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Global Terrorism Risk World Markets Analysis Guy Dunn World Markets Research Centre.

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Presentation on theme: "Global Terrorism Risk World Markets Analysis Guy Dunn World Markets Research Centre."— Presentation transcript:

1 Global Terrorism Risk World Markets Analysis Guy Dunn World Markets Research Centre

2 Global Terrorism Risk Agenda nDefinition of Terrorism nAnalysis of Major Terrorist Attacks Since 1945 –Location: regional split of attacks? –Targets: how often is business targeted? –Perpetrators: Islamic extremist or domestic? nConclusions: Assessment of Risk Going Forward –Which sectors/countries are at greatest risk? –Findings of Global Terrorism Index nQuestions & Answers

3 Global Terrorism Risk World Markets Research Centre (www.wmrc.com) nGlobal Insight (formerly DRI-WEFA) company nProvider of enhanced country risk intelligence nSame-day Analysis, 5-year forecasts and Country Risk Reports on 196 different countries – focusing on politics, economics, security, operational, tax and legal risks nOur focus is country risk analysis, modelling and forecasting n60 full-time analysts divided into six regional teams – backed up by 120 in-country advisers/stringers n500 separate government, academic and corporate clients located in 45 different countries worldwide

4 Global Terrorism Risk WMRC’s country risks expertise nCountry risks analysis on 196 countries nSovereign risks analysis on 196 countries nGlobal Terrorism Index – 186 countries nCorruption ratings provided to Transparency International on 186 countries nTerrorism risks analysis on 186 countries provided to Aon n13-factor risk ratings provided for World Bank report on 186 countries nBespoke risk analysis work carried out for various clients

5 Global Terrorism Risk WMRC’s Definition of ‘Terrorism’ n ‘Terrorism is the unlawful and premeditated use of violence intended to coerce or intimidate a government or civilian population as a means of advancing a political or ideological cause.’ nTerrorism has 5 main components: –Violence –Premeditation –Ideology –Fear –Group or individual: sovereign states are not considered to be terrorist entities.

6 Global Terrorism Risk Scale of Terrorist Attacks Since 1945

7 Global Terrorism Risk Major Terrorist Attacks Since –1945 (>50 casualties)

8 Global Terrorism Risk Regional Split of Major Terrorist Attacks Since 1945

9 Global Terrorism Risk Perpetrators of Major Terrorist Attacks Since 1945

10 Global Terrorism Risk Total Terrorist Attacks Since 1981

11 Global Terrorism Risk Terrorist Attacks Fatalities

12 Global Terrorism Risk Conclusions: Assessment of the Risk Going Forward nWill the number of terrorist attacks continue to grow? nWhat is the risk of more indiscriminate attacks designed to cause mass casualties? nWho will be the main perpetrators of these attacks? nTo what extent will business be considered a legitimate target? nAre any sectors at particular risk of being targeted? nWhich regions/countries are most at risk?

13 Global Terrorism Risk What is the Global Terrorism Index aiming to do? nTerrorism was always central to our security risk rating nHowever, clients often considered it a peripheral threat: –the impact was usually limited to just the targeted country –whilst tragic, most attacks were effectively small-scale nThis changed after the attacks on 11 September: –business was specifically targeted –the indiscriminate nature of the attacks –the internationalisation of the terrorists’ grievances nThe War on Terror is set to be the key determinant of US foreign policy (and hence global current affairs) for the rest of the decade

14 Global Terrorism Risk What is the Global Terrorism Index aiming to do? nClients feel that terrorism is a very real threat that will get worse before it gets better nClients need accurate, up-to-date and independent analysis of the risks they face from terrorism in all the countries they operate nTo meet these needs we used our country risk modelling skills to produce our Global Terrorism Index.

15 Global Terrorism Risk What is the Global Terrorism Index aiming to do? nOur Index is designed to assess the risk of terrorism in each country, and against that country’s interests abroad, over the next 12 months nIt does this by qualitatively rating five key factors for each country – Motivation, Presence, Scale, Efficacy and Prevention – and then giving each of these a quantitative weighting in order to determine its overall Terrorism Risk

16 Global Terrorism Risk Terrorism Index Criteria - % Breakdown

17 Global Terrorism Risk Global Terrorism Index Africa Region

18 Global Terrorism Risk What are the key findings? The US has the 6 th highest risk of terrorism. Another 11 September-styled terrorist attack is highly likely The UK faces the greatest risk from terrorism of any Western European state, and is ranked 10 th overall Iraq is ranked top, followed by Colombia and Russia

19 Global Terrorism Risk What are the key findings? Afghanistan, Pakistan, Saudi Arabia, Israel and Nepal make up the rest of the top ten North Korea came bottom of the survey despite its membership in the so-called ‘Axis of Evil’ nTourism, energy, financial services and telecoms perceived to be most at risk of terrorism in our Client survey nUS, UK companies perceived to be most at threat in Client survey – followed by Spanish, Australian and French companies

20 Global Terrorism Risk Global Terrorism Index Regional Averages

21 Global Terrorism Risk Which regions/countries are most at risk? nAsia, the Middle East and Eastern Europe are the location for most attacks (97.8% of all 2003 attacks) nThe following countries are most at risk of being targeted in a major terrorist attack: –Afghanistan, Algeria, Colombia, France, India, Indonesia, Iraq, Israel, Italy, Kenya, Kyrgyzstan, Nepal, Pakistan, Peru, Philippines, Russia, Saudi Arabia, Spain, Sri Lanka, Tajikistan, Tanzania, Thailand, Uzbekistan UK, US, Yemen.

22 Global Terrorism Risk Do you think terrorism poses a greater risk to than five years ago?

23 Global Terrorism Risk Will the number of terrorist attacks continue to grow? nThe overall number of attacks has actually decreased quite significantly from its high in the 1980s nThis is mainly down to the demise of ultra-leftist groups in Western Europe, as well as to the resolution of the violence in Lebanon nIn spite of the hyperbole surrounding terrorism in the media, there is no logical reason to assume that the overall number of terrorist attacks will resume the levels reached in the 1980s

24 Global Terrorism Risk What is the risk of more major attacks designed to cause mass casualties? nWhilst the overall number of terrorist attacks is on the decline, the number of major attacks is on the increase nThere have already been more major attacks this decade than in the whole of the 1990s nIndiscriminate attacks causing mass casualties are set to continue over the next few years: in 2002 more than 82% of those injured or killed in terrorist attacks were civilians nFurthermore, there is a very real risk of terrorists resorting to CBRN materials to carry out an attack

25 Global Terrorism Risk Who will be the main perpetrators of these attacks? nAl-Qaida and other associated Islamic extremist groups will remain the main perpetrators of terrorist attacks nThe main characteristics of such groups are: –hostility to Western cultural, military and business hegemony –willingness to cause mass civilian casualties –propensity to carry out simultaneous attacks in different cities/even countries –ability to operate internationally – what links Morocco, the US, Saudi Arabia, Spain, Indonesia and Turkey?

26 Global Terrorism Risk To what extent will business be considered a legitimate target? nBusiness has long been considered a legitimate target by terrorists (for eg, the IRA targeting the City of London, Colombian guerrillas targeting oil pipelines etc) nThe attack on the World Trade Center was effectively an attack against the most recognised symbol of US (or Western) capitalism nAlmost 50% of international terrorist attacks in 2003 targeted business directly

27 Global Terrorism Risk Which sectors are most at risk from terrorism?

28 Global Terrorism Risk Do you factor the risk of terrorism into your decision- making process regarding investment locations?

29 Global Terrorism Risk


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