TOKYO -- India and Thailand are among the nations where resource nationalism is on the rise, according to a report that shows Asia as a region trending in a hazardous direction for investors.
India moved up to 15th place from 25th the previous year in the recently released Resource Nationalism Index by Verisk Maplecroft, a U.K.-based consultancy.
The index considers resource nationalism risk in more than 190 economies. A higher ranking means businesses face greater risks from government moves to take more control of natural resources.
The 'extreme risk' countries that topped the ranking include the Democratic Republic of the Congo, Venezuela and North Korea. India was among the Asian countries listed a notch below at "high risk," alongside China, Thailand, Indonesia, Myanmar and Vietnam.
India carries one of the world's largest coal reserves. The report says India's ranking takes into account the threat of major political parties incorporating resource nationalism in their platforms ahead of general elections that will be held in several phases beginning April 11.
"Resource nationalism has been frequently offered by India's political groups and trade unions as the solution to curbing graft and corruption within India's extractive sector," Verisk analysts told the Nikkei Asian Review. It cites a 2014 decision by the Supreme Court to cancel 214 of 218 coal blocks that had been allocated to public and private investors.
"With corruption levels remaining high in India," Verisk said, "the risk of a similar scenario occurring cannot be fully discounted."
As for Thailand, the military-ruled country is considered the world's 10th-riskiest, up from 16th last year and 91st in 2016.
Thailand's military, which staged a coup in 2014, has been using its powers "to push through regulation and intervention in business operations without any oversight," Verisk said.
Analysts cited a government order in late 2016 to close Chatree, the country's biggest gold mine, due to environmental and health concerns. The mine was operated by an Australian mining company.
China is also on the rise, according to the index. It is now ranked 10th in terms of national resource risk, up from 21st last year. The report cites the detention of a top executive of CEFC China Energy, the country's largest private energy company, and says a Shanghai government agency now runs day to day operations.
Indonesia moved up one spot to 18th place. In 2018, a state-owned company purchased a majority stake in Freeport Indonesia, which operates one of the world's biggest copper and gold mines, from its U.S. parent, Freeport-McMoRan.
President Joko Widodo called the deal "a historic moment" for Indonesia, and has pledged to boost state income from the mine.
Akio Shibata, president of the Tokyo-based Natural Resource Research Institute, said resource nationalism tends to rise during commodity booms as governments try to monetize investor appetite for resources. But recent trends "indicate new factors behind nationalism, such as concerns over the resource's impact on the environment and its availability over the long term," Shibata said.
Some Asian nations dropped toward the less risk-prone end of the scale. Vietnam fell to the 25th spot, down from 11th in 2018.
But Asia was ranked the worst region in the world, riskier than Africa and the Middle East. The score was skewed by North Korea and Papua New Guinea but nevertheless indicates that investors invite exposure by putting their money into Asia, despite growing demand for energy and commodities.