A new report by FM Global looks at the global supply chain resilience threat landscape and highlights changes which have taken place in the last year. The 2016 FM Global Resilience Index ranks 130 countries and territories according to nine drivers that can affect the vulnerability of a business.
Changes in political risk
Political risk, one of the nine Index drivers, can be a severe constraint on business resilience. A significant and topical component of political risk is terrorism. Already in 2016, there have been deadly acts of terrorism in such countries as Pakistan (ranked 117), Belgium (ranked 17), Côte d'Ivoire (ranked 58), Nigeria (ranked 116) and Turkey (ranked 79). The threat of terrorism is real and unabated.
For the second consecutive year, Ukraine (ranked 125, down from 107) was among those countries with the biggest drop, reflecting the high degree of tension within the country as well as with Russia (ranked 75).
The so-called Brexit debate, over whether the United Kingdom (ranked 20) should leave the European Union (EU), could impact the country's future ranking in the Resilience Index. The report states that a vote for the UK to leave the EU could represent a significant risk to the UK's productivity and growth prospects. Should that result, the Index drivers affected by GDP (i.e., 'GDP per capita' and 'oil intensity') could be adversely swayed.
Top- and bottom-ranked nations
Formerly ranked number two, Switzerland has traded places with Norway, reflecting the latter's drop in oil revenue at a time of falling crude oil prices. Rounding out the top 10 in the Index, in descending order, are Ireland, Germany, Luxembourg, Netherlands, the central United States, Canada, Australia and Denmark.
The lowest-ranked country in 2016 is Venezuela (ranked 130) for the second year in a row, followed in ascending order by the Dominican Republic, Kyrgyz Republic, Nicaragua, Mauritania, Ukraine, Egypt, Algeria, Jamaica and Honduras.
Venezuela's position at the bottom of the Index reflects its exposure to the twin natural hazards of wind and earthquake, perceptions of lack of control of corruption and poor infrastructure, as well as ill-perceived local supplier quality.
France (ranked 19) and the UK (ranked 20) retain their positions from last year, while Germany (ranked 4) rose by two places.
Three regions of the United States
The United States is segmented into three regions to reflect disparate natural hazards exposure:
- United States Region 1, encompassing much of the East Coast, is ranked 11 in the Index.
- United States Region 2, primarily the Western United States, is ranked 21.
- United States Region 3, which includes most of the central part of the country, is ranked 7 in the Index.
About the Index
The FM Global Resilience Index is produced annually for FM Global by analytics and advisory firm Oxford Metrica.www.fmglobal.com