With a world in chaos, it’s a good idea to shore up risk controls. Twenty years ago, it was no different.
“I think that the critical to-do for the international treasurer in the remainder of the 90s is to make a geopolitical assessment of the world.” So said Xerox’s then-assistant treasurer for emerging markets Jean-Pierre Bourtin in an article, “Facing up to Emerging Market Risks” in March 1994.
This remains true today as global dynamics change seemingly from week to week. Currently treasurers have to keep an eye on problems as war threatens between Ukraine and Russia; a marauding terrorist army that threatens the entire Middle East (and beyond?); a persistent ebola virus outbreak that continues to spread and in even in China, where that country’s South Seas ambitions threaten to cool US-China relations and impact the economies of its South East Asian neighbors. Disruptions in any of these regions could lead to a host of country-level treasury challenges, including FX hedging issues, supply-chain disruptions and employee-safety concerns.
As IT pointed out in 1994 “… the international treasurer’s role visa vie emerging markets will require new skills. These skills will need to be applied broadly: Including Africa and the Eurasian continent.” Nowadays, those skills need to go farther afield.