The Safest and Riskiest Countries in Which to do Business

CEOs thinking of sourcing components from Haiti or Venezuela should take extra care, while Saudi Arabia is best avoided for those adverse to cyber attacks.
Protesters in New York

Strike action, corruption inquiries, terrorist attacks, hackings, earthquakes. They’re the kind of things that could trigger that call in the middle in the night that all CEOs dread.

Some countries, however, are more prone to disruptive events than others, giving leaders scope to mitigate risk while managing their supply chains or mulling offshore expansion opportunities.

A new analysis by insurance company FM Global, released this morning, has ranked 130 countries and territories based on 12 risk factors, including political stability, productivity, natural disasters, cybercrime, infrastructure reliability and supply-chain visibility. Data was sourced from the company’s own records alongside information gleaned from organizations such as the International Monetary Fund, World Bank and United Nations.

Switzerland, the analysis concluded, is where it’s most likely to be all smooth sailing, largely thanks to the quality of the country’s infrastructure, political stability, corruption controls and economic productivity. The largely mountainous country also isn’t prone to cyclones, earthquakes or wildfires.

“U.S. East Ranked 10th; u.s. west ranked 18th and u.s. central ranked 9th.”

At the other end of the spectrum is the small Caribbean nation of Haiti, the poorest country in the Americas that was hit in 2010 by a major earthquake and subsequent cholera outbreak.

Ranked second-last was Venezuela, which has spiraled into economic chaos and suffered a horrendous law and order problem since oil prices took a tumble and former leader Hugo Chavez died in 2013. “Venezuela is hampered by exposure to wind and earthquake, perception of extensive corruption, poor infrastructure and ill-perceived local supplier quality,” the report’s authors said.

And how did the U.S. fare? Not as well as Europe, which had countries that filled the top eight slots on the table.

The authors split the U.S. and China into three separate regions because their geographic spread accounts for disparate natural hazards. The first U.S. category contains states most sensitive to wind hazards such as cyclones and tornadoes, including Florida, Louisiana and New York. It ranked 10th. The second and third U.S. categories contained states more exposed to earthquakes, such as California, and “miscellaneous” risks, respectively. These ranked 18th and 9th, respectively.

China’s three regions took out 66th, 68th and 72nd.

A real up-and-comer was Luxembourg, which jumped from the eighth spot in 2013 to take second this year.

“Luxembourg enjoys a strong reputation for its financial sector, its network of service providers, and its responsive, business-friendly regulations,” the authors said.

The country, they added, also is well-placed to benefit should London-based financial institutions seek a new home following Britain’s vote to leave the European Union.

CEOs most worried about cyber crime, meanwhile, should perhaps steer clear of the Middle East, which accounted for the four worst-ranked countries in that category: Saudi Arabia, Bahrain, the UAE and Qatar.

The full list can be viewed here.


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