Coming Soon in Our December 2021 Political Risk Reports

PRS’ coverage of the Americas this month includes fully revised reports on Nicaragua and Panama, along with updates on Jamaica, Uruguay, and Ecuador, where President Guillermo Lasso has been bleeding support amid a wave of deadly violence and a loss of credibility resulting from the businessman politician’s appearance in the Pandora Papers. The erosion of Lasso’s popular support will complicate the task of mustering majority support in the National Assembly, where the main governing CREO and allied parties control just 30 of the 137 seats. The update will discuss the implications of recent developments for the center-right administration’s chances of securing approval of reforms demanded by the IMF as a condition for the release of badly needed loans. In that vein, the analysis will examine the risks associated with a delay in the delivery of IMF support, both in terms of the impact on near-term economic stability and the potential for a fresh debt crisis.
Turning to the Middle East and North Africa, the roster for December includes updates on Iraq and Tunisia, which remains under an indefinite state of emergency amid a political crisis triggered by President Kais Saied’s unconstitutional order to suspend the Parliament in late July, a move denounced by political parties and civil organizations as a coup. Although the president claims to be working non-stop on a program of reforms aimed at creating a basis for stable, democratic governance, the lack of action has cost him the support of Tunisia’s powerful and politically influential labor federation and creates a potentially insurmountable impediment to securing international financial assistance needed to sustain a faltering post-pandemic economic recovery. The analysis will focus on assessing Tunisia’s prospects for concluding an agreement with the IMF, and examining the implications of failing to do so, including the impact on turmoil risk.
Over in sub-Saharan Africa, our coverage looks at investor risks in Angola, Cameroon and Zimbabwe, as the region copes with the new strain of COVID-19 that appears to have originated in South Africa. As far as Angola is concerned there are important political developments coming up next year, with a general election to be held to elect the President, parliament, and for the first time, local councils. Our report looks into the political chicanery being practiced by President Joao Lourenço, and his ruling Popular Movement for the Liberation of Angola (MPLA), which is presently able to steamroller through constitutional and electoral law amendments to its own advantage much to the chagrin of those seeking a fair playing field. Our report looks into the chances of the opposition springing a surprise by joining forces, and also whether investors need to be wary of unrest building, with post-elections instability occurring in light of the outcome. Our report goes on to explore why the economy remains in trouble, despite GDP growth accelerating, and with oil export prices at more favorable levels, noting the troublesome debt burden and the degree of corruption still holding the country back after President Lourenço appeared to make a break with the former Dos Santos regime and offer a fresh start to foreign investors. Further, on the economy, we weigh-up the government’s recent budget, a notable tax change, and investments in the ports and electricity infrastructure, for their impact on both economic growth and the fiscal arithmetic.
In Asia, along with a report on Indonesia this month, our coverage of the most pressing investor risks in the region looks in detail at the latest developments in Thailand, where a student-led protest movement in favor of more democracy and reform of the monarchy is expected to continue its campaigning in the new year in defiance of the quasi-civil authority which is utilising the courts to indict the protagonists. We look at how this issue will develop following a recent legal ruling against several individuals, who my now face lifetime imprisonment, or even the death penalty, after being accused of attempting to overthrow the constitutional monarchy. Our report looks at whether the government will remain cohesive against this threat, and in light of the Omicron COVID-19 variant which is already disrupting the global travel industry, and which could yet have a major debilitating impact on Thailand’s economy by delaying a full blown tourism-led upturn next year following the stop-start recovery in 2021. In that light we assess prospects for the Thai baht, which has already had nervous moments in 2021 on bursts of capital outflows linked to emerging markets risk aversion and specifically Thailand’s twin fiscal and balance of payments current account deficits. Our report rounds out with an evaluation of economic growth prospects, and where we see other important macroeconomic risk indicators heading in 2022, including inflation and public debt.
Our coverage of Western Europe this month includes fully refreshed updates on Denmark, Norway, and the Netherlands, where a multi-party coalition government is expected to be formed imminently involving the same members of the previous administration which collapsed following a social security scandal and which will be led once again by Mark Rutte as Prime Minister. As well as looking into the key details of the prospective coalition agreement, including plans to expand nuclear power facilities to achieve the country’s climate change targets, our report analyses the state of play regarding the pandemic and its effects. We seek to evaluate what to expect in terms of the economic and social impact of ongoing restrictions to contain, first, the delta variant of COVID-19 and, second, the new, apparently more infectious strain, known as Omicron, which appears to have been circulating in the country earlier than previously believed. In light of the protests that erupted in November over pandemic restrictions, and a series of strikes in recent months by various trades union groups demanding better pay and working conditions, we look into the pressures the government will be facing and how this will impact on political stability. Our report also delves into the issue surrounding the recent announcement that Royal Dutch Shell plans to follow Unilever by moving its headquarters from the Netherlands to the UK, despite Brexit, and what that says for the operating environment in the Netherlands.
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.