News Focus - Aon's new political risk map highlights 23 dangerous countries.

(From Reinsurance)

Investors will not be trading in a safer world in 2006, despite twice as many countries experiencing political-risk upgrades as downgrades in Aon's 2006 Political & Economic Risk Map. The map reveals political interference as the greatest threat to global businesses, followed by legal and regulatory issues and sovereign non-payment.

Of the 23 upgraded countries, many are important in global trading, yet are still dangerous places for businesses to operate in as risks become more complex. For example, the ratings for Indonesia and Sudan have 'improved' from high to just medium-high political risk, but are nevertheless labelled with eight of the map's nine icons representing different political risks.

A number of significant trends for 2006 have been included. The emergence of more left-wing governments in Latin America, including Venezuela and downgraded Bolivia, is causing concern for foreign businesses in the form of higher taxes, revision of contracts and threatened expropriation of assets.

The globalisation of oil, gas and other reserves means that politically unstable countries are now becoming part of the supply chain - for example, hydrocarbons exploration and production is increasing in central Asia. The vulnerability of pipelines - a key supply chain element - has been highlighted by Russia's recent dispute with the Ukraine.

Well-publicised, politically driven land confiscation by President Mugabe in Zimbabwe ...