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'Security concerns make India 'extreme risk' economy'

India and four other countries have been bracketed as "extreme risk" growth economies by global risks analysis firm Maplecroft citing security concerns.

business Updated: Feb 27, 2011 12:51 IST

India and four other countries have been bracketed as "extreme risk" growth economies by global risks analysis firm Maplecroft citing security concerns.

The UK-based firm's Global Risks Atlas 2011 has rated security as a primary concern for investors in high risk growth economies of India, Indonesia, Nigeria, Philippines and Russia.

"India is rated extreme risk for security as it faces simultaneous threats of terrorist attacks from militant Islamic extremists and Naxalite Maoist insurgents," Maplecroft said.

The report, covering 175 countries, focusses on seven key global risk areas including security, governance, climate change and societal resilience, including human rights.

"... with the Philippines (8), Russia (10) and India (11) rated extreme risk and Nigeria (12) and Indonesia (28) considered high risk in the 'security risk category, politically motivated violence and terrorism must now be a primary concern for investors in these territories," the firm noted.

According to the report, despite good growth, India has a poor human rights record and large sections of the population lack access to basic social infrastructure such as education, healthcare and sanitation.

"This reduces the country's resilience to global risks by creating a less productive workforce, a population susceptible to the spread of disease, and potential instability due to risk of social unrest," it said.

As per the report, four countries -- Somalia, Sudan, Afghanistan and DR Congo -- are in the extreme risk category. All these nations are characterised by weak governance, internal conflicts and regional instability, it added.

"Maplecroft findings indicate that low external debt, energy security, good governance and regime stability are all factors that improve countries' resilience to the conflation impacts of global risks," Maplecroft's CEO Alyson Warhurst said.