geopolitical risk ratings firm

From the CEO – November 2021

Christopher McKee, PhD, Chief Executive of The PRS Group, Inc.Dear Clients,
As we all know, there are many unknowns surrounding the new Omicron strain that appears to be spreading globally. Early indications suggest that it is more transmissible, yet there is little known about its severity and to what extent it poses a real threat to public health. So far, reports from South Africa suggest the symptoms are mild, and cases have been reported from the Netherlands (where it has been for some time, apparently) to Canada.
Various governments around the world have imposed new travel restrictions, with Japan being notable for closing its borders to international travel. Markets fell on the final day of November amidst generally unfounded suggestions that existing vaccines might not be terribly effective in fighting the new virus and were further pounded when Fed Chairman Powell signaled a more ‘hawkish’ tone, suggesting a quicker taper of the central bank’s bond buying program.
Despite such news, one of the ‘benefits’ of the successive waves of COVID-19 since 2020 is that we now have data affecting the impact of the pandemic on various social, geopolitical, and economic phenomena. Such information offers a way forward, reducing some of the unknowns, and allowing for an enhanced measure of planning.
For example, using our ICRG data, we know that:

  1. Social unrest surges about 14 months after the onset of a pandemic, peaking after 24 months (IMF Working Paper, October 2020);
  2. Exchange rates were impacted more significantly and unevenly during the early months of the COVID-19 onset than during the 2007-08 Financial Crisis. (IMF, WSJ, August 2020); and
  3. ICRG’s ‘Government Stability’ risk indicators were – and continue to be – highly predictive of governments’ response times to the outbreak of infections. (Eichengreen, CEPR, June 2020)

Additionally, focusing on the more immediate impact of the new strain – namely, on border closures and travel and mobility restrictions – some recent data are instructive.
A study by Bickley, et al., ‘How does globalization affect COVID-19 responses?” ( used our ICRG data as a proxy for political risk, and found that, inter alia:

  1. More globalized countries delayed imposing travel restrictions compared to less globalized countries;
  2. Globalized countries had a higher number of confirmed local cases of COVID-19 at the time they implemented the restrictions;
  3. A country was more likely to adopt a travel restriction if neighboring countries (in terms of share of non-resident visitor arrivals) had already done so;
  4. More globalized countries with higher government effectiveness were slower to adopt travel restrictions; and,
  5. Countries implemented policies similar to those employed by their major economic partners, as opposed to those with a close cultural or geographical proximity.

* * *

Turning to November’s ratings a few standouts are worth mentioning. In the Americas, Brazil’s Senate recommended charging President Bolsonaro over his government’s handling of the pandemic. Consumer confidence is rising despite creeping inflation and a jobless rate of over 10%.
In Western Europe, President Zeman (Czech Republic) appointed a new government but there’s a suspicion that he and his allies will undermine the new alliance. Rising infections in the Netherlands has resulted in various lockdown measures and rioting in such cities as Rotterdam.
Over in Eastern Europe, fresh elections witnessed several anti-graft parties now negotiating to form a new government, while Uzbekistan posted some rather impressive economic figures, suggesting the country will lead the region in growth over the next year.
In Africa, attacks against civilians continue in Cameroon, with the country’s vaccination program being stalled by a relatively high rate of ‘hesitancy’ towards getting jabbed. In Ethiopia, Tigray forces moved closer to the capitol, amidst border clashes with Sudan.
In Asia, the approval rating of New Zealand’s prime minister, Jacinda Ardern, is now down to the mid 30% range, as the National party chose a new party leader with Chris Luxon, the former CEO of Air New Zealand. Meanwhile, the economic crisis in Sri Lanka has deepened with some of the country’s banks being blacklisted by China for failing to make import payments.
Finally, over in the Middle East, Sudan’s deposed prime minister was reinstated as protests mount over military rule. Turkey’s lira sank again as the country’s central bank eased, despite higher inflation numbers. Interestingly, the country’s private banks are in rather good shape, with their holdings of short-term foreign debt close to zero.

* * *

I was delighted to address students this month from Harvard and American University in DC over aspects of political risk, emerging markets, and select issues of the day, from inflation to the pandemic to the likelihood of effective climate change policies considering the recent COP26 meetings. Now, as part of a larger UK visit to clients, data partners, there are plans to address LSE’s political risk society early in the year along with the Royal Geographic Society in London. Moreover, we’re very happy we continue to receive well wishes from many in the academic world – across multiple disciplines – for the data and insights generated therefrom.
We have received considerable demand for our recently-released new addition to our popular Researchers’ Dataset series – one that offers clients a more granular look at the political risk subcomponents of the ICRG, supported by 20 years of monthly data. The new series works as an excellent complement to the other data bundles announced this year affecting ESG, corruption, and internal/external conflict. Scores of academic studies have been conducted using these series, providing unique insights in asset volatility, government responses to the pandemic, and many more. Contact us for more information.
Our new book Quid Periculum? Measuring & Managing Political Risk in the Age of Uncertainty, co-edited and co-authored by Peter Marber (Harvard/Aperture Investors) is now available!
The book includes such diverse topics as risk forecasting techniques, reliability measures, the impact of political risk on asset prices and sovereign debt workouts. Also featured is a special roundtable discussion by some of the world’s leading voices in the field on the future of political risk, who combine to address some of the challenges presented by globalization and COVID-19.
November was another fruitful month for new and returning clients, ranging from some of the world’s top universities to the largest institutional investors throughout the US, Europe, the UK, and the Middle East and Asia. Our data are now regularly featured in the research of the IMF, Bank for International Settlements, and various central banks, such as the Bank of Italy.
The new look of PRS is coming soon, too. Paying homage to our roots in the Hindu Arabic number system of the Renaissance period to more recently in the behavioral revolution of the late 1960s, one of our new features will be a regular podcast series, featuring interviews and discussions with some of the most distinguished practitioners and academics in the field of geopolitical risk, from such places as Saudi Arabia, Uzbekistan, the UK, and Dubai. No other podcast series will offer such depth, relevance, and intellectual sophistication. Stay tuned.
Not only is ICRG being used by some of the world’s largest technology firms, but the data are now being incorporated increasingly into the artificial intelligence/machine learning sector, with an emphasis on ESG data! On the latter, ICRG is now the sole source of geopolitical data inputs into some of the risk products offered by RepRisk – the Swiss-based pioneer and leader in ESG data science.
Our ICRG political risk scoring changes were very robust in November, affecting some 85 countries (of 141) and over 110 individual political risk metrics!!
ICRG and related PRS data continue to be the gold standard of all geopolitical risk data among the scholarly and research communities. For example, given Argentina’s recent efforts to restructure its debt obligations with private creditors and the IMF, it was instructive to discover ICRG data being used to shed light on the diminishing immunity of defaulting governments from legal action by foreign creditors. The study found that creditor lawsuits have become an increasingly common feature of sovereign debt markets, strengthening the hands of creditors, and raising the cost of default for debtors. The study’s list of references and compendium of creditor litigation cases (1976-2010) is remarkable. (
Additionally, using ICRG data in part, a recent IMF Working Paper on capital inflows to emerging markets found that such flows are associated with financial deepening through bank loans and deposits. Financial vulnerabilities are notably modest. There is thus only limited evidence for global push effects, pointing towards the importance of domestic pull factors. (
Thanks for your continued support, and please contact us if we can be of any assistance.

Christopher McKee, PhD
Chief Executive


geopolitical risk ratings firm


Christopher McKee is PRS’ CEO and Owner. An international political economist, global investor, entrepreneur, and author, Chris received his PhD from Queen’s University (Canada) and has been involved in the field of geopolitical risk, limited recourse financing, and private sector development for the past 25 years.


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