Ogilvy Public Relations Worldwide
Jan 18

The Year of Political Risk

We are quickly approaching the Year of the Dragon, an auspicious year in Asian culture. But what about here and in other places around the world?

The World Economic Forum recently released Global Risks 2012 report, which identifies the issues 469 experts and industry leaders believe will have the greatest impact on society.

At the time the data for the report was compiled, survey respondents believed that world-economic conditions are having a greater impact on society than any other factor. Over the next 10 years, they ranked water supply as the second significant risk.

If we take a step back, these issues and others mentioned in WEF’s report are grounded in political risk. That should be top-of-mind for everyone. Indeed, whether the issue is income disparity, chronic fiscal imbalances, or cyber threats the issue is rooted in political factors. The report does list global governance failure as a Center of Gravity. But far less attention is paid to that macro issue than risks that would be the result of political decisions.

There was a lot of political turmoil in 2011 but the outcome will start to emerge this year. Indeed, the changes in governments in the Middle East will have a profound impact on the cost of energy over the course of the next 11 months. In addition, there are a myriad of policies in the U.S., Europe, Latin America and China that will go into effect this year and will significantly affect the financial sector. And, perhaps just as important, is the lack of progress that won’t be realized in 2012 because of a lack of political decisions on a whole slew of issues, such as land use, that are in dire need of addressing.

It is important to focus on vital issues that ladder up to the macro risks but it will be critically important to keep an eye on the big picture in 2012.

Ogilvy Public Relations Worldwide