No scores rose by this magnitude in January-July 2019. In July 2020, for example, Serbia faced a wave of unrest following government plans to reintroduce weekend curfews and criticism of the government’s handling of the crisis. Businesses can be exposed to political risks including currency inconvertibility, trade embargoes, seizure of assets by host governments, and political violence. Notes: We identify specific words related to geopolitical risk in general and to our top risks. The pandemic is likely to drive rising sovereign credit risks in the coming quarters. Welcome to KCL Geopolitical Risk Society’s second annual risk report. The pandemic’s economic and social impacts are driving significant shifts in global political risk — introducing new dynamics and accelerating existing geopolitical megatrends, such as trade protectionism and the transition to a multipolar world order. Markets across Sub-Saharan Africa, Asia, and beyond require investment in transport infrastructure, logistics networks, and power assets. 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. 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. Commotion, Currency Regulatory changes may look to increase government royalties, potentially weakening operating environments. Tensions on the Korean peninsula also look set to rise, with North Korea severing communication lines with the South and blowing up a joint liaison office in June 2020. International focus on COVID-19 may also be masking simmering tensions between Iran and the US. Putting aside the geopolitical risk… Amid an economic recession, high inflation, and currency depreciation, Fernández is expected to begin debt renegotiations. Sudan posted the most significant global deterioration in STPRI score, falling to 21.7 from 36.3. Emerging markets are expected to perform well in 2020, with real GDP growth of 4.3%, up from 3.9% in 2019. 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. In the same period in 2019, no country posted a rise of this magnitude. Physical damage to assets due to political violence, including war, and resultant losses of business income. As lockdown measures ease, some protest movements will probably resume, as new motivations for demonstrations emerge. zoom out. 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. 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. The conference will feature key research from the Centre on modelling catastrophe risk to business activities, as well as provide perspectives on their new and emerging risk challenges. Power Shifts: 2019 in Review, 2020 U.S. Election Outlook. Conflicts grew by +100% between 2007 and 2015. US-Iran relations are likely to dominate the risk landscape in 2020. Abandonment of assets due to war, terrorism, and other forms of political violence. Here’s how the Geopolitical Risk Factor (GRF) has performed on a cumulative basis over the past 3 years: Cumulative Returns: Geopolitical Risk Factor (1/1/17 - 1/23/20) Here, we can see that the factor experienced a steep decline throughout most of 2017, bottoming out at -1.44% on 8/7/17. 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. So far in 2020, TDF’s allocations to Tencent was a major contributor to its overall performance. We then use text analysis to calculate the frequency of their appearance in the Refinitiv Broker Report and Dow Jones Global Newswire databases as well as on Twitter. ... in a conference call to discuss the geopolitical advisory firm's annual risk-assessment forecast. 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. 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. In July 2020, for example, Serbia faced a wave of unrest following government plans to reintroduce weekend curfews and criticism of the government’s handling of the crisis. zoom in. In 2019, business losses due to political risk were higher than ever. As the US presidential election approaches, relations are likely to deteriorate further. Export/import restrictions, causing losses on trade transactions. Far from filling the gaps on critical issues like climate change, poverty … In July 2020, the UK government announced that Chinese firm Huawei’s technology would be banned from its 5G networks. RiskMap 2020. The drivers of increased trade protectionism remain in place, and are likely to be exacerbated by deteriorating US-China relations during the pandemic. The pandemic’s onset largely froze existing protest movements, with the risk of disruptive protests falling in places like Chile and Hong Kong. The politicization of trade and investment relationships has extended to public health, with leaders in both countries routinely blaming the other for the pandemic. This study examines trends in climate-related financial disclosure among 58 financial firms in Canada including banks, pensions, insurance, financial Crowns, and credit unions over three reporting cycles (2017, 2018, 2019). rate. RiskMap is the leading annual forecast of political and security risk, compiled by Control Risk experts worldwide. Cooperation between China and the US on the pandemic has been weak, and tensions have risen over Hong Kong SAR, Taiwan, and the South China Sea. The EU will look to offset Brexit’s financial impact by seeking increased member contributions to its budget, while the new European Commission President, Ursula von der Leyen, will seek to launch plans for a European “Green Deal” in 2020. Venezuela’s political crisis is unlikely to be resolved in 2020. Managing Risk. 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 Elevated debt levels pose notable risks to financial stability in many markets amid a more fragile global growth outlook, tendency toward fiscal and current account deficits, slowing productivity growth, and a growing preference for riskier borrowing. Emerging markets are expected to perform well in 2020, with real GDP growth of 4.3%, up from 3.9% in 2019. 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. We see geopolitical risk as a material market factor. The coalition will face pressure ahead of a referendum on parliamentary reform and negotiations on the future of the Ilva steelworks. Welcome to RiskMap 2020. In contrast, Brazil is likely to continue investor-friendly economic reforms, although municipal elections in October 2020 may slow progress. 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. In late 2019, destabilizing anti-government protests occurred in Colombia, Chile, Ecuador, Haiti, and Bolivia. 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 year's report was originally published on 6 January 2020 and updated on 19 March 2020. north-south regional divides, increasing the risk of election related violence. The Geopolitical Acts (GPA) index only includes words belonging to Search groups 5 and 6. Internationally it poses increasing management challenges, particularly at board level. A recovery is difficult to forecast, however, given the significant uncertainty over governments’ ability to contain and manage COVID-19, particularly without a vaccine. We also found a unidirectional causality relationship running from geopolitical risk index to tourism (Table 5, row 4). Unrest is expected to leave the economy 4.5% smaller at the end of 2020 than was projected before the protests. 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. [prod, eu2, s7connect, crx3, nosamplecontent, publish, crx3tar]. In late 2019, many Latin American countries were confronted with this dilemma, exemplified by protests in Bolivia, Chile, Colombia, and Ecuador. 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. There is a growing risk of disruptive protests in response to the reintroduction of containment measures, as willingness to comply with restrictions wanes. Image: World Economic Forum Global Risks Report 2020 In fact, respondents to the Global Risks Perception Survey, which underpins the report, rank issues related to global warming – such as extreme weather and biodiversity loss – as the top five … 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. moody's defines credit risk as the risk that an entity may not meet its contractual, financial obligations as they come due and any estimated financial loss in the event of default. The two countries are likely to remain strategically opposed on issues such as protection of intellectual property and state support for certain industries. Our geopolitical risk calendar details the key upcoming geopolitical events across the world. Report 2020 Insight Report 15th Edition In partnership with Marsh & McLennan and Zurich Insurance Group. 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. Iraq is likely to be the immediate focal point for US-Iranian confrontations, elevating political risk in the country. Iran’s accidental shooting down of a passenger plane during the recent incidents with the US is likely to strain relations with the international community, while European governments have formally triggered a dispute mechanism in the 2015 nuclear deal, increasing pressure on its sustainability. The US presidential election also looms large in 2020. The US electorate is highly polarized, with President Trump’s impeachment exacerbating divisions, despite his acquittal on February 5. Political risk has increased in a number of Latin American countries, as governments find it increasingly challenging to balance economic reforms and social stability. 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. Research Report Climate-Related Financial Disclosure in the Canadian Financial Sector. For many EMs, this will weigh on debt sustainability. This period of transition between the election and a new administration is ripe for a geopolitical risk event, says one strategist. Blockage of cross-border cash flows due to currency inconvertibility and non-transfer. US politics in 2020 will focus on the November 2020 presidential election, which will likely reflect a highly polarized electorate. 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. The Benchmark Index (GPR) uses 11 newspapers and starts in 1985. Insecurity will continue in 2020, despite increased security cooperation and promises of more French troops. 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. The geopolitical flashpoints that we highlighted in March 2020 have not gone away. 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. 18 November 2020. Outside of the US-China rivalry, recent months saw a Sino-Indian confrontation in the Himalayas in which at least 20 troops were killed. Only 23% of countries posted any increased economic risk. Managing Risk While the Political Risk Map 2020 highlights a challenging geopolitical and economic outlook, there are pockets of significant opportunity. A permanent resolution is unlikely in 2020, however. The deepening Sino-American rivalry has accelerated since the onset of COVID-19. 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. Findings from this year’s Political Risk Map 2020 echo the World Economic Forum’s Global Risks Report 2020 earlier this year, which found that economic confrontations between major powers are among the most concerning risks for 2020. Moreover, risk ratings have increased by a larger magnitude compared to the same period last year. Sino-American rivalry is expected to deepen in 2020, particularly as the US presidential election approaches in November. This reflects President Paul Kagame’s dominant political position and policy stability, which supports continued economic growth and a stable business environment. Elsewhere, tensions between Russia and the West are expected to continue in 2020. 100%. Focus is made on the effects on cryptocurrencies, oil, gold and stock markets. The Phase One trade deal reached between the two states is at risk of being abandoned, posing risks to a post-COVID recovery in global trade volumes. The first geopolitical risk is in second place overall, with a GBI of 45 (up from 36 in the previous report). 30 January 2020 | Geopolitical 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. 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. Increased volatility in previously stable regions and the uncertainties that follow political change are key geopolitical drivers of familiar and emerging risks. While economic data from Europe showed a tentative move toward recovery, fears of a second wave of infections may yet undermine momentum. 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. ... 2020, from $4.056 trillion on January 7, 2019. This period of transition between the election and a new administration is ripe for a geopolitical risk event, says one strategist. Our expectation that tech firms will be increasingly caught in the crossfire is playing out, while countries find themselves under geopolitical pressure to choose sides. The 15th edition of the World Economic Forum’s Global Risks Report is published as critical risks are manifesting. Geopolitics will dominate the risk environment in the Middle East. The geopolitical flashpoints that we highlighted in March 2020 have not gone away. The challenge in risk forecasting, and indeed the key geopolitical threat the world is facing in 2020, is the unpredictability of both black swan events and human behavior. Trade tensions are also likely to amplify, if or when a global economic recovery takes hold. 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. In Côte D’Ivoire’s October 2020 general election, candidates have already invoked. In 2020, 40% of ratings increased by between 1 and 1.4. A transition period will come to an end in December 2020, and pressure to reach a trade deal will increase throughout the year. At the core of unrest has been dissatisfaction with falling standards of living, growing levels of poverty, and prolonged periods of austerity measures. Canadian Crude Index ... Oil Glut Overshadows Geopolitical Risk In 2020 By Nick Cunningham - Jan 16, 2020, 6:00 PM CST. However, each region has its own risk profile, which needs to be properly understood. With many governments looking to ease pandemic lockdown measures, attention is focused on the shape and size of an economic recovery. 30 January 2020 | Geopolitical. The two countries account for more than 40% of global GDP. Amid these headwinds, many governments face a difficult balancing act. 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 International Monetary Fund forecasts growth in Sub-Saharan Africa to accelerate to 3.5% in 2020/21, up from 3.3% in 2019. 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. In the same period in 2019, no country posted a rise of this magnitude. However, firms looking to capitalize on such opportunities must navigate a complex and dynamic risk environment. 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. Energy companies will continue to be forced to reevaluate future investment as policy shifts and judicial challenges begin to affect reliance on traditional hydrocarbon plants to generate electricity, especially in Europe. While the Political Risk Map 2020 highlights a challenging geopolitical and economic outlook, there are pockets of significant opportunity. Pandemic containment measures have frozen economic activity in many states, while some have faced collapsing tourism revenues, or weak global commodity prices. Europe 21:55, 18-Nov-2020 Ericsson warns Sweden's ban on rival Huawei is 'a risk for the economy' Giulia Carbonaro Share . Geopolitical risk is distinct from existing measures of economic, financial and political risk. Following the UK’s departure from the EU on January 31, focus will shift to negotiations over its future relationship with Europe. Bolivia’s political environment will remain precarious in 2020, following the resignation of President Evo Morales in November 2019 amid allegations of electoral fraud. This update to the Political Risk Map 2020 draws upon data from the Marsh JLT Specialty’s World Risk Review platform. image expand icon. Issues related to global trade will continue, resulting in persistent political and economic uncertainty for businesses. RISKMAP 2020 Africa link icon. While neither side is expected to seek a direct military confrontation, an unintended escalation is possible. This is particularly true of Africa, where the risk profile varies quite significantly from country to country. 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. 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. This study investigates whether geopolitical risks influence Chinese firms' cash holdings. Nafta ’ s World risk Review, our proprietary country risk platform risk. Physical assets or Equity investment for Map updates and to receive our latest political risk index tourism... 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