Geo-political Risk
In our COVID-19 world, Geo-Political risks pose the greatest threat of disruption to your business and supply chain operations. Explore how popular sourcing and supply chain destinations rank on Geo-Political Risk.
Contemporary corporations are dependent on third parties geographically dispersed across the globe. Enterprises are increasingly aware of the need to monitor their third parties. However, what they often fail to realize is the potentially catastrophic impact of risks specific to the location in which their third party suppliers or global operations reside, and the ongoing monitoring required of these location-based risks to minimize or avoid business and supply chain disruptions. Today it is imperative that corporations continuously monitor both their third-parties’ risk profiles and their location specific risk exposure.
Geo-Political risk is only one of 14 categories of third-party and location-based risks that Supply Wisdom continuously monitors for our subscribers; however, we have created this ranking highlighting Geo-Political risk for two reasons. Firstly, we believe Geo-Political risks may pose the highest level of global business disruption and supply chain risks that are not being adequately monitored by enterprises today. Secondly, we believe it effectively illustrates how much location-based risk can vary from one country to another. Beyond that, companies need to understand that Geo-political risk is not static throughout the year but is instead in a constant state of flux.
The 2020 Geo-Political Risk Map
On this page, we present our Geo-Political risk ranking of the countries (and Puerto Rico) currently monitored by Supply Wisdom® as frequently used global sourcing and supply chain destinations. The Geo-Political risk scores used to compile the ranking in this report represent the risk levels as of the second quarter of 2020. Explore how the 60 countries perform on Geo-Political Risk in the following map.
Key Highlights
AFRICA
Highest Risk: Kenya
Lowest Risk: Ghana
ASIA
Highest Risk: Russia
Lowest Risk: Singapore
EUROPE
Highest Risk: Ukraine
Lowest Risk: Estonia
NORTH AMERICA
Highest Risk: Mexico
Lowest Risk: Canada
SOUTH AMERICA
Highest Risk: Brazil
Lowest Risk: Paraguay
The Supply Wisdom Geo-Political Risk Methodology
In Supply Wisdom’s location framework, there are three parameters that comprise the Geo-Political risk category. They are:
- Political risk
- Social & Security risk
- Natural Disaster risk
Each of these three parameters are comprised of sub-parameters. Each sub-parameter is tracked separately and assigned a risk score based on data collected and ongoing risk events. The sub-parameter scores are rolled up into the parameter scores based on weight rankings assigned by our risk framework. The parameter scores are rolled up in the Geo-Political category score also based on weight rankings assigned by our patented risk model.
The Geo-Political risk scores used to compile this ranking are for the second quarter of 2020. While these scores were captured at a single point in time for this report, Supply Wisdom monitors these risks continuously and updates scores in real time for our subscribers.
The 2020 Geo-Political Risk Ranking
Risk is Not Static
The following visualization shows how the Geo-Political risk ranking for each country fluctuated from Q3 2019 till the end of Q2 2020. Flux in the risk scores indicates volatility, demonstrating the need for continuous location risk monitoring for proactive risk mitigation.
2020: COVID-19 and Cascading Risks
Headlines like “Coronavirus Outbreak,” “Killer Cyclone”, “Catastrophic Bushfires”, and “Deadly Earthquake” are happening with alarming and increasing frequency. Unfortunately what were “once-in-a-century disasters” are taking place with frightening regularity. Extreme weather, infectious diseases, natural disasters and climate action failure are among the most destructive, impactful, and at the same time, most likely to occur global business disruption risks.
The following graph demonstrates how a catastrophic event such as COVID-19 and its cascading effects can impact geo-political risk, leading to potential third-party and supply chain disruptions. You can also continuously track Supply Wisdom’s COVID-19 coverage for evolving risks through our Intelligent Risk Alerts here.
