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Coming Soon in Our April 2021 Political Risk Reports

PRS’ coverage of the Americas this month includes a post-election update on El Salvador and fully revised reports on Bolivia, Guyana, and the United States, where a double-upset victory for the Democrats at run-off Senate elections held in early January handed President Joe Biden an unexpected (and razor-thin) majority in the Senate. Recognizing that the Democratic advantage in both congressional chambers could very well be lost at the 2022 mid-term elections, if not sooner, the president has already secured approval of a $1.9 trillion stimulus spending package and is planning to once again rely on procedural maneuvers to overcome Republican opposition to an infrastructure investment plan worth more than $2 trillion.
The report will examine Biden’s policy agenda and assess the prospects for implementation of key items, focusing especially on those that have implications for the business climate, including regulations, incentives for investment in renewable energy, and a proposed increase in the tax rate on corporations. The analysis will include an examination of the economic risks related to the government’s spending spree, most notably the potential for demand-driven price pressures that compel the Fed to initiate a recovery-killing tightening cycle, as well as the lingering danger of a resurgence of coronavirus infections involving vaccine-resistant variants of COVID-19.
Our coverage of Western Europe this month includes a report on lockdown politics in Finland, as well as a fully refreshed analysis of the investor outlook in Ireland. As in other countries our principal focus is on how the Covid-19 pandemic is shaping political opinion as rows develop over lockdowns, mandatory quarantining, and changes to the vaccination program on the Emerald Isle. Our report assesses the damage this is causing, specifically to which of the three partners in the coalition, comprising Taoiseach (Prime Minister) Micheál Martin’s Fianna Fáil, Leo Varadkar’s Fine Gael and their junior support partner, the Green Party, led by Eamon Ryan. Our report also looks into a number of other pertinent issues for investor risk, including recent criticism from the EU over Irish laws stymying the ability to tackle corruption, the nature of relations with the UK after its departure from the EU, and the impact of Brexit and the pandemic on key economic variables such as growth, inflation, unemployment and fiscal metrics.
Coverage of Eastern Europe will include full reports on Ukraine and Bulgaria, where Prime Minister Boyko Borissov’s center-right GERB once again claimed the most seats, but was left with no clear path to forming a majority coalition after all of the junior partners in the outgoing administration failed to qualify for representation in the legislature. Two new populist anti-corruption parties, the ITN and the ISMV, won a combined total of 65 seats in the 240-member National Assembly, but their unwillingness to partner with the establishment parties poses a potential insurmountable obstacle to pulling together a viable coalition. On balance, there is a good chance that voters might be returning to the polls again before the year is out, with no assurances that the result of a second election would be any more conducive to the creation of a stable majority government than is currently the case.
The report will include an examination of the risk implications of near-term government instability amid ongoing efforts to contain the COVID-19 pandemic and repair the economic damage caused by the health crisis. Bulgaria will enter the post-pandemic period in a stronger fiscal and debt position than most of its EU partners. However, taking full advantage of those favorable conditions will require action to address key weaknesses of the business climate, including the widespread corruption targeted by the ITN, the ISMV, and with less emphasis by the centrist Democratic Bulgaria alliance. Our in-depth analysis will focus on assessing the likelihood of these issues being tackled under various government configurations and will include forecast for key macroeconomic variables under the most likely regime scenarios.
Our coverage of Africa will include a new report on Nigeria’s overall stability, given renewed concerns about President Buhari’s health, strike activity, and continued terrorist attacks in the northeastern sections of the country.  We’ll also look at Nigeria’s economic prospects in light of continued downward pressure on the naira, ongoing current account deficits and dwindling international reserves and less-than-stellar prospects for greater investment flows.
Turning to the Middle East and North Africa, the roster for March includes an update on Oman and fully revised reports on Algeria and Morocco, which will hold simultaneous local, regional, and parliamentary elections in September 2021. The elections will take place in the wake of the largest economic downturn in a quarter century and in a climate of heightened security risks stemming from the breakdown of a three-decade truce with the armed separatist Polisario, which seeks the independence of the dispute Western Sahara territory. The sovereignty issue has complicated relations with the US, thanks to Donald Trump’s controversial recognition of Morocco’s claim to the Western Sahara shortly before he left office in January, and contributed to tensions with the EU, the country’s most important trade partner and a key source of investment.
The report will discuss how the voting results are likely to shape the evolving relationship between the elected Parliament and a monarchy that has exploited divisions among the country’s numerous parties with the aim of recouping the political authority it surrendered in the name of domestic peace during the height of the Arab Spring phenomenon in 2011. The analysis will assess the prospects for progress in efforts to create a more hospitable climate for foreign investment, which will be essential to dampening the danger of social unrest that can be exploited by extremist groups operating in North Africa.
Our extensive coverage of Asia this month identifies prospects for investors in high-risk Myanmar in the wake of the recent military takeover, and the ensuing violence and mass slaughter of civilians, identifying the economic risks, and political and foreign policy implications. We also take an in-depth look into the risks and opportunities in Taiwan, which has been lauded as one of the more successful countries combatting COVID-19, but where Cross-Strait relations are a dominate force worth dissecting, and where political freedom is beginning to be questioned with the government potentially utilizing Chinese hegemony and virus-control for its own gains. Finally, this month we take a look at Singapore and assess whether the crisis in Hong Kong is having a positive impact on this important financial center. Our analysis looks at how the omnipotent center-right People’s Action Party is responding to the pandemic, and how this has been received by the general public. We also look into the country’s foreign policy and why the authorities have become suddenly critical of Myanmar, and what this deviation from the usual policy of non-interference in regional affairs implies for Singapore’s international relations. Our report rounds out with an assessment of how COVID-19 has affected the economy, while outlining prospects for the remainder of the year and the implications for fiscal and monetary policies.
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, or explore a subscription to PRS Online and/or ICRG Online today to receive political risk updates.


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