THE WORLD’S RISKIEST COUNTRIES
October 14, 2012
This blog was inspired by an article published in “Business Finance”, written by Eric Krell, 3 October 2012
Corporate relocation has been transformed in recent years, giving rise to new threats and certainly new opportunities. Traditional three-year expatriate assignments are not the only options now available and desired by companies needing talent in a quick and effective manner. We are all aware of those countries where travel is prohibited by our federal government; i.e. North Korea, Iran, Cuba, etc. but there are other countries that have made the list of “highest-risk destinations. The International SOS is a global firm that provides local expertise, preventative advice and emergency assistance to clients with employees abroad. The highest-risk countries on their list include: Nigeria, Pakistan, India, Mexico and Russia. (Having been to several countries in the Middle-East, I would definitely say that any country in that region MUST be included as a very risky destination.) The nature of international business risks is changing, as is the male/female ratio of international business travelers. A recent International SOS survey indicates that European-based international travelers reported a higher occurrence of threats related to travel-related infections and road accidents during the past three years. Global business involves more germ-related illnesses and much more aggressive driving relative to conditions in the United States and Canada not to mention threats involving kidnapping and ransom.
The number of female business travelers is rising at a tremendous rate. Women now comprise forty-five (45) percent of the corporate travel market. International SOS reports a twenty (20) percent increase in the number of female travelers calling its centers for medical and travel-security advice from 2011 to 2012.
A 2012 KPMG survey of one thousand one hundred and fifty (1,150) senior leaders in mid-sized companies in the United States, Canada, Brazil and Mexico find that:
- Seventy-five (75) percent of mid-market executives believe global expansion is integral to their company’s growth strategy. That figure is up fifty-three (53) percent in 2009 and thirty-seven (37) percent in 2007 previous KPMG surveys on the topic.
- Eighty (80) percent of U.S. mid- market executives think their global expansion plans have been successful in the last two years.
- Seventy-eight (78) percent of U.S. executives say they plan to increase non-domestic revenues from foreign operations and customers. This is an increase of sixty-six percent from 2009.
The allure of global operations is boosting the frequency of international assignments. Fifty-seven (57) of the one hundred twenty-two (122) mobility managers indicate they expect to increase relocation volumes during the next two years. This fact was reported by Cartus 2012 Trends in Global Relocation. This travel generally involved three categories, as follows:
- Commuter Assignments: Travel between home and destination countries for a specified number of work days per month.
- Extended Business Travel: International travel of o ne to three weeks in duration.
- Rotational Assignments: A series of two or more assignments, which last one to three months.
It is imperative that risk management personnel develop specific strategies relative to travel by their most valuable personnel. The following list is an excellent place to begin:
- Increased awareness
- Plan with key stakeholders
- Expand policies and procedures
- Conduct due diligence
- Communicate, educate and train
- Assess risk prior to every employee trip
- Track traveling employees at all times
- Implement an employee emergency response system
- Implement additional management controls
- Ensure vendors are aligned
I think, for health reasons alone, traveling “solo” can be tremendously risky. One of the huge issues existing in today’s global travel is the inability to communicate. (How many U.S. citizens speak Mandarin or Cantonese?) At any rate, pre-planning is an absolute necessity.
A UNIQUE MOMENT IN HISTORY
October 3, 2012
The following article was written by Mr. Greg Jackson. Greg and I are partners in the consulting business we manage and run.
A UNIQUE MOMENT IN HISTORY
2012 harkens back to the turn of the last century, when the invention of the combustion engine and a series of decisions regarding fuel and specifically oil supply would drive global economic decisions over the planet for the next century. This moment is even more influential in that both the energy and fuel markets are being redefined.
But unlike the last century, both the fuel and energy markets will not be reassembled around a single technology or resource near term. Given America’s dependence on foreign oil, an entire nation’s economic infrastructure cannot be uprooted in a moment without collapse. There will necessarily be a transition from our hydrocarbon dependencies. The technology in the near term will not replace hydrocarbons so much as extend the supply by analyzing existing technologies and making them more efficient and environmentally safe. Therefore the shift from hydrocarbon dependency will be more evolution than revolution.
Energy supply in the future will be designed to meet the specific need of a community, a region, and its available resources. Energy delivery in the future no longer contemplates a shift in the global energy infrastructure, nor does it create a new one. Technologies must enable new energy sources to be supplied without government subsidy, be flexible enough to provide energy in isolated environments, and adaptable enough to connect to existing infrastructure.
The Global Market
The world changed drastically on September 11, 2001. We are forever reminded that we are now living in a global society where each system’s strengths and weakness are capable of impacting all others.
America’s dependence on hydrocarbons continues to be a lightning rod for social and political debate. This is due in large part to the fact the climate change issue has driven the energy discussion. The debate has obscured the fact that the global financial community and American government have already affected trillions of dollars of investment in hydrocarbon limiting technologies. It has been speculated that Saudi Arabia and its political stability are all that keep oil from inflating to prices of $200– $300 a barrel.
A concern first enunciated during 1973 Arab oil embargo, 9/11 found America importing 50% of its oil. More disturbing yet, we were using 25 percent of the world’s oil while accounting for 5 percent of its population. 9/11 refocused attention on energy and security. Ten years later, the three foundations of US energy policy are oil independence, economic competitiveness, and reduction of greenhouse gas emissions. These three initiatives are linked in such a way as to drive virtually every facet of the economy. According to the British Petroleum Statistical Review [2], world oil reserves are considered to be 1,333.1 billion barrels (2.1195×1011 m3). Of this, 754.2 billion barrels (1.1991×1011 m3), or close to 60% of the world’s oil supply, are located in the Middle East. The United States contains about 2.1% of the world’s oil supply; about 28 billion barrels (4.5×109 m3). About 1/3 of U.S oil consumption comes from domestic supplies, and with current trends in production, U.S. oil reserves are expected to be depleted in about 10 years. The world’s two largest developing economies, China and India, are expected to deplete their reserves in about 10 and 21 years, respectively.
At current rates of production, the oil reserves in the Middle East are expected to be depleted in 85 years. Once the reserves in the U.S., China, and India are depleted, these countries will have to rely much more heavily on oil importation, putting more pressure on oil exporting areas of the world, and thus draining reserves in at a faster rate. The BP Statistical Review predicts the depletion of all the world’s proven oil reserves in 45.7 years.
In 2009, the world consumed 84 million barrels (13,400,000 m3) of crude oil per day, which translates to 30.7 billion barrels (4.88×109 m3) a year. This is a vast amount of nonrenewable energy, and numerous alternative fuel options are being explored to replace this fossil fuel. Of all the options for new fuels, biofuels stand out as the most compatible. The other possible alternatives have a number of technological and economical hurdles that prevent them from being as feasible as biofuels.
In 2010, the United States imported about 4.3 billion barrels (680,000,000 m3) of crude oil. Add to this about 2.01 billion barrels (320,000,000 m3) produced in the United States, and the total consumption in the United States is 6.3 billion barrels (1.00×109 m3) of crude for 2010. Imported oil accounted for 2/3 of the oil supply in the US, with about 42% of imported oil coming from OPEC countries.
There is finally a consensus that as long as gasoline prices remain high, the economy will struggle to recover; that should oil prices drop, our dependence upon foreign supply makes the US economy completely vulnerable to any number of attacks; that we have spent a decade investing in our independence, something Americans hold dear, and that oil use in its current form isn’t helping our global environment. The fact that the resource is simply running out is no longer the only focus.
Additionally the cost of fuel is penning business profitability from multiple directions, not only from the additional cost of the fuel itself inherent in their products and services, but also the associated energy cost and now the emerging costs of corporate governance over emission standards.
Implementing cost reductions insofar as fuel management is considered no longer optional for businesses to remain competitive and profitable. With a depleting supply of our fuel resources coupled with the necessity to include the cost of emissions in Corporate cost structure, basic laws of economics apply and the lower cost producer will succeed. Consequently technologies that limit cost by reducing emissions will gain an economic advantage.
The technology is there–we must use it. We must CARPE DIEM!!