Why 2016 is proving to be a wild year

WASHINGTON and Seoul are making final preparations for their annual joint military drills in South Korea later this month. The forthcoming events, which have been widely condemned by the North Korean regime, come at a time of escalating tension in the region following Pyongyang's decision last week to test fire a missile into Japanese-controlled waters for the first time.

The stand-off, in which North Korea has threatened a "vicious" showdown if the military drills proceed, is only the latest example of international political strain in 2016. In the last month alone there has been a failed military coup in Turkey; US missile strikes against so-called Islamic State (IS) militants in Libya; and a spate of significant terrorist attacks in Europe.

What this, collectively, underscores are the warnings that geopolitical risks are currently at their highest level since the dissolution of the Soviet Union. For instance, a recent research report from Citi asserts that the world is facing the "most fluid global political environment in decades", while John Drzik, president of Marsh Global Risk and Specialties, has asserted that "events such as Europe's refugee crisis and terrorist attacks have raised global political instability to its highest level since the Cold War".