Control Risks CEO Blog

Behind the Veil

May 1, 2012 Leave a Comment

When you have worked for Control Risks for a long time, people often assume you know the inside story behind the tales of intrigue that dominate the headlines. Just occasionally you do, but cannot say that you do. When you don’t, people nevertheless think you really do and assume you are just being discreet. Better to be regarded as an international man of mystery, I suppose, than just plain clueless.

As for the Bo Xilai case in China, I genuinely don’t have a clue what is happening. There is lots of speculation in the press about what may be going on but my sense is that those who do understand the whole story are remaining tight lipped. Even if the details of who did what to whom when are thin on the ground, the case offers a fascinating glimpse into the workings of China’s political elite.

The transfer of power to a new generation of politburo members was meant to happen seamlessly with the minimum of fuss. The death of Neil Heywood and the fall of Bo Xilai have drawn unwanted attention to what should have been a deft changing of the guard and brought with it salacious tales of fast cars, shady business deals and sexual intrigue. It will be tough for the senior leadership to regain the reputation for austere probity they desire. [Read more...]

Dire Straits

April 11, 2012 2 Comments

Ras al Khaimah sits at the northern end of the United Arab Emirates, close to the border with Oman. The wealth of Abu Dhabi and the glitz of Dubai seem far away. But this quieter – and more normal – Emirate has one thing its more glamorous cousins down the road do not have: mountains.

The Hajjar Mountains rise spectacularly from the coast and stretch northwards to the northern tip of Oman, overlooking the Straits of Hormuz and Iran. At nearly 3000 metres above sea level, this range of mountains is comprised of a series of high arid plateaus and steep-sided valleys walled in by soaring cliffs. Elsewhere these cliffs would attract the attention of the massed ranks of the rock climbing community but during a day walking in these hills last week, we saw only the occasional shepherd whose ancestors have scratched a living from this beautiful but austere landscape for generations. [Read more...]

C Words

March 29, 2012 1 Comment

India is newspaper heaven. It has the world’s biggest English speaking population so undertaking a media campaign (in this case a series of twelve interviews to mark the Indian launch of Control Risks’ Riskmap) requires deep reserves of stamina. There are so many newspapers, journals and magazines each with an unquenchable thirst to talk about India and its changing place in the world.

Each interview has followed a similar line of questioning: are international investors losing confidence in India as a high growth, dynamic market? Each journalist pressed us on whether India’s reform agenda has stalled through political paralysis and pandering to narrow vested interests.

It is hard to argue with these conclusions. A weak and fractious governing coalition and proposed retrospective changes to the tax regime all give investors cause for concern. But a more profound issue lurks behind the questioning like a ghostly presence in the room: has India now slipped so far behind China that it will never catch up with its BRIC neighbour? [Read more...]

Generation C

March 19, 2012 1 Comment

Shanghai seems very quiet. Restaurants are less crowded, taxis are easier to find and the vast acreage of shiny new high-end shopping malls that have sprung up all over the city have an eerie, tumbleweed feel to them. Could it be that the long awaited slowdown in the Chinese economy is starting to bite?

No. If people are staying home, it is less to do with them feeling the economic pinch and all to do with – how can I put this delicately? – an urgent need to procreate.

We are two months into the Chinese Year of the Dragon and it is regarded as extremely auspicious to have a child born in this particular lunar year. So if you want to give birth before the dragon gives way to the much less auspicious snake, you only have a few short weeks to conceive. No wonder the place seems deserted. [Read more...]

A Tale of Two Cities

March 15, 2012 Leave a Comment

This week is fashion week in Lagos. This is an image of Nigeria that rarely makes the headlines. More often, it is the other side of life in this extraordinary country that catches the eye of news makers: corruption, sectarian violence and poverty. Recently, Boko Haram, the Islamic group behind a series of violent attacks in the north and that operates on the fringes of al-Qaida has been dominating international perceptions of Nigeria.

This perception does reflect the reality of much of life in the country. Nigeria has been a poster child for the curse of oil. It has defined the all too familiar tale of how fragile post-colonial political institutions succumb to the flood of money that washes through the corridors of power as oil is literally sucked from the coastal swamps and dispatched across the Atlantic to gasoline-hungry US consumers. Add in an already complex ethnic and religious matrix and it is not surprising that Nigeria has set the standard for countries where the abundance of natural resources and chronic wealth disparity go hand in hand.

Sitting in the foyer of one of the now numerous five star hotels on Victoria Island in Lagos, the trappings of all this wealth are easy to spot. Well-heeled guests pull up outside the hotel in their brand new Range Rovers and bustle through the swing doors in a swirl of Italian designs and private equity chatter. Secure in this hotel, we are cocooned away from the teeming chaos of the rest of Lagos where the millions that have migrated from the countryside to create one of Africa’s biggest cities are still largely waiting for the trickle-down effect from this extraordinary concentration of wealth and power at the apex of Nigerian society. [Read more...]

A long road to Damascus

February 13, 2012 Leave a Comment

Last week in New York, I took part in a roundtable discussion at the Council on Foreign Relations. Billed as an exploration of the business risks and opportunities emerging from the Arab Spring, my fellow panellist – Jared Cohen from Google Ideas – and I had no difficulty in highlighting a plethora of risks. We were harder pressed to identify clear opportunities.

A year after the fall of Mubarak, the democratic promise of last February has been overshadowed by the rising tensions over Iran’s nuclear programme and the bloodshed in Syria. What seemed to be the long overdue emergence of people power has it seems been replaced by a return to a kind of Cold War rivalry between the great powers over their own strategic interests in the Middle East.

In Egypt, the intoxicating euphoria of 2011 has been replaced by a sober realisation that there will be no easy transition to secular liberal democracy. Many in the West are preoccupied by the rise to prominence of Islamic parties both in Egypt and elsewhere and this nervousness tends to overshadow the immediate concern that at a time of falling inward investment, rising unemployment and inflation there is little experience of competent economic management in most of the countries in political flux. In the past twelve months, Egypt has had four finance ministers. [Read more...]

A Golden Age

January 17, 2012 Leave a Comment

Earlier this week was the Golden Globe awards ceremony, the warm-up to the BAFTA and Oscar ceremonies. World leaders probably don’t have time to watch televised award ceremonies and probably even less time to watch movies. But it is interesting to speculate which of the current crop of new releases might grab their attention.

I am sure British leader David Cameron would like to lose himself in the box set edition of one of last night’s winners, Downton Abbey. The tale of an English aristocratic family whose fortunes change as the certainties of the Edwardian era are upturned by the ravages of World War One and the consequent clamour for social justice. But in this fictionalised world the hard edges of class war are smoothed over by a benign sense of noblesse oblige whereby the lower orders are indulged by the kindly benevolence of their lords and masters. It is all very heart-warming. Unless you are a peasant. Or a pheasant, come to think about it. [Read more...]

A bad week for politics

December 12, 2011 1 Comment

I have been awake since two thirty this morning. This is normally the case for the first couple of days after arriving in the United States from Europe: long hours of insomnia waiting for the day to begin. Despairing of going back to sleep, I turn on the television. The nomination for the Republican candidate for next year’s presidential election is just heating up and the TV channels are full of speculation as to whether Newt Gingrich or Mitt Romney will be the beneficiary of Herman Cain’s exit from the race. Twenty minutes later and I am completely demoralised by the quality of political debate. You want to scream at the television. As an advert for the supposed virtues of democracy – from the nation that was founded on its very principles – this is dreadful.

How can we expect China to give it a go, Russia to take it seriously, Egyptians to embrace it or Syrians to keep dying for it when its greatest exponent has reduced it to a pantomime? It is no better in Europe. The bond markets not the electorate have now decided who will be prime minister in Greece and Italy: two ancient civilizations that were experimenting with forms of semi-representative government when the rest of us were wrestling bears and hiding in caves. [Read more...]

Tales of the unexpected

December 5, 2011 Leave a Comment

What surprises does the world have in store for us in 2012? Judging from the last 12 months we might well be in for another bumpy ride. But we have seen so many remarkable twists and turns that we have now become almost desensitised to both the pace and sheer bizarreness of recent change. The extraordinary has become ordinary.

As I write this, the eurozone fiasco and the pending banking crisis continue to dominate the headlines, even though the public is totally fatigued by a situation that economically they struggle to understand and politically makes them despair. In the US, many people are now too despondent to watch television news. A few weeks before he died, Steve Jobs’ Apple Corporation had greater cash resources than the federal government, simultaneously a tribute to Jobs’ commercial genius and an indictment of a political system falling into disrepute.

Western liberal democracy seems to be a tarnished brand given the economic woes and anaemic political response on both sides of the Atlantic. But ironically in a year when large numbers of people in the West have become almost terminally frustrated by their system of government, huge numbers of people in other parts of the world have risked – and given – their lives to rid themselves of incompetent autocracies. [Read more...]

Finding the sweet spot

November 21, 2011 2 Comments

What can the financial services industry learn from a confectionery manufacturer? The parallels are not obvious. But having spent this morning on the production line of a leading confectionery manufacturer, it strikes me that bankers could do worse than spend some time examining the dynamics of an industry that few of us ever pause to consider.

Nobody needs confectionery. It is not critical to our future well-being. The pleasure it offers is transitory. Financial services, by contrast, should be the oil that lubricates the engine of the global economy enabling trade to globalise and deliver prosperity to billions.

But it is bankers not confectionery makers that have the image problem. Nobody is accusing confectionery companies of bringing the global financial system to the brink of collapse and they have enjoyed over a century of extreme brand loyalty that the marketing departments of beleaguered banks can only dream about. [Read more...]