Cyberattacks, Trump and Middle East make for a precarious 2018

Joke Christmas crackers featuring President Trump and Kim Jong-un. Tensions on the Korean peninsula will be one of the greatest risks to business in 2018.

Business faces uncertainty over the next year as geopolitical tensions continue on the Korean peninsula and the threat of large-scale cyberattacks looms, a report has warned.

Regional rivalries in the Middle East and unpredictable world leaders, including President Trump, also pose a threat to companies, according to Control Risks, the international consultancy which advises businesses on political and security threats. Founded in 1975, it has 36 offices around the globe and employs about 3,000 people.

The risks of a “miscalculation and accidental escalation” in the diplomatic dispute between the White House and Pyongyang are at their highest since Kim Jong-un became the North Korean leader in 2011, the consultancy said in its annual Riskmap analysis.

“The biggest risk is that the next world order will be imposed, not agreed, set-off by further nuclear brinksmanship between the US and North Korea, or wide scale destabilisation in the Middle East,” Richard Fenning, the chief executive of Control Risks, said.

“While these events are unlikely, what is certain is that global dynamics and perceptions of risk are being shaped by a more robust, personalised and unpredictable style of political leadership in many parts of the world, making business planning very difficult.”

The political rivalry in the Middle East between Saudi Arabia and Iran was also highlighted as a concern by Control Risks because it could inflame conflicts and enmities in Syria, Lebanon, Iraq and Yemen and between Israel and the Palestinian territories.

Hacking groups such as Wannacry, Notpetya and Bad Rabbit could return next year, “but in a more powerful, targeted and disruptive manner”. “National infrastructure systems are particularly at risk.”

The report also highlighted a scenario whereby President Trump pulls the United States out of its free trade agreement with Mexico and Canada, departs the World Trade Organisation “and goes after China on trade”. It said that there was a low likelihood of this happening, however.

The growth of the global economy was said to provide cause for confidence when 2018 begins, however. “We are more optimistic than previously . . . The problem is that a lot of that economic confidence is quite brittle,” Mr Fenning said. He added that, while political turbulence is likely to be influenced by “heightened nationalist pressure” next year, globally-focused businesses should try to start the year with a cool head.