Skip to main content

Report: Political instability on the rise

By Sophie Brown, CNN
updated 11:46 PM EST, Wed December 11, 2013
People walk with their belongings in the area around Sinujiif as they evacuate on November 14, 2013 after a ferocious storm and days of heavy floods in Somalia's northeastern Puntland region. Somalia has ranked in the top 10 in Maplecroft's political risk index for the past six years. People walk with their belongings in the area around Sinujiif as they evacuate on November 14, 2013 after a ferocious storm and days of heavy floods in Somalia's northeastern Puntland region. Somalia has ranked in the top 10 in Maplecroft's political risk index for the past six years.
HIDE CAPTION
The top 10 political risk hotspots: 1. Somalia
2. Syria
3. Afghanistan
4. Sudan
5. Democratic Republic of the Congo
6. Central African Republic
7. Yemen
8. Libya
9. South Sudan
10. Iraq
<<
<
1
2
3
4
5
6
7
8
9
10
>
>>
STORY HIGHLIGHTS
  • New research finds the Middle East and North Africa, and East Africa are political risk hotspots
  • The Philippines, India, Uganda, Ghana, Israel and Malaysia saw the largest decrease in risk
  • More than half of countries are classified as 'extreme' or 'high risk' of limiting political freedoms
  • Disparity between political freedom and education drives short-term social unrest

Hong Kong (CNN) -- Growing levels of conflict, terrorism, and the toppling of regimes in the Middle East and North Africa, as well as political violence in East Africa, are driving a rise in political instability worldwide, according to research by UK risk analysis firm, Maplecroft released on Thursday.

Since 2010, one in ten of the countries surveyed have experienced a significant increase in the level of short-term political risk.

These risks include governments asserting control over natural resources, regimes being ousted by popular uprisings and the expropriation of foreign investors' assets.

The findings form part of the latest Maplecroft Political Risk Atlas, which uses 52 indicators to help companies monitor political issues affecting the business environment in 197 countries.

Security at the Kenya/Somalia border
CNN on the ground in CAR
Doctors speak against atrocities in Syria
'Taliban is in a position to come back'

Since 2010, Syria has deteriorated the most. It now ranks second compared with a 44th place ranking in 2010. Somalia topped the rankings.

Afghanistan, Sudan and the Democratic Republic of the Congo also ranked in the top five.

Egypt has been downgraded to "extreme risk" for the first time as a result of violence following the ousting of former President Mohamed Morsy and an increase in terrorist attacks in the Sinai Peninsula, the report said.

Maplecroft warned that Syria, Egypt and Libya are "now so bad" that they will be "mired in exceptionally high levels of dynamic political risk for years to come."

A fall in political violence in the Philippines, India and Uganda has contributed to these countries experiencing the biggest reduction in short-term political risk over the past four years.

Improvements in the level of governance has also helped to lower risk levels in Malaysia and Israel in the same period.

Social unrest

The report said there is a higher chance for social unrest to exacerbate political instability in Bangladesh, Belarus, China, Kazakhstan, Saudi Arabia and Vietnam.

"This is due to the erosion of democratic freedoms, increasing crackdowns on political position and the brutality by security forces towards protesters, compounded by rising food prices and worsening working conditions," Maplecroft said in a statement.

Another concern for foreign investors is that there has been a major increase in oppression by governments worldwide.

"This erosion of political freedoms is central to driving the wider risk of unrest and instability in the medium- to long term," said Charlotte Ingham, senior political risk analyst at Maplecroft.

In the short term, foreign investors face a heightened risk of becoming complicit with the actions of these oppressive regimes, which poses a threat to a company's reputation, the think tank said.

Empowered youth

Instability increases as the gap grows between political freedoms and social gains, such as education and computer literacy among young people.

In 2010, prior to the the Arab Spring, Libya, Tunisia, Iran, Syria and Egypt were among the countries with the biggest divide between political freedoms and social gains.

Maplecroft predicts that the growing imbalance between social gains and political freedoms in Bahrain, Azerbaijan and South Africa will heighten the risk of instability in those countries in 2014 and beyond.

Although China is categorized as "extreme risk" in Maplecroft's ranking of oppressive regimes, the speed of the country's governance reforms is likely to be sufficient to limit the chances of widespread social unrest that could lead to a "jasmine" revolution, according to the think tank.

But China's increased scrutiny of foreign business practices has created compliance challenges for companies operating there, the report added.

Maplecroft cautioned that Vietnam's crackdown on social media and freedom of speech amid growing opposition may undermine the stability of the government in the long term.

Poland has experienced a significant increase in the level of political freedoms over the past four years, according to Maplecroft, and now displays a "near perfect balance" between the level of political freedoms and social gains, which reduces the likelihood of protests and disputes over labor conditions.

Political violence

East African countries saw the biggest increase in the risk of political violence, including terrorism, poor governance, and regimes vulnerable to popular uprisings. Somalia, Sudan and South Sudan scored in the "extreme risk" category, while Kenya and Ethiopia are "high risk." Eritrea, Tanzania and Mozambique also saw a change in their risk category.

Three years after the Arab Spring, more than 60% of countries in the Middle East and North Africa region have seen a significant rise in political violence, demonstrating the long-term political risks associated with forced regime change, the report said.

In the West, the impact of the global financial crisis continues to be seen in high levels of unemployment and underemployment.

This, combined with austerity measures, has contributed to growing inequality and stalling or declining living standards, according to Maplecroft.

Political landscapes both in Europe and the United States have become increasingly fragmented and polarized as populist parties flourished in response to growing voter dissatisfaction with established political parties over these issues.

ADVERTISEMENT
Part of complete coverage on
updated 10:39 AM EDT, Fri April 18, 2014
Tethered to an IV drip, 71-year-old Shin Young Ja lies under a thin fleece blanket, nursing a broken back and wracked with survivor's guilt.
updated 7:23 AM EDT, Fri April 18, 2014
Family members of the missing passengers are pinning slim hopes on floundering air pockets.
updated 12:14 PM EDT, Thu April 17, 2014
An Iranian mother slaps and then forgives her 17-year old son's murderer in dramatic scenes at the gallows.
updated 7:35 AM EDT, Wed April 16, 2014
An "extraordinary" video shows what looks like the largest and most dangerous gathering of al Qaeda in years.
updated 8:30 AM EDT, Mon April 14, 2014
Explore each side's case, reconstructed from Pistorius' court affidavit and the prosecution's case during last year's bail hearing.
updated 8:37 AM EDT, Wed April 16, 2014
Mentions of the 1989 Tiananmen Square student protests or political reform are still censored in China.
updated 5:34 AM EDT, Fri April 18, 2014
The Hadza are one of the last communities of hunter-gatherers in the world -- but losing their land.
updated 9:22 PM EDT, Fri April 18, 2014
In choosing to change a traditional practice, Francis is being as radical as Jesus was in his own time.
updated 7:13 AM EDT, Fri April 18, 2014
Too weak. Can't handle pressure. Unattractive to sponsors. Susie Wolff has heard it all.
updated 10:49 PM EDT, Sat April 19, 2014
Browse through images you don't always see on news reports from CNN teams around the world.
updated 8:30 AM EDT, Fri April 18, 2014
It's like finding a needle in a universe-wide haystack. Researchers have located a planet roughly the size of Earth that could be habitable.
updated 5:40 AM EDT, Fri April 18, 2014
Dubai, long champion of all things biggest, longest and most expensive, will soon have some competition from a neighboring country.
ADVERTISEMENT