Global News Journal
Beyond the World news headlines
Perilous predictions for 2011
It’s the season to be merry – and to make forecasts about next year. Across the finance industry fine minds spend December crafting outlooks and extrapolations about how the world will fare, in the hope of a decent return over the next 12 months and avoiding the bear traps that will swallow an investment. The banks, strategic advisories and political risk consultants trumpet their analytical prowess, of course, but are also meeting a natural human need to peer into the future. We all want guidance to take the sting out of living in an uncertain world.
Nowhere is prediction more fraught with peril than in politics and world affairs. The success rate is in inverse proportion to the costs that unexpected acts in the real world can impose on the investor. So despite the difficulty of providing a reliable guide to the future there are huge incentives to try to chart the way ahead. Here’s Control Risks, a risk consultancy firm, on its view of 2011, while competitor Eurasia reveals in early January, as does the World Economic Forum. Nomura has a list of 10 political challenges to prosperity that range from the prospect of gridlock in US domestic politics to brinksmanship on the Korean peninsula.
So which voices warning of political perils should one heed? There’s a crowded field of commentators, perhaps because political outcomes are not as reducible to numbers as economic indicators, where the industry of forecasting has statistical validity. If you work for a well-known investment bank or strategic studies institute your thoughts carry institutional gravitas. However, and this is somewhat a statement of the obvious, only a track record of smart forecasting earns you an audience. That, and saying something worthwhile. Worse than getting a prediction wrong is being so blandly vacuous and broad in scope that your forecasts are both right and uninformative.
Respected voices suggest that beyond pointing to areas of dispute and potential tension, political forecasters are attempting the impossible. “The science of prediction is a contradiction in terms,” says Nigel Inkster, a former British intelligence officer who analyses international political risk at the International Institute for Strategic Studies in London. “There are so many potential variables that could come together in so many potential configurations that it is really difficult to identify anything about which you can be really confident,” says Inkster.
from Andrew Marshall:
Risks to watch in Asia: Country guides
For Reuters analysis of risks to watch in Asian countries, kept updated in real time and with graphics and video, click on the links below.
from Andrew Marshall:
Political risk in Asia: What to watch this week
My regular roundup of key Asian political risk themes to watch in the week ahead, with links to the news stories and analysis produced by Reuters correspondents across the region.
JAPAN GETS A NEW PRIME MINISTER (AGAIN)
Japan has its fifth prime minister in three years -- Naoto Kan, 63, a fiscal conservative with a reformist image.
IAEA’s ElBaradei knocks heads together on Iran
At his penultimate meeting with governors of the U.N. nuclear watchdog before he steps down in November, Mohamed ElBaradei gave diplomats a reminder of the colourful prose and no-nonsense authority they may soon miss.
A veteran of the long-running dispute between the West and Iran over its contentious nuclear programme, the director-general of the International Atomic Energy Agency urged the 35-nation governing body to “put (your) heads together to break the logjam,” on the same day that Tehran submitted a package of proposals to foreign powers.
from Africa News blog:
Keeping pirates at bay
There are some expectations that piracy in the Gulf of Aden is about to tail off for a bit. It appears that pirates don't like rough weather any more than anyone else does.
Exclusive Analysis, a political risk consultancy, has conducted a detailed study of incidences of maritime hijacking in order to give its insurer clients the heads up about when and under what circumstances piracy is most likely to occur. It has told the International Underwriting Association of London that the arrival of the monsoon in the Gulf of Aden about now usually keeps pirates on shore. Not so for Somalia, where the waters are generally calmer at the moment. Technically, it is when the Sea Scale hits 5 or 6, that is, rough to very rough.
