As ECA’s latest Location Ratings are published, Neil Ashman, Senior Location Ratings Analyst, looks at how global events can affect the results.
ECA is constantly monitoring events around the world using a wide variety of sources, and events large and small (and their impact on expatriates) are considered when re-assessing location ratings. As 2015 draws to a close it seems that the global security situation is ever more precarious. At the time of writing we are seeing the fallout from major European capital cities being locked down, a Russian fighter plane being shot down by NATO-member Turkey near the Syrian border and the US issuing a worldwide travel warning in the wake of terrorist attacks in Paris, Bamako, Egypt and elsewhere. In such times it is natural for international HR staff to think of their expatriate assignees and how security situations can impact on the hardships they face in adapting to life abroad.
The impact of political and security situations on international assignees
Some of the incidents mentioned above occurred just after our new survey results were published. However, it is worth emphasising the point that the potential for upheaval, political violence or even terrorism is built into the existing Socio-political Tensions scoring for each published location. When such events occur, a score change in Socio-political Tensions will not necessarily follow if the existing score already recognised the potential for this to happen.
A good example of this in ECA’s recently published location ratings survey is Tunisia. The terror attacks on tourists in Tunis earlier in the year and at Sousse in June were well documented, but did not necessitate an increased Socio-political Tensions score in this survey, as the scoring already recognised the potential for such attacks to occur. Sousse, after all, had been targeted by terrorists in 2013 and the fact that the attempt was unsuccessful did not make the situation any less dangerous. All of this does not mean that difficult locations cannot still see their overall score increase from such events. Although Tunis’ Socio-political Tensions score remained the same this year, other aspects of the score did increase. Overall, Tunis saw one of the higher score increases this survey.
Score breakdowns for New York to TunisIncreased scores for Tunis have resulted in a higher location ratings band, but not because of socio-political tensions, which were already accounted for.
Libya’s continued instability means that Tripoli sees one of the highest score increases this survey with the deteriorating political and security situation impacting on health, availability of goods and services, utility infrastructure and the personal safety of international assignees. Elsewhere, Yemen experienced a bad situation deteriorating further with Houthi rebels taking over the capital, Sana’a, leading to significant conflict between different groups and their external backers. Lebanon’s security situation has also worsened, in part because of the spill-over of conflict from neighbouring Syria. This has led to an increased Personal Security score, highlighting the higher risks faced by international assignees.
Of course, events such as those experienced in Tunisia garner widespread news coverage, partly owing to the involvement of foreign nationals. Worsening security situations elsewhere may be less in the spotlight but ECA’s Location Ratings team still keeps abreast of what is going on and adjusts the scores accordingly. There can be a perception among expatriates in such places that more media coverage equals better recognition of the difficulties they face. However, a look at some other locations which saw increased Socio-political Tensions scores reveals that this is not the case where ECA’s location ratings are concerned. Burundi is one such example – violence rocked the capital Bujumbura and other parts of the country before and after President Nkurunziza’s controversial re-election. The situation there remains volatile.
“There can be a perception among expatriates in such places that more media coverage equals better recognition of the difficulties they face.”
The same can be seen in Cameroon, which has seen the Boko Haram threat spill over the border from neighbouring Nigeria. Even though the main cities are not affected at this stage, the security situation in the north of the country has worsened significantly, with the resulting impact on freedom of movement seeing an increase in Cameroon’s Socio-political Tensions scoring. In El Salvador, the levels of gang violence are now so extreme that some regard the situation to be on a par with terrorism. Even though expatriates are not necessarily being targeted specifically, the dangers of being caught up in the crossfire means that San Salvador’s Socio-political Tensions score has seen an increase this year.
Natural phenomena and disease - the risk to your expatriates
Incorporating the principle of risk into ECA’s Location Ratings applies to more than just man-made or security-related matters. A location’s Natural Phenomena scoring, for example, takes into account the potential for disaster to strike, be it earthquakes for locations in seismic zones or hurricanes for islands in the Caribbean. However, there is also room in the scoring system to recognise the occurrence of a natural disaster within the last survey cycle, and therefore it will come as little surprise to discover that Kathmandu in Nepal has one of the highest score increases this time around.
The earthquake which struck the country back in April caused widespread damage, including in the capital. Disasters of this magnitude may not necessarily result in damage to expatriate property. However, the impact of such an event can have knock-on effects which can make living conditions more difficult, such as disruption to supply lines causing shortages of some goods and services (as seen in Kathmandu). This situation was exacerbated by protests in border areas that held up the delivery of supplies from neighbouring India. Of the 467 locations now published in ECA’s Location Ratings, few others witnessed natural catastrophes in the last survey cycle, though the Pacific island of Vanuatu was hammered by Cyclone Pam in March. The capital, Port Vila, was not spared and it experienced one of the larger increases in scores.
Potential risks to the health of expatriates are also factored into the overall Health score. We saw in my previous article how the Ebola crisis did not significantly affect the Health scores of the locations involved as they already scored very highly in this respect, due to the numerous potential health risks already present. However, the knock-on effects for expatriates were certainly recognised elsewhere in the scoring. One of the few good news stories to come out of 2015 was the declining Ebola threat in West Africa – as a result, the heightened level of certain aspects of the scoring in Monrovia (Liberia) and Freetown (Sierra Leone) have come down as airlines have re-established international flight connections, international schools have reopened and curfew conditions have been scaled back or removed.
Looking ahead to 2016
As we head into 2016, the hope is that this time next year we will be discussing positive developments relating to global security. Experience suggests that this is an overly optimistic wish, illustrated by the recent Paris terror attacks. Once again, the potential for these attacks was recognised in the existing Socio-political Tensions scoring so no interim adjustment is necessary at this stage. However, ECA will continue to monitor events closely in France and elsewhere, and let us hope that this time next year we are not having to discuss the increasingly difficult conditions facing international assignees.