South Asia has a higher risk of terrorism than any other part of the world, with analysts highlighting the potential impact on regional trade.

According to Aon, 66% of countries in South Asia carry a high or severe risk of terrorism or political violence, with the riskiest being Afghanistan and Pakistan. The firm’s analysts say that 78% of terrorist attacks since 2007 have happened in 10 countries, seven of which are in – or partly in – Asia.

The 10 countries are, in order: Iraq, Pakistan, Afghanistan, India, Thailand, Russia, Somalia, Nigeria, Yemen and Colombia.

Authors of the 2015 Terrorism and Political Violence Risk Map also urged caution to those considering doing business in China, Myanmar, Indonesia, Papua New Guinea and the Philippines and warned that “China’s maritime ambitions in the South China Sea have ratcheted up tensions in the region”.

While the primary concern in the case of terrorist attacks is clearly humanitarian, the commercial cost can be extremely high too, with tourism, retail and logistics industries particularly prone to disruption.

“Terrorism can affect trade in a variety of ways, the most common being the hotel/hospitality industry within a country that’s been targeted by a terrorist attack. The Bali bombings in 2002 and 2005 are prime examples of this, as following the attacks a number of bookings and package holidays were cancelled by overseas travellers,” Aon’s head of crisis management for Asia, Julian Taylor, tells GTR.

“The ramifications of this trickle down through the hospitality industry, hitting suppliers, retailers and airline routes. The 24-hour news cycle and social media have exacerbated this effect as information concerning attacks is quickly and freely disseminated across the globe,” he adds.

Taylor also highlights the risk of extortion in certain Asian countries. Earlier in June, it was reported that hackers had extorted a multinational company in Australia for a ransom paid in bitcoin, threatening to harm the child of a senior employee.

In less developed countries, the risk can be more severe and less sophisticated.

“This behaviour is widely seen in the Philippines where the New People’s Army (NPA) regularly make extortion demands on the local and international businesses there. Failure to pay or agree to the extortion demands usually manifests in an attack on a company’s infrastructure and/or workers. This behaviour is understandably a hindrance to trade and investment and some companies may prefer to set up their operations in areas or countries where they will not be subject to terror attacks and demands,” he says.