Political risk impact of credit crunch will come to light in 2009

The impact of the political consequences of the global credit crunch will be seen in 2009, according to the 16th annual Political Risk Map, launched by Aon Risk Services.
Miles Johnstone, director of Aon’s Political Risk team, explained: “This year’s map reflects how the impact of the credit crunch is shifting from being an economic problem to a political problem,” Miles Johnstone, director of Aon’s political risk team, said in a release. “When an economy is in downturn, the government has less resource available to deal with issues when they arise, potentially leading to political instability.
“We are seeing this particularly in several Eastern European countries, as well as Iceland and Greece, where there is a rise in exchange transfer and sovereign non-payment risk as well as an increase in widespread protests and street disturbances.”
Over the last year, a number of “high risk” countries have deteriorated to the point where a new “very high risk category” was created.
“The level of risk in these countries just continued to get worse,” Johnstone noted. “It has reached the point where although we have been able to secure insurance cover for some clients in some of these territories, it is not always available.”
It is an uncertain future for many companies and many sectors, Johnstone points out.
How these issues play out is still unclear, he adds.
“We have seen a significant increase in enquiries over the past year from companies seeking political risk cover,” Johnstone notes. “It remains to be seen how and to what extent demand for cover is affected by the ongoing impact of the credit crunch on global trade and investment.”
To register for a copy of the 2009 map, log on to http://www.aon.com/2009politicalmap.