Political and economic stability

Geopolitical risk and stability are top concerns among companies doing business globally. Countries with weak political, economic, or financial stability perspectives have a higher risk of government officials making decisions that negatively impact businesses, such as random impositions of price controls or sudden nationalization of industries. If the government is facing a potential economic collapse of a banking system, of a currency, or an IMF bailout, the ramifications can be extensive for corporations operating in the market, as well as the overall supply chain stability.

BSI has encountered many examples, such as Bangladesh and Cambodia, where political elections or massive strikes completely shut down government operations. As a result, global companies that have critical suppliers in those countries are threatened with the continuity of their businesses. However, these risks are highly predictable. Knowing the likelihood of such scenarios allows companies to mitigate the instability risks by creating redundancy and resilience within their supply chain.