Managing Risk. Although the US and China have reached a “phase one” trade deal, it is unlikely to permanently resolve their trade dispute. South Africa will struggle to significantly boost its economic performance in 2020, despite a government economic recovery plan, while contingent liabilities for state-owned enterprises remain significant. A higher STPRI score represents increased political stability and is one piece of Fitch Solutions’ overall political risk index score. Elsewhere in the region, tentative progress toward a ceasefire in Yemen appears possible as Saudi Arabia moves towards de-escalation – reducing airstrikes and engaging in talks with Houthi rebels. Sudan posted the most significant global deterioration in STPRI score, falling to 21.7 from 36.3. We also found a unidirectional causality relationship running from geopolitical risk index to tourism (Table 5, row 4). Many governments across the region face particularly acute debt and fiscal pressures. The U.S. election has consumed our attention, making it easy to lose sight of what’s going on around the rest of the world. The consultancy’s annual ‘Top 10 Risks’ of the year list is considered one of the foremost geopolitical indicators among global investors, multinational firms and various financial and business consultancies. This is particularly true of Africa, where the risk profile varies quite significantly from country to country. Trade tensions and geopolitical turbulence are also adding to the economic uncertainty – in particular the potential fallout from the United States and China’s trade stand-off. RISKMAP 2020 Maritime. For the best experience, please upgrade to a supported browser: Businesses operating in both developed and emerging markets face a complex and often volatile political risk landscape in 2020. In addition to the PRI market outlined above, firms can cover associated security and people risks through political violence and terrorism coverage, as well as kidnap and ransom insurance. Issues related to global trade will continue, resulting in persistent political and economic uncertainty for businesses. The Political Risk Index – Spring 2020 Analysing trends and patterns seen over the last quarter in the world’s most vulnerable countries By Paul L. Davidson | May 29, 2020 The impact of the coronavirus (COVID-19) has had huge impacts to countries across the world. image expand icon. political risk evaluation index 2020 (january 2020) no risk country 0 0,10 0,20 overall evaluation rank country classification p.r. However, long-term debt sustainability in many EMs will be weakened by the pandemic, as governments deploy additional spending and weak economic activity drags on revenues. The Country Economic Risk peril index assesses the risk of economic instability, and the potential effects this may have on businesses operating in the country or territory. Businesses can be exposed to political risks including currency inconvertibility, trade embargoes, seizure of assets by host governments, and political violence. Intra- and Inter-State Conflict Conflict itself will continue to be a key geopolitical risk in 2020. In July 2020, the UK government announced that Chinese firm Huawei’s technology would be banned from its 5G networks. The US presidential election also looms large in 2020. The first is that Iran’s retaliation against the killing of its most important military leader is not over yet. Our interactive map is live so you can check the risk ratings for the countries that you are doing business in or considering for the future. In 2019, deaths in the region due to armed conflict reached their highest figure since 2012, as armed groups took advantage of porous borders and weak regional institutions. It remains possible that the military will seek to delay the transition to democracy. Political transitions can increase country risk and disrupt investment, lending, and insurance, while directional swings in public policy, international relations and/or social attitudes impact market sentiment and shape real business environments. Political Risk Outlook 2020 – Executive summary Download the report 16 January 2020. Given this scenario, Marsh JLT Specialty has published the Political Risk Map 2020: Mid-Year Update, providing risk ratings for 197 countries across nine perils covering the security, trading, and investment environment from January to July 2020. 30 January 2020 | Geopolitical. However, the underlying drivers of unrest in many economies — declining standards of living, inequality, and corruption — remain, and in many cases may be exacerbated by the pandemic’s economic impact. This year's report was originally published on 6 January 2020 and updated on 19 March 2020. The 15th edition of the World Economic Forum’s Global Risks Report is published as critical risks are manifesting. Physical damage to assets due to political violence, including war, and resultant losses of business income. The two countries are likely to remain strategically opposed on issues such as protection of intellectual property and state support for certain industries. With Canada also expected to sign the deal into law shortly, its implementation may alleviate concerns among businesses of supply-chain disruption in North America. Blockage of cross-border cash flows due to currency inconvertibility and non-transfer. Divisions within the ruling African National Congress are also likely to weigh on reform momentum. RiskMap 2020. U.S. 2020 Elections: Greatest Geopolitical Risk From trade wars and climate change, to U.S. domestic politics, these are the top risks in 2020, according to new research. Strained government finances could also push some governments to seek alternative sources of revenues, possibly leading to contract alterations or expropriation in more profitable sectors. Opposition figure Juan Guaidó has struggled to dislodge President Nicolas Maduro from power, despite being recognized as president by 50 countries. Amid a challenging global outlook, Africa is expected to be an economic outperformer in 2020. No scores rose by this magnitude in January-July 2019. credit ratings do not address any other risk, including but not limited to: liquidity risk, market value risk, or price volatility. New Delhi: India under Narendra Modi is the fifth biggest geopolitical risk of 2020, according to the world’s leading political risk consultancy, Eurasia Group. The need to balance social and economic stability is likely to continue in 2020, elevating political risks for firms operating in a range of countries. In the first half of 2020, the pandemic was accompanied in many countries by a renewed focus on racial inequality and injustice, following the death of George Floyd and others in the US, leading to a wave of protests and demonstrations. However, downside risks stem from the continent’s rising sovereign debt load. zoom in. Maps | RiskMap 2020 ... Risk ratings for piracy, criminality, conflict, territorial disputes, terrorism and militancy. Welcome to KCL Geopolitical Risk Society’s second annual risk report. Venezuela’s political crisis is unlikely to be resolved in 2020. Regulatory changes may look to increase government royalties, potentially weakening operating environments. Geopolitical risk is the number one global corporate risk. Contract frustration or cancellation due to default by government, or other government acts. Political risk has increased in a number of Latin American countries, as governments find it increasingly challenging to balance economic reforms and social stability. We see geopolitical risk as a material market factor. Given the imminent end of Donald Trump's presidency, the tension between Israel and Iran becomes glowingly salient. The International Monetary Fund (IMF) forecasts that the global economy will shrink by 4.9% in 2020. Private Equity and Mergers & Acquisitions, Political Risk Map 2020 - Mid-Year Update for Asia-Pacific, Political Risk Map 2020 - Mid-Year Update for Middle East and Africa, Political Risk Map 2020 - Mid-Year Update for the Americas, Strikes, Riots & Civil
The coalition will face pressure ahead of a referendum on parliamentary reform and negotiations on the future of the Ilva steelworks. The countries and territories affected most in 2018 were Japan, the Philippines as well as Germany. Measuring Geopolitical Risk Dario Caldaray Matteo Iacovielloz December 3, 2019 Abstract We present an indicator of geopolitical risk based on a tally of newspaper articles cov-ering geopolitical tensions, and examine its evolution and economic e ects since 1985. Combination of two major components - the security risks (conflict and terrorism) and the political and social risks - allows a complete ranking of the political risk. In 2020, President Sebastián Piñera’s government will implement a US$5.5 billion spending package and pursue constitutional reforms in a bid to quell protests. Countries that entered the crisis with weaker fundamentals are likely to face deeper economic scars, while those able to deploy large fiscal packages and effectively manage the virus are best placed for recovery. For the best experience, please upgrade to a supported browser: COVID-19 has complicated an already volatile political risk landscape. Fresh elections in early 2020 may be a flashpoint between Morales supporters and the country’s emergent center-right. The tech industry is expected to emerge as a particular battleground for the two countries, as both look to reduce technological dependence on the other. One thing is for sure, geopolitical risk is back with a vengeance, which should favor safe-haven investment instruments like, for example, gold as well as the U.S. dollar and the “price” of crude oil. As the US presidential election plays out, much attention will be placed on any Russian attempts to interfere as it did in the 2016 election, straining relations further. Since January 2020, all 197 countries rated by Marsh JLT Specialty’s World Risk Review have seen their country economic risk increase, compared to just 60 countries in the same period in 2019. Civil unrest, including violent protests, erupted in Hong Kong, Chile and India, to name just a few (47 countries witnessed a surge in civil unrest in 2019, according to a Verisk study) . Insecurity will continue in 2020, despite increased security cooperation and promises of more French troops. Policy formation will slow as both parties look ahead to the election and the impeachment trial against President Trump deepens political divisions, already evident in the split control of Congress. All risk ratings referenced in this report were produced by Marsh JLT Specialty’s World Risk Review. The Country Economic Risk rating is an indicator of the propensity for economic adjustment including significant devaluation and/or high inflation and increases in the level of credit defaults among domestic businesses. Eurasia Group's Top risks For 2020 The time has come to update our Top Risks 2020, taking into account how the coronavirus has accelerated the trends that worry us most. National lockdowns, curfews, and the health risks posed by COVID-19 have limited the risk of civil unrest in recent months. In 2019, GDP grew 1%, at a slower pace than 2018 (2.7%). Recent weeks have exposed these challenges. Our geopolitical risk calendar details the key upcoming geopolitical events across the world. The World Bank forecasts global growth of 2.5% in 2020, a small rebound from 2019’s 2.4% estimate. In 2020, 40% of ratings increased by between 1 and 1.4. As a result, the post-COVID recovery is likely to be uneven across countries and sectors. Trade tensions continue to present the major risk to the global economy, while the novel coronavirus (Covid-19) outbreak may also disrupt trade and supply chains. [prod, eu2, s7connect, crx3, nosamplecontent, publish, crx3tar]. They must address economic imbalances through structural reforms, yet doing so poses risks to social stability. In late 2019, destabilizing anti-government protests occurred in Colombia, Chile, Ecuador, Haiti, and Bolivia. Bolivia’s political environment will remain precarious in 2020, following the resignation of President Evo Morales in November 2019 amid allegations of electoral fraud. Chinese telecoms firm Huawei embodies these challenges — the US has increased pressure on allies to not use the company’s technology — a situation that is unlikely to change in 2020. However, each region has its own risk profile, which needs to be properly understood. Geopolitical risk is distinct from existing measures of economic, ﬁnancial and political risk. Almost half (47%) of the countries in the Middle East and Africa have seen their country economic risk rating increase by more than 1 between January and July 2020. ontainment measures have frozen economic activity in many states, while some have faced collapsing tourism revenues, or weak global commodity prices. Export/import restrictions, causing losses on trade transactions. Notes: We identify specific words related to geopolitical risk in general and to our top risks. At the core of unrest has been dissatisfaction with falling standards of living, growing levels of poverty, and prolonged periods of austerity measures. Elsewhere, tensions between Russia and the West are expected to continue in 2020. Managing Risk While the Political Risk Map 2020 highlights a challenging geopolitical and economic outlook, there are pockets of significant opportunity. The pandemic’s onset largely froze existing protest movements, with the risk of disruptive protests falling in places like Chile and Hong Kong. Research Report Climate-Related Financial Disclosure in the Canadian Financial Sector. President Andrés Manuel López Obrador displayed economic pragmatism in 2019, but headwinds may push him towards increasingly populist policies in 2020. The first geopolitical risk is in second place overall, with a GBI of 45 (up from 36 in the previous report). All of which could impact commercial real estate. Conflicts grew by +100% between 2007 and 2015. West African states will struggle to manage security risks in 2020, as Islamist militants increase activity in the Sahel. This reflects President Paul Kagame’s dominant political position and policy stability, which supports continued economic growth and a stable business environment. Agreement Repudiation. The most recent data available — for 2018 and from 1999 to 2018 — were taken into account. This study investigates whether geopolitical risks influence Chinese firms' cash holdings. Pandemic containment measures have frozen economic activity in many states, while some have faced collapsing tourism revenues, or weak global commodity prices. The forecast of political and security risk for sub-Saharan Africa. Pre-existing tensions will be exacerbated by growing scrutiny of governments’ handling of COVID-19. Confiscation, expropriation, nationalization, and deprivation of physical assets or equity investment. The politicization of trade and investment relationships has extended to public health, with leaders in both countries routinely blaming the other for the pandemic. Both countries have approved the US-Mexico-Canada Agreement, NAFTA’s successor. Iran’s economy will also struggle in the face of stringent US sanctions, spurring protests. RiskMap is the leading annual forecast of political and security risk, compiled by Control Risk experts worldwide. The US electorate is highly polarized, with President Trump’s impeachment exacerbating divisions, despite his acquittal on February 5. In the first half of 2020, one-third of Moody’s sovereign ratings actions related to COVID-19, and all downgraded sovereigns were EMs. The geopolitical flashpoints that we highlighted in March 2020 have not gone away. We provide an overview of major upcoming developments. The drivers of increased trade protectionism remain in place, and are likely to be exacerbated by deteriorating US-China relations during the pandemic. In the region’s other major conflict, Syrian President Bashar al-Assad will consolidate territorial gains made in 2019, with the support of Russia, making peace negotiations with the opposition unlikely. We could not reject the null hypothesis of non-Granger causality relationship from geopolitical risk index to real GDP, and from geopolitical risk index to tourism at a (p < 0.05) significance level In some cases, such as South Africa, COVID-19 has exacerbated existing weaknesses in public finances, while the simultaneous drop in global commodity prices has also hit many oil-producing nations. Geopolitical and socioeconomic risks. Peak MNCs. Putting aside the geopolitical risk… Many countries have deployed extensive fiscal stimulus packages to support the private sector, fund additional health care spending, and invest in a post-COVID recovery, all at a time of reduced government revenues. Fiscal challenges will limit governments’ ability to respond to protesters’ demands. The PRI market has developed considerable depth in recent years, and available insurance capacity has never been better. November 8, 2020 12:21 pm 0 An index that measures geopolitical risk based on newspaper reports predicts bitcoin returns according to a study of studies. Targeted assassinations, attacks on military bases and/or critical energy infrastructure are all possible, while Iran may also intensify its activity in the Strait of Hormuz, generating risks for commercial shipping. 100%. Sino-American rivalry is expected to deepen in 2020, particularly as the US presidential election approaches in November. Caldara and Iacoviello use the same methodology to construct a Geopolitical Risk Historical Index (GPRH), which uses three newspapers and starts in 1899. Although the triggers for protests are unique to each country, many of the underlying drivers — poor service provision, economic reforms, falling standards of living, and inequality — will remain in 2020, making further protests possible. Markets across Sub-Saharan Africa, Asia, and beyond require investment in transport infrastructure, logistics networks, and power assets. Iran may use its proxies in the region to increase pressure on the US and its Gulf State allies, with Iraq a potential focal point of activity. Wrongful cancellation by government of permits, licenses, or concessions. The pandemic is likely to drive rising sovereign credit risks in the coming quarters. Meanwhile, US-Mexico tensions are likely to ease in 2020. Geopolitical and socioeconomic risks. Over the past decade, Tunisia had an average annual growth of around 5%, but the economy stalled following the political, economic and geopolitical upheaval which has affected the country since 2009. Moreover, elections in Togo, Côte D’Ivoire, Guinea, Burkina Faso, and Mali could generate political instability. 2017 likely to pay a heavy price, due to intensification of armed conflicts Between January and July 2019, 97% of the economic risk ratings that increased did so by between 0.1 and 0.4, compared to just 7% in 2020 (see Figure 1). The most important geopolitical risks in 2020 could come from two sources. Moreover, risk ratings have increased by a larger magnitude compared to the same period last year. Trade tensions are also likely to amplify, if or when a global economic recovery takes hold. Forced divestiture of foreign investment on order of the investor’s home government. For many EMs, this will weigh on debt sustainability. Indeed, the World Economic Forum’s Global Risks Report 2020 states: “Economic confrontations between major powers is the most concerning risk for 2020.”. Canadian Crude Index ... Oil Glut Overshadows Geopolitical Risk In 2020 By Nick Cunningham - Jan 16, 2020, 6:00 PM CST. Economies globally will increasingly have to choose between US and Chinese technology partners. In Greece, the center-right New Democracy party secured a majority in the July 2019 elections, allowing it to progress with a pro-business agenda and improve the country’s fiscal position, easing relations with creditors. Pricing assets during a pandemic has been tough, with little visibility on the trajectory of Covid-19 infections and the threat of fresh lockdowns looming. A move away from multilateralism and global cooperation means that governments may be unwilling to form a coordinated response to a global economic crisis, while there is reduced scope for monetary and fiscal stimulus. US politics in 2020 will focus on the November 2020 presidential election, which will likely reflect a highly polarized electorate. 10 represents the highest risk, 0.1 the lowest risk. Please log in to access the full marsh.com site. Geopolitical risk dominates in early 2020 From coronavirus to impeachment proceedings to inverted yield curves, there is more than enough content to stir the economic waters this week. Please log in to access the full marsh.com site. The Political Risk Map 2020,produced by Marsh JLT Specialty’s Credit Specialties Practice, is based on data from Fitch Solutions, a leading source of independent political, macroeconomic, financial, and industry risk analysis. With many governments looking to ease pandemic lockdown measures, attention is focused on the shape and size of an economic recovery. Only 23% of countries posted any increased economic risk. In the same period in 2019, no country posted a rise of this magnitude. north-south regional divides, increasing the risk of election related violence. Political risk in the UK improved, following a December 2019 election that gave the Conservative Party the largest parliamentary majority in a decade, boding well for overall stability. Outside of the US-China rivalry, recent months saw a Sino-Indian confrontation in the Himalayas in which at least 20 troops were killed. Copied. Increased volatility in previously stable regions and the uncertainties that follow political change are key geopolitical drivers of familiar and emerging risks. The government is unlikely to meet protesters’ demands in 2020, and if unrest continues there is a growing risk of Chinese military intervention in Hong Kong. Caldara and Iacoviello calculate the index by counting the number of articles related to geopolitical risk in each newspaper for each month (as a share of the total number of news articles). Brexit and the high-stakes US-China trade negotiations remain key concerns. The Citizenship Amendment Act triggered protests beginning in December 2019, and may generate disputes between India’s state and central governments in 2020, challenging the authority of Prime Minister Narendra Modi. The data is drawn from World Risk Review, our proprietary country risk platform. While economic data from Europe showed a tentative move toward recovery, fears of a second wave of infections may yet undermine momentum. There is a growing risk of disruptive protests in response to the reintroduction of containment measures, as willingness to comply with restrictions wanes. At the time of writing, Iran and the US appear to be pursuing de-escalation following a significant flare-up in early 2020, which saw the targeted killing of an Iranian general by the US followed by ballistic missile launches against US facilities in Iraq. Trade disputes could cost the global economy US$700 billion in lost output this year, and businesses remain pessimistic about the outlook. Our country risk platform provides risk ratings for 197 countries across nine perils covering the security, trading, and investment environments. The 15th edition of the World Economic Forum’s Global Risks Report is published as critical risks are manifesting.