Shifting geopolitical alignments creating significant disruption for global business says WTW Report

Rhea-AI Summary

WTW launched its Political Risk Index today, revealing significant geopolitical shifts globally. The index rated 61 countries, finding that only 25 lean towards the West, while 18 align with Eastern powers, and another 18 remain neutral. Notably, the Western bloc’s influence has declined sharply, with just six countries classified as strong allies of the West compared to 30 five years ago. The report also highlights increasing risks in countries shifting towards the East, such as a 7% rise in expropriation risks and declines in political rights and economic freedom. These changes suggest a growing challenge for businesses operating globally.

Positive

• Launch of the Political Risk Index, providing valuable insights into geopolitical alignments.
• Increased awareness of shifting political landscapes may enhance WTW's consulting services demand.

Negative

• Declining influence of the West could pose risks for businesses, impacting future investments.
• Countries shifting East may experience increased expropriation risks (up 7%) and reduced economic freedoms.

‘Mapping the New Geopolitical Divides’ – WTW’s Political Risk Index launched today

LONDON, Feb. 01, 2023 (GLOBE NEWSWIRE) -- Shifting geopolitical alignments are dividing the globe into opposing blocs. This is one of the key findings of the latest Political Risk Index, launched today by WTW (NASDAQ:WTW) and Oxford Analytica.

In the latest Index, Oxford Analytica rated the 61 countries and territories listed in the WTW Political Risk Index about their current and historical geopolitical alignment. The findings concluded that, of the major economies in the emerging world:

• 25 lean West, towards the US and/or Europe
• 18 lean East, opposing the Western powers on many key issues; and
• Another 18 are attempting to remain neutral
  

The survey also found that the Western bloc has lost ground in all world regions. Five years ago, 30 of the WTW Political Risk Index countries were in the Western Bloc with 13 of these countries strongly allied to the West. In today’s findings, only 6 countries or territories in the Index rate as strong Western allies (including Jordan, Mexico, Qatar and Taiwan). Meanwhile, 7 are rated as leaning strongly East (including Belarus, China, Mali, Myanmar and Russia).

Sam Wilkin, Director of Political Risk Analytics, WTW, said “The findings suggest that countries such as Turkey, Saudi Arabia, Pakistan, Cameroon, and Uganda are ‘dealigning’ from the West. The West’s declining influence in the emerging world will create yet more risks for globalized business.”

Other key findings demonstrated that:

• In countries that shifted East (from neutrality or a Western alignment) over the past five years, on average, expropriation risks rose by 7%, economic freedom declined by 4%, and political rights fell by 10%.
• In “dealigning” countries, each of these risk indicators also worsened, and the dealignment trend is impacting more countries. These rising risks in part reflect the declining influence of the US and its allies.

The geopolitical alignment ratings in the Index are assigned by independent experts from Oxford Analytica’s global network. Countries and territories are selected for inclusion in the Index based on volumes of foreign investment and levels of political risk.

For more information please access the political risk survey at https://www.wtwco.com/en-gb/Insights/2023/01/political-risk-index-winter-22-23

About WTW

At WTW (NASDAQ: WTW), we provide data-driven, insight-led solutions in the areas of people, risk and capital. Leveraging the global view and local expertise of our colleagues serving 140 countries and markets, we help organizations sharpen their strategy, enhance organizational resilience, motivate their workforce and maximize performance.

Working shoulder to shoulder with our clients, we uncover opportunities for sustainable success—and provide perspective that moves you.

Learn more at wtwco.com.

Media contact

Sarah Booker: +44 7917 722040
Sarah.booker@willistowerswatson.com

FAQ

What does the WTW Political Risk Index indicate about global alignments in 2023?

The WTW Political Risk Index indicates a significant shift, with only 25 of 61 rated countries leaning towards the West, while 18 align with Eastern powers.

How many countries have shifted away from Western alignment in the WTW Political Risk Index?

The index shows that several countries, including Turkey and Saudi Arabia, are 'dealigning' from the West.

What are the implications of the findings from WTW's Political Risk Index for investors?

The findings suggest increased risks for businesses due to declining Western influence and rising political risks in dealigning countries.

What specific risks increased in countries that shifted towards the East according to WTW?

Expropriation risks rose by 7%, and political rights declined by 10% in countries that shifted alignment.