be placed as a high Political risk area which is a major influencer on international business transactions and investment. This ranking is basically suggesting that businesses looking to invest or do business in St. Kitts-Nevis should be very cautious. This is not good for the development of our federation and as I mentioned before it is a further indictment on this labour government and their mismanagement of our economy,” Hamilton continued.
The listing ranks countries on a six-point scale according to factors including strikes, riots and civil commotion, war, sovereign non-payment, political interference, currency inconvertibility, supply chain disruption, and legal and regulatory risk. A downgrade indicates that the severity of the risk has heightened, while an upgrade indicates that the risk is less severe.
Among countries which downgraded are: Antigua & Barbuda, Bahamas, Barbados, the Cayman Islands, Comoros, Dominica, Grenada, Greenland, Antilles, St Vincent, Trinidad, St. Lucia and Bermuda while the upgraded countries are: Kenya, Mozambique, Rwanda, Uganda, Zambia, Panama, Georgia, Uzbekistan, Indonesia, Malaysia, and India.
The firm’s associate director, Beverley Marsden, has said she expects political risk to continue to be a major influencer for businesses transacting in emerging markets in 2011.