Abstract
Today we live with new threats, for the end of traditional military threats (territory and national sovereignty), the complexity of economic and commercial relations, and because the defense became “global” and implemented through information actions. Examples of new threats are telematic terrorism, international terrorism, religious fanaticism, toxic waste disposal, trafficking of sex, illegal people trafficking, and as an extension, organized crime, eversion, national economic security. Examples of new wars are cultural wars, bacteriological wars, technological wars. The chapter analyzed the concept of threat vs. risk, focusing on possible risks identification criteria and the main analytical approaches for risk management.
TopTopics For Discussion
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In the political decision-making process, how is it possible to better organize knowledge for predictive purposes, in a field that has often be regarded as an “art” more than a “science”?
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What are the key indicators of political risks?
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What is the role of the Intelligence Analysis support in a risk management process?
TopIntroduction
Since different regimes seem to pose different challenges for foreign actors, looking at political risk through this lens might help develop tools capable of more reliable and refined assessments.
In this book, Authors define different interpretations of the term “risk”, according to the contexts of application and Ex Ante Evaluation support (see chapter 1):
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Decision-making Under Risk: It generally concerns risky conditions to make a decision
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Decisional Risk: It is connected with the difficult decision-making in itself, as a rational/cognitive process of a decision-maker.
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Risk of a Decision: Risk is defined as the answer to three questions: 1. What can happen? (i.e. what can go wrong?) 2. How likely is that it will happen? 3. If it does happen, what are the consequences?’
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Risk to Manage or Prevent Issues: It concerns the risk of the role of decision-maker.
But to date, the risk concept is understood as the set of possible threats (dall’Acqua, 2018), and threat assessment becomes only a part of a Risk Management Cycle.
Peter Gill (2012) describes that the terms ‘threat’ and ‘risk’ historically were distinguished as Risk means a ‘safety’ risk of accidental harm, Threat means a ‘security’ risk of intentional harm. But to date they are often conflated (see Table 1).
Table 1. Threat and risk: factors in common for which they are multiplied
| PROBABILITY | HARM |
Quality of knowledge:
• Certainty
• Quantifiable risk
• Uncertainty
• Ignorance | (vulnerability)
• Consciousness
• Appetite
• Property, finance, physical security of people, etc |
The only negative view of the risk derives from the fact that only a few decades ago, in the economy, only pure risks were taken into account, which is characterized by the existence of two only scenarios. In the first scenario, highly probable, there are no economic effects on the company, in the second scenario, in low probability, an event that results in a very high level of damage occurs. This notion of risk is perfectly adequate and simpler to manage the pure risks and in general of those risks characterized by a better scenario where no adverse event occurs.
Key Terms in this Chapter
Risk Analysis: A proven way of identifying and evaluating factors that could negatively affect the success of an action or project. It allows you to examine the risks that you face and helps you decide whether or not to move forward with a decision.
Political Risk: It is the risk that investment's returns could suffer as a result of political changes or instability in a country.
Micro Risk: Type of political risk that refers to political actions in a host country that can adversely affect selected foreign operations. Micro risk can come about from events that may or may not be in the reigning government's control.