belt and road summit - 12th september 2019 · and minds. 8 nuanced understanding of country risks...
TRANSCRIPT
Managing the Geopolitical Risks of the Belt & Road Initiative
Sir Richard ShirreffCo-Founder and Managing Partner, Strategia WorldwideNATO’s Ex-Deputy Supreme Allied Commander Europe
Belt and Road Summit - 12th September 2019
epidemic Civ
il u
nre
st
cyber-attack
SanctionsCountry default
Civ
il w
ar
TerrorismEconomics
REGIONS
demography
natural resources
clim
ate
Military conflict
geopoliticalrisk
business
corruption
con
tro
l
government
planet
stra
tegystakeholders Shared prosperity
TOPOGRAPHY
risk
risk
risk
risk
risk
risk
risk
risk
risk
risk
risk
risk
risk
risk
risk
risk
risk
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Geopolitical Themes
FRAGILE GLOBALLANDSCAPE
TRUST IN INTERNATIONAL ORGANIZATIONSIS CRUMBLING
DECLINE OF WESTERN CENTRIC WORLD
ENVIRONMENTALISSUES
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Climate change - increasingly an existential issue?
Source: Climate change exposure index, Verisk Maplecroft, 2019
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Belt and Road Initiative; a Global Phenomenon
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Risks and Opportunities
RISKS• Hong Kong as super-connector in jeopardy• Perception of BRI as means of establishing
Chinese hegemony• Failure to understand risk in an integrated
manner
OPPORTUNITIES• Potential global game changer of 21st Century• Has already transformed a substantive part of
developing world• Growing influence globally• Clear short-term boost to host-country economies
RISK MANAGEMENT
• Better quality projects mean better risk management
• Need for ‘best in class’ independent risk assurance
SHARED PROSPERITY• Stakeholders need to buy in to projects and feel
they will benefit• Indirect, nuanced approach which takes account of
the developmental needs and aspirations of partner countries and communities
• Soft power, leading from behind, winning hearts and minds
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Nuanced understanding of country risks and needsInvestors may face an array of political, social and environmental risks
Myanmar• Political
violence• Human
rights abuse
China• Trade tension• Economic slowdown
Russia• Sanction and interstate
tension• Resource curse
Malaysia• Forced labour• Deforestation and
water pollution
DRC• Political scandal• Resource nationalism
Mozambique• Government effectiveness• Civil unrest
Italy• Tight lending
conditions• Government
effectiveness
Kazakhstan• Government stability• Judicial Independence
Venezuela• Heavy debt• Political violence
Chile• Labour unrest• Stringent regulations on
water management
Source: Verisk Maplecroft, 2019; Note: Map aggregates seven Verisk Maplecroft risk indices covering geopolitics, terrorism threats, civil unrest, government effectiveness, judicial system, climate change and labour rights.
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Securing Investment
ENVIRONMENTAL, SOCIAL & GOVERNANCE (ESG)
“Companies that fulfil their purpose and responsibilities to stakeholders reap rewards over the long-term, companies that ignore them stumble and fail. This dynamic is becoming increasingly apparent as the public holds companies to more exacting standards and it will continue to accelerate as millennials – who today represent 35 percent of the workforce – express new expectations of the companies they work for, buy from, and invest in…”Larry Fink, CEO Blackrock
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Sir Richard Shirreff,Co-Founder and Managing Partner, Strategia Worldwide
[email protected] www.strategiaworldwide.com