Bridging Risk and Resilience
In this article, Prof. Dr. Khalid Koser, Founding Executive Director at Global Community Engagement and Resilience Fund (GCERF) and Professor of Conflict, Peace and Security at Maastricht University discusses the Global Investment Risk and Resilience Index.
The Index provides unique insight into how exposure to shocks, and the capacity to absorb them, are unevenly distributed worldwide.
What the data shows — and what policy too often overlooks — is that resilience and risk are two sides of the same coin.
There is a striking correlation in the index: countries with higher risk scores (where lower is better) also tend to have lower resilience scores. These are predominantly low-income nations, where a major development challenge is attracting overseas investment to drive employment, growth, and better integration into the global economy. Yet the same countries that most urgently need investment to diversify and grow are often the least able to attract it. Investors tend to shy away from high-risk environments owing to insecurity, volatility, weak governance, and fragile institutions. For investors, social stability and trust are as critical as infrastructure.
The Investment‒Stability Dilemma
The best way to reduce these risks is to build resilience. Building resilience is therefore not just a social priority — it is a key strategy for mitigating investment risk. But this creates a self-reinforcing trap: without investment, countries cannot build resilience; without resilience, they cannot attract investment.
This paradox is especially stark in the context of the green transition, where demand for new energy and digital supply chains will increasingly hinge on reliable, stable environments. A telling example comes from the extractive industries. Many of the world’s rare earth minerals — critical for both the green and digital transitions — are found in regions where investment risks are high, such as parts of sub-Saharan Africa. Security is often the dominant risk — as demonstrated by the suspension of LNG extraction and processing in northern Mozambique — highlighting how instability directly undermines economic potential.
To read further, go to: https://www.henleyglobal.com/publications/global-investment-risk-and-resilience-index/insights/bridging-risk-and-resilience.