Can You Still Measure Risk in a Polarized World?

As war is again an integral part of our business environment, I keep returning to a piece Gillian Tett wrote in 2011, in the wake of the Arab Spring. It reads less like a reaction to past events and more like a manual for our present.

“During the past four years,” she wrote, “global investors have undergone a brutal refresher course on the different types of risk the 21st century financial world used to ignore.”

2007 reminded us of credit risk, with the subprime crisis.

2008 brought back liquidity and counterparty risk, as Lehman collapsed and trust evaporated.

2010 reawakened fears of sovereign risk, as European debt cracked the illusion of rich-country safety.

And then came the Arab Spring—what Tett called the “last piece of this puzzle”: geopolitical risk.

Many investors, she observed, were too distracted by financial complexity to notice deeper political undercurrents. Mubarak’s fall in Egypt shocked markets—and revealed how political dominoes can fall just like financial ones, through their own forms of contagion (beyond financial contagion).

This article matters more than ever, for three reasons:

First, it warned against a lack of imagination. Tett quoted a risk consultant in Davos who pointed to growing anxiety even within “stable” Western democracies. That was 2011. Since then, we’ve seen the rise of grievance-driven politics, populism, and the return of fiscal chaos.

Second, it challenged the metrics mindset. KPIs give comfort—but risk doesn’t wait to be measured. When systems are interconnected and fast-moving, linear thinking becomes a liability.

Third, it explained why geopolitical crises are often ignored: they’re scary, messy, and not always quantifiable. But dismissing them as someone else’s problem—until your supply chain, workforce, or market access is disrupted—is dangerously short-sighted. The pandemic and the war in Ukraine already taught us that. Israel and Iran may teach us more.

Geopolitical risk isn’t noise. It’s structure. And unless analysts, academics, and decision-makers start sharing insights across silos, we’ll keep getting blindsided by patterns we could—and should—have seen.