Coming Soon in Our March 2022 Political Risk Reports

PRS’ coverage of the Americas this month includes updates on Cuba, El Salvador, and Paraguay, as well as fully revised reports on Canada and the United States, where President Joe Biden is running out of time to score some political victories before his Democratic Party must defend its congressional majorities at mid-term elections in November. The report will assess the Democrats’ prospects in light of the stalling of Biden’s policy agenda and the spread of anti-government sentiment amid deepening frustration over rising inflation, and how the trajectory of the conflict in Europe might influence political opinion in the US.
The analysis will focus on the implications of the Democrats’ anticipated loss of control in at least one chamber of the Congress for policies affecting the business climate and the various risks stemming from the brinkmanship and dysfunction that has been the norm during previous periods of divided government. PRS will also discuss the security threat posed by militant far-right groups and the extent to which their strategy ahead of the 2022 and 2024 elections might create risks for foreign entities.
Coverage of Eastern Europe will include an update on Bulgaria and a fully revised report on Poland, which by virtue of geography is both particularly vulnerable to spillover effects of the Russia-Ukraine war and positioned to be a key player in western efforts to contain Vladimir Putin’s expansionist ambitions. The report will examine the implications of immediate security risks and the stresses created by a flood of Ukrainian refugees for the domestic political climate, the economic outlook, and the stability of state finances. The risk assessment will also discuss the potential for Poland’s enhanced strategic value to NATO to provide it with some political protection against the loss billions in EU development funds over its failure to adhere to rule-of-law requirements, and what that could mean for the ability of the incumbent PiS to fend off a challenge from the center-right PO at a general election that falls due in November 2023.
Turning to the Middle East and North Africa, our coverage in March will include a full report on Iran and an update on Sudan, where a democratic transition that was derailed by a military coup in October shows no sign of getting back on track. The government’s resort to deadly force has not brought an end to protests demanding the release of jailed political leaders and the creation of wholly civilian interim government, and the head of the military regime, Abdel Fattah al-Burhan, has dismissed threats of sanctions as inconsequential while pursuing closer ties with Russia.
The update will examine how the increasing isolation of Russia could affect Burhan’s calculus, and what that might portend for international efforts to at least revive the power-sharing arrangement established in 2019 on terms that are acceptable to both military and civilian leaders. Otherwise, the analysis will focus on what failure to break the current impasse would mean for active and prospective investors and for Sudan’s near-term economic fortunes.
In addition to a fully refreshed report on the political and economic risks facing Greece, our coverage of Western Europe this month casts the spotlight on Austria, where we look into the ramifications of a corruption crisis that enveloped Sebastian Kurz, whose tenure as Chancellor was cut short towards the end of last year. We look into a crisis that has seen three individuals in the role in as many months, and how the incumbent, the center-right Austrian People’s Party’s new leader Karl Nehammer, intends to restore faith in his party and the political system more generally in the wake of revelations concerning secret coalition deals questioning transparency in Austrian democracy. Our report also looks into recent and prospective developments concerned with the pandemic, as well as how the crisis in Ukraine is being perceived in Vienna. In that light we look at how it will impact Austria in terms of refugees, in a country where its asylum policy is a matter of contention, as well as how it plans to support Ukraine as part of the EU, and what investors can expect in terms of any fallout for the banking system as well as economic growth and inflation, which is already an issue of concern.
In sub-Saharan Africa we include a short update on the Tigray crisis in Ethiopia and other issues affecting the country, including disputes over the hydroelectric dam project that has just begun producing electricity. We also include longer reports on two of the region’s major cocoa producers, Côte d’Ivoire, and neighboring Ghana where public protests have continued over a range of issues. As far as Côte d’Ivoire is concerned we assess government stability since the presidential election in 2020 and subsequent legislative poll in early 2021. Bearing in mind a series of successful and failed military coups in the region lately we look into any implications of the new national governance plan, the risks of Islamist violence spreading in the Sahel region sparking terror attacks, and how the government is planning to utilize public funds to improve socioeconomic cohesion and invest in infrastructure. Our report also looks into the state of the cocoa industry, as well as prospects for other commodity exports, and we make short-term predictions for key macro, fiscal and external economic risk indicators within the context of the national development plan and the discovery of new hydrocarbons reserves last year.
Over in Asia, our coverage this month focuses on investor risks in South Korea, Vietnam, and also Japan, which has come out in condemnation of the invasion of Ukraine and has sided with its western allies in their sanctioning of the Russian regime. Our report looks into the consequences of potential supply chain shortages and rising input prices for Japan’s hi-tech economy and how the resultant inflation and weakening of economic growth will impact the domestic political scene following the elections that were held in late October. The poll led to an expected victory for the incumbent, conservative Liberal Democratic Party, which suffered a loss of seats that were mostly won by the opposition Osaka-based Japan Innovation Party led by Ichiro Matsui, but which still has a solid majority in the National Diet along with independents and its conservative ally, Komeito. We look in more detail at the plans of Prime Minister Fumio Kishida, who replaced Yoshihide Suga in October, including his government’s regional policy, and planned legislation to achieve economic security by focusing on supply chains, patents, infrastructure, and R&D, with implications for investors. As with other reports, our analysis of Japan rounds-out with forecasts for key macro-fiscal variables influencing Japanese assets and the yen.
Since 1979, The PRS Group Inc., has been a global leader in quant-based political and country risk ratings and forecasts. This commentary represents a sneak peek from our upcoming political risk reports. For more information please contact us at (315) 431-0511 and sales@prsgroup.com, or explore a subscription to ICRG Online and/or World Service Online today to receive political risk updates.