Richard Fenning's company is based in London but its global network provides the firm with the data necessary to predict major geopolitical events - usually
A Richard Fenning, the chief executive of Control Risks, runs a business headquartered in London that employs more than 2,000 people in 34 offices around the world.
It has a presence in places as diverse as Dubai, China, the US and Brazil. It's a risk management firm with three main elements: political; integrity; and security risk consulting.
These range from the cerebral to the hands-on: the political risk element assesses the geopolitical risks of doing business anywhere in the world; the integrity element looks into the ethical aspects of business practices; and the security element is there to ensure safety of personnel and property.
The security element is probably the biggest, while the integrity and risk assessment business is the most profitable. As a whole it's a big business and growing: Mr Fenning estimates his firm and rival operations are part of a US$3 billion (Dh11.01bn) industry and as the old certainties fade away, the opportunities are growing.
Mr Fenning has been at Control Risks since 1993. Prior to that he worked as a consultant, mainly with Price Waterhouse with whom he spent three years in Tokyo. He studied history at Bristol University in England and is a director of Merlin, an emergency medical relief charity.
The National met up with him at the firm's offices at the Dubai International Financial Centre to discuss the Arab Spring and why nobody saw it coming; if the world is getting riskier; and whether Somali pirates should stick to their core business plan.
At the beginning of the year you published your annual RiskMap. Much of the Middle East was deemed to be low risk, coloured in green, not red. Quite a bit has happened since then. So what went wrong with your forecast?
The uprisings in Tunisia, Egypt and beyond were largely unpredicted by analysts and governments alike. Although all the fundamentals of instability were present - and we continually advised caution when assessing these countries - like everyone else we did not foresee the sweeping revolutionary change that descended so quickly upon the region. In a sense this is the unquantifiable of geopolitical analysis. That being said, looking back at past RiskMaps, we long urged careful assessment of regional states, particularly with transition scenarios affecting dynastic republics across North Africa. Our analysts had been highlighting the potential for more widespread unrest. So while we did not pinpoint the immediate prospect of revolutionary upheaval, we were certainly alert to the structural challenges and concerns underlying the current unrest.
What lessons do we draw - and not just the danger of forecasting?
Really, to ensure that outlying scenarios are given due consideration. In Egypt, we had advised there was a prospect of upheaval as the country transitioned into the post-Mubarak era, but because the system appeared outwardly stable it was not given sufficient deliberation. The current moment of change teaches us that we have to consider the most unlikely scenario, even if it appears a remote possibility.
So, has the Arab Spring been good for business in general and not just your business?
The Arab Spring reflects an extraordinary moment in global geopolitics and points to the increased need for in-depth, informed assessments of challenging operating environments. We help businesses operate in choppy waters and in that sense we have been very busy of late. Beyond our own services, such a monumental geopolitical moment does, of course, present both new opportunities and challenges for global businesses, so certainly many are likely to be very busy responding to the shifting dynamics.
One of the areas you are involved in is Somali piracy. What is your opinion on the situation?
Somali piracy is a growing threat to world trade, in terms of both the expanding threat they pose in the Arabian Sea and Indian Ocean and the rising risks to crew safety. But, keeping things in perspective, less than 1 per cent of ships transiting the region last year were attacked, and far fewer were hijacked. But piracy is a very lucrative and attractive business model in Somalia, which means it will not disappear any time soon. Shipowners and masters need to take concrete steps to reduce the likelihood of an attack, the chances of a successful hijack and the potential for harm to crew and cargo.
What advice would you give to a Somali pirate?
They have had a "business model" that until recently has worked well - managing their own supply chain, and keeping clear of terrorist affiliations. However, as the naval response gets ever tougher, this model will become increasingly less effective. And should they become associated with terrorism, this would force the hand of the international community. Somali pirates used to portray themselves as defenders of national sovereignty and natural resources; some still do. They also argue that they bring money and employment into desolate coastal communities. Perhaps they should put their money where their mouths are and help improve the political stability of Somalia. Only with peace and security will Somalis be able to envision a better future and build a legitimate economy.
Do you ever wish for a return to the certainties of the Cold War?
In many ways the Cold War was more static and predictable, although a lot went on "beneath the surface", so to speak, and we should remember how close the world came to nuclear war during the Cuban Missile Crisis.
