Page 73 - IRMSA Risk Report 2023

South Africa has attempted to remain neutral in all these conflicts (although this is
increasingly difficult, as even being neutral sometimes means being deemed to have
picked a side). South Africa remains a trading and political partner with every world
power, although recently some republicans in the USA tabled a (relatively toothless)
motion against SA, and the SA government appears to be taking a stronger pro- It would be easy to look just at surface changes but, until that happens, we will continue to live
Palestinian stance. and engage only with the symptoms of global with the chaotic ending of the current systems.
It’s important to develop scenarios for how you would deal with significant shifts in geopolitics shifts, while ignoring or missing the
global power, including regional conflicts and international blockades/sanctions. underlying structural changes that will define a new • Demographic changes happen slowly, but when
Shifting global alliances and the Consider especially (and do an audit of) direct impacts on employees and operations, era over the next decade or so. We are in a ‘hinge they reach key tipping points their influence can
danger of South Africa ‘picking as well as implications for insurance, communication, markets and supply chains. era’ period of history, characterised by disruptive shift societies. India is now the most populous
the wrong side’. Shifting global power bases may require your organisation to take a values-based change; sharp corrections; pendulum swings in nation in the world. China is reversing its one-
stand for or against issues that will create divisions in your customer base and staff. For policy; systems stress; and unprecedented threats child policy to allow for more children. Africa’s
example, when Russia invaded Ukraine, many companies chose to close their stores and opportunities. family sizes are reducing. All around the world,
in Russia and exit the country. What would you do? Where are your moral, ethical
and socially responsible red lines – and would you live out your values if these were women are getting married later and having fewer
crossed? A few key factors illustrate this ‘hinge era’ concept children. More people are living alone than at
South Africa remains well placed as a potential business partner with every other of history: any other time in history. These and other shifts in
country in the world. Take advantage of the opportunity to seek out diverse partners in demographics are beginning to cause significant
different regions to spread geopolitical risk. • Politics in key global countries threaten to be changes in the demand for goods and services; in
exceptionally unstable for the foreseeable future, the availability of workers; in demands on public
with very few exceptions. The US, UK, Canada, services and infrastructure; and in society itself.
Inflation is causing geopolitical upheaval, especially in regions where inflation has been Australia, France, Italy, Nigeria and Brazil, for
negligible for an extended period before COVID-19. Technology-enabled activism, including cyber
The disruption of supply chains, It’s important to anticipate and plan for more disruptions in global supply chains, with example, are as ideologically divided as they’ve •
significant variations in prices associated cost fluctuations. ever been, with new governments bringing the terrorism, will likely increase in the next few
(of both imports and exports) Consider near-shoring, diversifying or integrating supply chains where feasible, to potential of significant shifts in policy. There are years. Where these are linked to nation states,
and the inability to forecast exercise more control and mitigate risk. Build more redundancies into your supply even major concerns around democracy itself in global geopolitics will be directly impacted with
shipping costs. chain. some of these countries (as there might be in rising tensions and hostilities between nations.
South Africans understand the impact of inflation on business and can provide much- South Africa if the ANC fails to win a majority in This is most likely going to center on the USA,
needed insights and planning assistance to international partners. the 2024 elections) and quite significant increases Russia and China, who all use cyber warfare
in far right-wing political groups. Countries like on each other already. A host of other nations
Russia, India, China, Turkey and the Philippines, will continue their involvement, including Iran,
Global instability may affect FDI on the other hand, are run by ageing autocratic Israel, North Korea, India, France and the UK.
in South Africa. It may even lead Traditional sources of FDI may be less inclined to invest in South Africa in the next year leaders who possibly feel the urgency of the The less direct uses of technology, specifically
to capital flight and a decline or two, due to political instability (real or perceived) leading up to the national elections
in business confidence. With in 2024. It may be better to seek out investors with mandates to invest in developing end of their time in power, with potential power social media (#hashtag activism) in the hands of
foreign investors already jittery, markets, as well as highlight the attractiveness of South Africa as opposed to other struggles by successors causing global ripples. individuals or campaigns can quickly stir up an
any signs of upheaval in South BRICS, CIVITS and G-20 developing nations. Be proactive in providing on-the-ground online mob to attack organisations and damage
Africa could be exacerbated insights to foreign partners and investors, so they are not spooked by news reports. • Global economic systems are undergoing reputations. As a result, cyber technology
and have a knee-jerk reaction. deep structural change. It might be too much remains one of the most powerful forces for
of an oversimplification, but capitalism and destabilising the global geopolitical system.
communism – the two dominant ideologies of
Social media and modern Activists who target companies and industries (and, increasingly in the future, also the the last two centuries – have failed to deliver ‘a Geopolitical instability in the world in the 2020s is
communication tools allow better life for all’ (mainly caused by the same structural and era-shifting, leading to significant
people to quickly build individuals who head them up) will continue to have global influence.
momentum for a cause, which Develop pre-emptive campaigns in old-school media and online to create positive issue: the rich have taken too much out of the ideological changes after periods of chaotic
brand equity.
translates into real-world Track social media mentions of your brand, as well as key hashtags associated with your systems and wealth inequality continues to grow transition, as well as destabilising power plays in local
actions and impact more than organisation and your industry. Be prepared to respond to activists. everywhere). New systems will emerge – not just and regional arenas that will have global effects.
ever before. improvements or amalgams of existing ones –

Cyber-terrorism is likely to increase dramatically in the next few years, especially the
hijacking of key systems for ransom, along with activist hackers using cyber-attacks to
Deep fake technologies (both make ideological statements.
video and audio) will be used for Enhance your cyber security systems and regularly stress-test them. Have adequate
both scamming/phishing and back-up and restore plans.
for brand attacks or smearing. Train all staff in cyber security, including entry-level protections against phishing, scams
This will include targeting key and deep fakes. Update your team’s skills in using the latest technologies, especially
persons and operations by AI-driven apps and tools (don’t just ban them – rather empower your team to use them
faking statements (public and wisely and safely).
private). Specifically, have a plan to be able to verify fake audio and video. Know how you will
counter them if they start to go viral.

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