Coming Soon in Our November 2020 Political Risk Reports

Some of the risk items on our analysts’ minds this month include a detailed report on Norway – the risk profile of which has suffered considerably the pandemic began given virus’ impact on global growth and oil demand. We also look at the risks facing investors in Belgium which has the unenviable record of the highest Covid-19 infection rate in Europe. There are now more than 441,000 cases among a population of 11.5 million, and over 11,700 deaths to the disease, forcing authorities into a second national lockdown until at least mid-December as other parts of Europe follow suit. The healthcare and economic crisis will test the fledgling government’s cohesion after a virtual 16-month deadlock following the inconclusive elections in 2019 was finally broken in October with the formation of a seven-party federal coalition led by the Flemish liberal Prime Minister and former Finance Minister, Alexander De Croo, to replace the previous caretaker administration led by Sophie Wilmes. The so-called “Vivaldi” coalition comprises Liberals, Socialists, Greens and a social democratic party spanning the Flemish-Francophone divide and our report looks closely at the details of the coalition agreement with its immediate crisis prevention measures and long-term reform proposals as we assess the implications for macro-fiscal indicators and Belgium’s investor reputation notably in terms of the sovereign debt burden, corporate default risks and impact on bank stability.

In addition to our report on the Congo Republic, our coverage of Sub-Saharan Africa looks at the mounting risks facing investors in Nigeria, where authorities are under pressure following recent youth protests – the #EndSARS Movement – against police brutality and poor governance calling for a ban on the police force’s Special Anti-Robbery Squad (SARS) as part of a seven-point agenda demanding better human rights and a deepening of democracy. The shooting of peaceful protestors by the military at the Lekki toll gate in Lagos in October, where it is believed around 15 people were killed, has inflamed social tensions. The situation is only likely to be worsened by an increasingly concerning economic situation with the fall in oil prices weighing on the exchange rate and contributing to unwelcome inflation as the government raises the prices of electricity and fuel. Our report looks into the various implications as the country faces a potentially debilitating second wave of coronavirus cases, which in addition to the rising cost of living includes an unemployment rate that has now officially topped 27% and is invariably a touch-paper for inflaming ethnic and regional instability as the crisis worsens income and regional disparities. Our report looks at how the government will respond, whether an independent inquiry into the military’s response can pacify the criticism, and what it will mean for the stability of President Muhammadu Buhari’s administration and federal-state relations, as well as the next elections not due until 2023. Our report rounds out with projections for key indicators of economic growth, inflation, and various fiscal and external risk indicators providing investors with a guide to Nigerian assets in 2021.

Finally, our Asia desk compares and contrasts the risks facing Malaysia and Taiwan – the latter being one of the world’s success stories in terms of halting the spread of the virus, all the while sustaining a functioning and thriving economy. We look into the detail of the various macroeconomic risk and corporate performance indicators to assess the outlook for 2021 and ascertain whether Taiwan’s resilience can continue following more than 200 days without a recorded domestic C-19 infection and only seven deaths to the disease since the pandemic began. Our report also goes deeper into foreign policy issues as we assess what the US presidential election outcome will mean for bilateral relations with the successor US administration and look at the contrasting relations with mainland China acting as a risk to Taiwanese security and future prosperity. Our report analyses the domestic political situation, too, to gauge what the Kaohsiung mayoral vote in August implies for domestic policymaking and stability as well as whether support for President Tsai Ing-wen will hold in the light of recent doubts over her sincerity to hold a dialogue with Beijing on cross-Strait relations.

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 PRS Online and/or ICRG Online today to receive political risk updates.

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