'End of globalisation' top threat to APAC security: Report

The "end of globalisation" is one of the biggest threats to Asia Pacific's overall economic and political security, while India has a "medium" political risk forecast, says a report.

Specialty risk consultancy Control Risks expects 2017 to be a year of acute uncertainty for corporates and jotted down top five risks for businesses in the Asia Pacific region.

Besides "end of globalisation, at least as Asia Pacific knows it", the other four major risks facing the region include territorial tensions, populism and performance legitimacy, China's regulatory whiplash and the implications of the fragmentation of IS in Iraq and Syria.

The report has assigned a 'medium' political risk to India. The political risk rating evaluates the likelihood of state or non-state political actors negatively affecting business operations in a country.

"The unexpected US election and Brexit referendum results that caught the world by surprise have tipped the balance to make 2017 one of the most difficult years for business' strategic decision making since the end of the Cold War," Control Risks CEO Richard Fenning said.

Regarding the "end of globalisation", the report said "the backlash in Asia Pacific's two biggest markets (Europe and the US) against globalisation is the greatest threat to this region's overall economic and political security over the next decade, never mind the next year".

On territorial issues, the report said tensions in the South China Sea may actually decline, provided China does not seek to flaunt its territorial expansion, but divisions within ASEAN are likely to increase.

"High levels of complexity and uncertainty attached to the key political and security issues for the year mean that boards in Asia Pacific will need to undertake comprehensive reviews of their approaches to risk management," Control Risks CEO in Asia Pacific, Toby Latta said.

The report said while China slowdown and Western protectionism will increasingly 'bite' in Asia, elites in the region will shore up their legitimacy through populism.

"In India, the Modi government will intersperse hard choices with appeals to Hindu nationalism," it said.

Moreover, since China is tightening its regulatory regime, both Chinese and foreign businesses in the country are going to feel "considerable strain" in 2017.

On the implications of the fragmentation of IS in Iraq and Syria for the Asia Pacific, the report said though there is a danger posed by returning of trained Jihadists and a threat posed by re-emergence of base areas in central Sulawesi or Mindanao, Asia's terrorism risk landscape is comparatively more benign.

"... relative to the havoc caused by terrorism in the Middle East and Europe, Asia's terrorism risk landscape has been considerably more benign and will continue to remain comparatively so," it said.