New Delhi: A robust economic growth seems to have made little improvement to India's ability to withstand major external shocks, making it the most exposed and least resilient BRIC nation to the global risks. However, poor governance and a relative lack of societal resilience could undermine the ability of countries like India, Russia and China to combat any unexpected events of large magnitude and consequence, the report said. (Agencies)
According to a study conducted by risk analysis firm Maplecroft, India has been ranked as the 19th most exposed and least resilient country worldwide to the global risks.
On a list of 178 countries, Somalia has been named on the top with highest exposure and least resilience, while other BRIC countries, Russia, China and Brazil have been ranked 30th, 58th and 97th, respectively.
Among the ten countries most exposed and least resilient to global risks, Somalia is followed by Congo, South Sudan, Sudan, Afghanistan, Pakistan, Central African Republic, Iraq, Myanmar and Yemen.
The report noted that high corruption, terrorism and political violence are some of the most prevalent risks in India and "threaten human security and business continuity, while diverting valuable government resources and money."
"Continuing poor governance is evidenced by the endemic nature of corruption, especially in India and Russia, where the political process is undermined by an inability to tackle the problem," the report said.
It further said that the political stand-off over a new anti-corruption law between the ruling Indian National Congress and the opposition Bharatiya Janata Party, both of which have been hit by recent corruption scandals, has severely disrupted law-making.
Maplecroft said that the BRIC countries have made little improvement in terms of societal governance and are no better placed to withstand major shocks and risks, despite their strong economic growth.
Their strong economic growth in the last four years has not translated into better societal resilience, which constrains a country's ability to adapt and combat potential shocks from pandemics, conflict, terrorism, economic contagion and impacts of climate change, Maplecroft said in its report titled 'The Global Risks Atlas 2012'.
This is despite the cumulative GDP growth between 2009 and 2012 of 16 per cent for Brazil, 13 per cent for Russia, 28 per cent for India and 32 per cent for China, it said.
"With hopes for a global economic recovery resting with the BRICs, investors and business seeking new high-growth, high-risk markets need to be aware of their limited resilience to global risks," Maplecroft CEO Alyson Warhurst said.
Brazil however is "largely buffered" from the destabilising influences of global risks, than the other BRICs counterparts, owing to its to its strong democratic governance and regime stability.
"Poor governance and a relative lack of societal resilience in India, Russia, and China are identified as significant factors that could undermine their ability to combat the effects of 'black swan' events," the survey said.
"A country's resilience to external and internal shocks is built up over time, so as the BRICs political risk environment improves we might see resilience strengthen, but our results reveal this is yet to happen," Warhurst said.
The survey covered 178 countries and analysed their exposure to macroeconomic risk, security, resource security, climate change and infectious diseases.
It also evaluated governance and societal resilience to measure how prepared nations are to adapt to the impacts of global risks.
"Improvements in basic social infrastructure, such as education, healthcare and sanitation for large sections of society, are vital in combating the impacts of global risks. Without these, and improvements in governance, the BRIC economies may not fully realise their investment potential," Warhurst added.
The study has named New Zealand, Finland, Denmark, Norway and Canada among the safest investment destinations in terms of their exposure and resilience to major risk events.
New Delhi: A robust economic growth seems to have made little improvement to India's ability to withstand major external shocks, making it the most exposed and least resilient BRIC nation to the global risks.
However, poor governance and a relative lack of societal resilience could undermine the ability of countries like India, Russia and China to combat any unexpected events of large magnitude and consequence, the report said.