fDi Markets Newswire:

Home / Locations / Control Risks identifies the security threats to FDI

CR

Charles Hecker, global research director at Control Risks, tells Sebastian Shehadi about which global security risks might affect global FDI, especially in the Middle East and regarding US president Donald Trump. 

Q: What global security risks can affect global FDI?

A: The global economy appears to be in a growth cycle. Control Risks doesn’t see any global geopolitical threat to the growth cycle. The most important risks are regional in nature and these regional conflicts don’t have the potential to disrupt global economic growth. Naturally, some of the places we’re focusing on are North Korea and the Middle East, and trade protectionism and populism. It’s not our view that a global trade war is looming. That said, particularly given some recent decisions coming out of Washington, there is room for isolated sector-specific and country-specific trade disputes that will probably stay on the level of skirmish, not trade war. The primary threat to FDI is this increasing atmosphere of protectionism and economic nationalism that is accompanying this wave of populism, particularly as applies to Europe.

Q: What began this wave of populism?

A: We think it originated before, but certainly kicked off with the expansion of globalisation. As interconnected as the world is now, globalisation may have reached the limits of its elasticity [due] to pushback against the side effects of globalisation and pace of technological change. The disruption of those trends has multiplied in velocity year-on-year.

Q: What are the greatest risks in the Middle East?

A: We think some businesses are worried about the wrong things in the Middle East and North Africa. The likelihood of Saudi Arabia and Iran going to war is extremely low, despite people thinking its a concern. Politically, economically, and militarily, Saudi Arabia and Iran are not willing or able to go into direct military conflict. The tension between those regional powers will underpin everything that is happening in the region, for example, a conflict between Lebanese Hezbollah and Israel. [Separately], we think that the ‘Qatar crisis’ is just the situation, an enduring state of affairs because the opposing views here are very deeply held by both sides and that most of players involved in this particular stand-off are quite young, and likely to be in power for quite some time. Control Risks is also watching the transformation of Saudi Arabia. We believe that the reforms are positive and not necessarily something that began a process that Saudi Arabia can’t control. We don’t feel that the changes taking place present a threat to regime stability. The more Saudi Arabia can liberalise internally and continue to engage internationally, the better economic growth will be there.

Q: Do you think President Trump is good for US business?

A: We have been slightly perplexed. There are things that have been happening in the world that you would think would act as an economic suppressant, but they don’t appear to be. But we don’t think politics is irrelevant. Companies are thinking a lot more about political trends. The world feels a bit uncertain about where we’re heading. Old economic and political models are coming under enormous pressure.

This article is sourced from fDi Magazine
fDi Magazine

The fDi Report 2018: Free Download

The fDi Report 2018 promobox

Crossborder investment monitor

fDi Markets - Cross border investment monitor

fDi Markets is the only online database tracking crossborder greenfield investment covering all sectors and countries worldwide. It provides real-time monitoring of investment projects, capital investment and job creation with powerful tools to track and profile companies investing overseas.

Click here to find out more about fDi Markets

Corporate location benchmarking tool

fDi Benchmark is the only online tool to benchmark the competitiveness of countries and cities in over 50 sectors. Its comprehensive location data series covers the main cost and quality competitiveness indicators for over 300 locations around the world.

Click here to find out more about fDi Benchmark

Research report

fDi Intelligence provides customised reports and data research which deliver vital business intelligence to corporations, investment promotion agencies, economic development organisations, consulting firms and research institutions.

Find out more.