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Watch out for Putin, say peril mappers

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Businesses operating in Russia are expected to confront increasing hostility in the next year as President Putin tries to force through a renationalisation programme before he steps down, global security experts have predicted.

The warning by the Control Risks Group in its RiskMap for 2007 comes amid the dispute over foreign licences in the Sakhalin oil and gas project and question marks over exploration licences in the Shtokman gasfield.

"We are likely to see increased state intervention in the economy," Adam Strang-feld, the deputy research director, said. "President Putin will redouble his efforts to ensure state control of the strategic sectors. Foreign businesses operating in Russia may be forced to renegotiate contracts or to sell shares in specific projects. They could even come under pressure in terms of alleged breaches of environmental regulations, with the aim of revoking licences."

Elsewhere in the world, companies face threats ranging from cybercrime and corruption to kidnappings and violence, according to Control Risks. The group says that half the countries in the world do not provide a stable environment for business, with the Middle East and many parts of Africa posing significant risks.

Only a handful of countries posed "insignificant threat". These included Greenland, Finland and Liechtenstein.

Of the 198 countries surveyed for the RiskMap, 96, or 49 per cent, had a "medium," "high" or "extreme" political risk, which refers to the likelihood of political actors affecting business operations. The RiskMap also ranked 40 per cent of countries as having a "medium" to "extreme" security risk, where companies could be affected by criminals or corrupt officials.

Despite the July 7 bombings last year, the security risk in London was downgraded from "medium" to "low" for 2007, while the United Kingdom as a whole remains in the low-risk category.

"When we looked at the London bombings, one of the key findings in the aftermath was that businesses actually proved extremely resilient to terrorist attacks, particularly larger businesses with adequate contingency plans in place," Mr Strangfeld said.

He added that Control Risks believes that the terrorist threat facing Britain remains unchanged.

Predictably, the countries labelled as posing "extreme" security risk are Afghanistan, Iraq, Somalia, Burundi, the Democratic Republic of Congo, Ivory Coast, Pakistan and Sri Lanka.

Neil Quilliam, a senior analyst, said there was a real possibility of the United States or Israel carrying out surgical airstrikes against Iran's nuclear facilities. He said that the Middle East continued to pose dangers, mainly because of the insurgency in Iraq and the conflict between Israel and Palestine. He said that there would be problems for the foreseeable future as the insurgents in Iraq were likely to move elsewhere.

© The Times

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