Operating in High-Risk Markets

By David Harding

Companies that seek profitable international opportunities often must go to higher risk countries, such as Pakistan, Nigeria, Iraq, and Sudan. Those wanting to operate in these frontier markets may have to deal with military conflicts, increased terrorism, dictators, lack of host government support, reduced infrastructure, and lower levels of health services.

The chief security officer (CSO) of any organization treading into such turbulent terrain must know how to address the unique risks of those situations. Ahead are key points to consider based on my own experiences in frontier markets. First, get good intelligence; second, establish good relations with the locals; and third, know how you will handle a crisis.

Organizations that want to operate in frontier markets need ways to properly assess the threat before going in as well as ways to stay apprised of the broader threat picture in the region and the country so that they will not be blindsided by changing circumstances. Gathering information in frontier environments can, however, be challenging.

Organizations often rely on a single in-country expatriate private security company to provide the analysis of state and intra-state security challenges. This method of information gathering has several advantages, such as the simplicity of information provision, access to intelligence analysis specific to the frontier nation, and a knowledgeable view of internal security challenges within the host nation. Also, there is the potential transfer of risk to the information provider.

The disadvantage of single-source information provision is that it may provide only one perspective, which could be inaccurate. To avoid that problem, the CSO should conduct in-depth question and answer sessions with the prime intelligence provider to reveal gaps and assess the integrity of the information.



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