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Afghanistan

The Afghan central government in Kabul will struggle to defeat the Taliban insurgency, especially with Western countries having withdrawn most of their troops in 2014. Islamic State is also reportedly gaining support in Afghanistan. Overall, the war looks set to continue for some years. Even if peace were achieved, political risks would remain high, thanks to Afghanistan's ethnic diversity, high levels of poverty and illiteracy, de facto warlordism in large parts of the country, and very high degrees of corruption.

  • 30.80
    Country Risk Score
    24.00
    Operational Risk Score
  • Economic Risk Index
    34.00
    Short Term
    42.80
    Long Term
  • Political Risk Index
    40.00
    Short Term
    20.20
    Long Term

Albania

Albania has made significant progress improving its political environment in recent years. The drive to receive EU candidate status (achieved in 2014) was behind some of these improvements. However, corruption remains a big issue, the political system is often undermined by the polarisation of parties in parliament, and judicial institutions are at a relatively low level of development. As a result, we give Albania a score of 57.5 (out of 100) in our Short-Term Political Risk Index.

  • 50.00
    Country Risk Score
    46.40
    Operational Risk Score
  • Economic Risk Index
    37.10
    Short Term
    46.50
    Long Term
  • Political Risk Index
    57.50
    Short Term
    65.80
    Long Term

Algeria

Algerian President Abdelaziz Bouteflika's fragile state of health will intensify the regime's internal divisions, with rival factions competing against each other in the battle for succession. This will nurture policy paralysis and weaken Algeria's already-limited pace of political and economic reform. Whoever ultimately emerges as the next president is highly unlikely to change the structure of the regime or improve the system of governance.

  • 52.20
    Country Risk Score
    41.60
    Operational Risk Score
  • Economic Risk Index
    52.10
    Short Term
    59.90
    Long Term
  • Political Risk Index
    60.80
    Short Term
    57.30
    Long Term

Angola

The ruling Popular Movement for the Liberation of Angola (MPLA) is very dominant in parliament, meaning the main opposition, União Nacional para a Independência Total de Angola (UNITA), poses little threat to the political order. Nevertheless, there is a longer-term risk to stability as political and economic power is increasingly concentrated in the hands of a tiny elite. There is also the unsettled question of who will succeed long-serving President Eduardo Dos Santos. Angola's burgeoning relationship with China could tempt the government to forego politically risky and painful structural reforms.

  • 42.50
    Country Risk Score
    32.30
    Operational Risk Score
  • Economic Risk Index
    37.90
    Short Term
    39.30
    Long Term
  • Political Risk Index
    68.50
    Short Term
    44.60
    Long Term

Anguilla

  • 57.60
    Country Risk Score
    56.00
    Operational Risk Score
  • Economic Risk Index
    48.80
    Short Term
    47.20
    Long Term
  • Political Risk Index
    72.50
    Short Term
    65.00
    Long Term

Antigua and Barbuda

  • 58.90
    Country Risk Score
    54.40
    Operational Risk Score
  • Economic Risk Index
    40.20
    Short Term
    49.10
    Long Term
  • Political Risk Index
    81.50
    Short Term
    73.90
    Long Term

Argentina

The new government under President Mauricio Macri will lead to significant improvements in the country's business environment. Protectionist policies implemented under former President Cristina Fernández de Kirchner will be removed in an attempt to draw foreign investment into the economy. Given that Fernández's Frente para la Victoria (FpV) party maintains a majority in the senate, Macri's policy agenda could face headwinds, as the FpV will be able to restrict his ability to implement large economic reforms. Notably, any deal to end Argentina's ongoing technical default would need to pass through the legislature.

  • 51.90
    Country Risk Score
    48.50
    Operational Risk Score
  • Economic Risk Index
    41.00
    Short Term
    52.90
    Long Term
  • Political Risk Index
    57.10
    Short Term
    63.40
    Long Term

Cabinda

The ruling Popular Movement for the Liberation of Angola (MPLA) is very dominant in parliament, meaning the main opposition, União Nacional para a Independência Total de Angola (UNITA), poses little threat to the political order. Nevertheless, there is a longer-term risk to stability as political and economic power is increasingly concentrated in the hands of a tiny elite. There is also the unsettled question of who will succeed long-serving President Eduardo Dos Santos. Angola's burgeoning relationship with China could tempt the government to forego politically risky and painful structural reforms.

  • 42.50
    Country Risk Score
    32.30
    Operational Risk Score
  • Economic Risk Index
    37.90
    Short Term
    39.30
    Long Term
  • Political Risk Index
    68.50
    Short Term
    44.60
    Long Term

Seychelles

  • 54.70
    Country Risk Score
    55.30
    Operational Risk Score
  • Economic Risk Index
    39.80
    Short Term
    47.10
    Long Term
  • Political Risk Index
    73.80
    Short Term
    57.00
    Long Term

Sint Maarten

  • 52.00
    Country Risk Score
    48.20
    Operational Risk Score
  • Economic Risk Index
    42.30
    Short Term
    48.90
    Long Term
  • Political Risk Index
    67.10
    Short Term
    57.40
    Long Term

Solomon Islands

  • 44.50
    Country Risk Score
    38.30
    Operational Risk Score
  • Economic Risk Index
    38.50
    Short Term
    37.50
    Long Term
  • Political Risk Index
    61.00
    Short Term
    53.50
    Long Term

South Georgia

  • 79.00
    Country Risk Score
    73.70
    Operational Risk Score
  • Economic Risk Index
    73.50
    Short Term
    75.40
    Long Term
  • Political Risk Index
    88.10
    Short Term
    89.50
    Long Term

Andaman Islands

  • 63.60
    Country Risk Score
    47.00
    Operational Risk Score
  • Economic Risk Index
    69.60
    Short Term
    68.40
    Long Term
  • Political Risk Index
    77.70
    Short Term
    71.90
    Long Term

Bolivia

Bolivia's political risk score reflects the prevalence of social unrest throughout the country and inter-regional tensions. Although President Evo Morales maintains robust approval ratings, his extraction-based development strategy has exacerbated tensions with indigenous populations by allowing mines and infrastructure to be built on traditional lands. Protests in several regions have been frequent and occasionally violent. The end of the commodity boom and endemic corruption will heighten unrest, as the government struggles to continue delivering welfare gains to its impoverished population. Many in the elite remain sceptical of Morales, around whom power has become increasingly concentrated. An amendment allowing Morales to run for a fourth term in 2019 will likely stoke stronger opposition in the years ahead.

  • 49.10
    Country Risk Score
    40.20
    Operational Risk Score
  • Economic Risk Index
    56.00
    Short Term
    58.70
    Long Term
  • Political Risk Index
    51.50
    Short Term
    48.30
    Long Term

Cambodia

Cambodian Prime Minister Hun Sen maintains a tight grip on power after 30 years in office, having presided over rapid economic growth in recent years. However, his Cambodian People's Party is facing a growing challenge from a united opposition, prompting tougher measures by the government. Key grievances include authoritarianism, corruption, and land seizures. Long-term risks stem from uncertainity over who will eventually succeed Hun Sen.

  • 48.70
    Country Risk Score
    43.60
    Operational Risk Score
  • Economic Risk Index
    41.70
    Short Term
    41.10
    Long Term
  • Political Risk Index
    62.70
    Short Term
    59.30
    Long Term

Cameroon

Cross-border attacks by Nigeria's Boko Haram militants are destabilising Cameroon's far north, but we believe that violence will remain contained and have little effect on the economically dominant south. The key long-term risk is posed by an inevitable political transition following the eventual end of President Paul Biya's decades-long rule.

  • 44.20
    Country Risk Score
    36.60
    Operational Risk Score
  • Economic Risk Index
    42.30
    Short Term
    46.10
    Long Term
  • Political Risk Index
    61.00
    Short Term
    42.70
    Long Term

Canada

Canada's political landscape is characterised by broad stability and policy continuity. The Liberals' decisive victory in the 2015 election, defying predictions of a hung parliament, bodes well for stable governance. Canada's adherence to fiscal prudence and strong social stability make it one of the highest ranked countries in our Short-Term and Long-Term Political Risk Index.

  • 80.30
    Country Risk Score
    74.30
    Operational Risk Score
  • Economic Risk Index
    72.10
    Short Term
    72.70
    Long Term
  • Political Risk Index
    94.00
    Short Term
    94.30
    Long Term

Estonia

Estonia's political environment is characterised by consensus among major political parties towards liberal economic policy, conservative fiscal management, and EU convergence. Deep divisions between Estonians and ethnic Russians will remain the primary source of domestic political tensions. Fears over Russia's intentions towards Estonia will ensure Tallinn's focus remains on its eastern border.

  • 76.20
    Country Risk Score
    68.50
    Operational Risk Score
  • Economic Risk Index
    81.30
    Short Term
    69.90
    Long Term
  • Political Risk Index
    84.40
    Short Term
    84.80
    Long Term

Latvia

Latvia's large ethnic Russian population (27% of the total) has fuelled concerns that Moscow may attempt to mount a covert destabilisation operation within Latvia's borders, echoing events in Ukraine in 2014. However, Latvia's membership of the EU and NATO should be sufficient to deter Russia from any overt aggression, as this would risk all-out conflict.

  • 67.20
    Country Risk Score
    65.30
    Operational Risk Score
  • Economic Risk Index
    62.70
    Short Term
    60.90
    Long Term
  • Political Risk Index
    72.10
    Short Term
    77.10
    Long Term

Lebanon

Lebanon will remain one of the most politically unstable countries in the MENA region for the foreseeable future, owing to its complicated mix of ethnic communities in a relatively open and democratic environment. The fact that neighbouring Syria has experienced a complete breakdown in its security environment poses additional risks to Lebanon's stability. Sectarian tensions will remain elevated over the coming quarters, which will contribute to protracted legislative gridlock amidst an already fractious parliament. A return to civil war is unlikely, but Israel may eventually launch new air raids on Hizbullah, gravely harming Lebanon.

  • 50.30
    Country Risk Score
    46.20
    Operational Risk Score
  • Economic Risk Index
    52.70
    Short Term
    57.50
    Long Term
  • Political Risk Index
    42.70
    Short Term
    56.40
    Long Term

Bosnia-Herzegovina

Bosnia-Herzegovina's unwieldy post-Dayton (i.e. post-war) political system continues to prove largely dysfunctional, with deep ethnic divisions and mistrust at both the entity and state levels impeding policy formation. The Muslim-Croat federation is prone to political paralysis, while the Bosnian Serb (Republika Srpska) government is more focused on moving closer to Belgrade than maintaining good relations in Sarajevo. These problems will continue to undermine efforts at implementing overdue reforms and delay the country's path towards the EU. That said, we expect EU accession to remain a broad policy anchor, as a clear majority still view it as the best direction for the country.

  • 42.10
    Country Risk Score
    45.60
    Operational Risk Score
  • Economic Risk Index
    34.00
    Short Term
    40.80
    Long Term
  • Political Risk Index
    34.60
    Short Term
    51.80
    Long Term

Botswana

Botswana has one of the most stable polities in Sub-Saharan Africa (SSA). This is a product of the high degree of social homogeneity and the pro-market, democratic direction of post-independence politics, which have helped the country avoid domestic unrest. High unemployment has been the key drag on the country's score, and public discontent over both public sector wage freezes and privatisation plans could pose problems for the government and president.

  • 59.90
    Country Risk Score
    47.10
    Operational Risk Score
  • Economic Risk Index
    63.30
    Short Term
    59.80
    Long Term
  • Political Risk Index
    72.90
    Short Term
    69.00
    Long Term

Brazil

Brazil is now a well established democracy, but public discontent with corruption, poor quality public services, and inequality poses considerable political risk, and could lead to widespread protests, as seen in 2013. President Rousseff faces impeachment proceedings in 2016, thus weakening her authority, and reducing the scope for economic reforms. Brazil will thus remain an economic laggard among major emerging markets. On the positive side, Brazil benefits from a highly secure geopolitical environment, far from the world's main conflict zones.

  • 57.20
    Country Risk Score
    53.00
    Operational Risk Score
  • Economic Risk Index
    49.40
    Short Term
    61.00
    Long Term
  • Political Risk Index
    60.20
    Short Term
    66.50
    Long Term

Brunei Darussalam

Brunei's political risk profile will remain broadly stable, with the absolute monarchy remaining in place. The biggest risk to our outlook stems from a prolonged period of low oil prices, given that almost 80% of government revenues come from oil exports. This will increase pressure to cut back on spending in the long term, especially if Brunei remains unable to diversify its revenues. That said, our core scenario for the country remains constructive, given our Oil and Gas team's forecast for crude prices to see a modest recovery over the coming years.

  • 66.60
    Country Risk Score
    65.40
    Operational Risk Score
  • Economic Risk Index
    56.70
    Short Term
    57.90
    Long Term
  • Political Risk Index
    90.60
    Short Term
    63.80
    Long Term

Bulgaria

Despite having joined the EU in 2007, Bulgaria's institutional framework remains among the most underdeveloped in Europe, impinging on the country's business environment and macroeconomic potential by limiting more significant foreign direct investment. Nonetheless, we expect the EU to remain a policy anchor for Bulgaria over the coming decade, underscoring relatively stable, if sluggish, economic growth. Key issues holding back an improvement to Bulgaria's political risk profile are corruption, judicial partiality, and lacklustre minority rights legislation.

  • 61.30
    Country Risk Score
    59.70
    Operational Risk Score
  • Economic Risk Index
    50.60
    Short Term
    57.90
    Long Term
  • Political Risk Index
    66.90
    Short Term
    73.10
    Long Term

Burkina Faso

The peaceful passage of the November 2015 presidential elections is a positive sign that Burkina Faso will enjoy a period of political stability following the tumultuous two years that saw popular protests and former President Compaoré's departure in 2014, followed by a coup and counter-coup in September 2015. That said, efforts must be made to ensure political participation across the board, and that a rump of Compaoré supporters or the military do not disrupt the transition process.

  • 39.40
    Country Risk Score
    31.50
    Operational Risk Score
  • Economic Risk Index
    39.80
    Short Term
    43.20
    Long Term
  • Political Risk Index
    40.60
    Short Term
    49.50
    Long Term

Ethiopia

The ruling Ethiopian People's Revolutionary Democratic Front will maintain control in the wake of its 2015 landslide general election victory, therefore ensuring broad-based policy continuity. However, political risks will remain elevated, with increasing social tensions raising the prospect of domestic unrest, while a behind-the-scenes power struggle among the political elite could threaten policy-making. Ethiopia scores a lowly 40.7 (out of 100) in our Long-Term Political Risk Index, with underlying risks of violent clashes; limited media freedom; an inefficient and corruptible judiciary; as well as a failure to fully recognise rights for minority groups, being the key factors weighing on the score.

  • 39.80
    Country Risk Score
    36.00
    Operational Risk Score
  • Economic Risk Index
    37.30
    Short Term
    41.70
    Long Term
  • Political Risk Index
    47.50
    Short Term
    40.70
    Long Term

Eurozone

  • 69.80
    Country Risk Score
    66.60
    Operational Risk Score
  • Economic Risk Index
    69.80
    Short Term
    82.40
    Long Term
  • Political Risk Index
    65.20
    Short Term
    68.30
    Long Term

Falkland Islands

  • 79.00
    Country Risk Score
    73.70
    Operational Risk Score
  • Economic Risk Index
    73.50
    Short Term
    75.40
    Long Term
  • Political Risk Index
    88.10
    Short Term
    89.50
    Long Term
  • 49.70
    Country Risk Score
    45.00
    Operational Risk Score
  • Economic Risk Index
    51.30
    Short Term
    58.90
    Long Term
  • Political Risk Index
    51.50
    Short Term
    46.90
    Long Term

Finland

The government elected in 2015 is comprised of just three parties (Centre Party, National Coalition Party, and The Finns), which is relatively few by historical standards. Furthermore, all three parties share a broad ideological overlap, which will be positive for government stability and policy formation compared to the cumbersome six-party coalition government that preceded it.

  • 77.80
    Country Risk Score
    75.70
    Operational Risk Score
  • Economic Risk Index
    68.30
    Short Term
    69.40
    Long Term
  • Political Risk Index
    85.80
    Short Term
    91.80
    Long Term

France

Political risk in France is generally low, despite the frequency of protests. However, high youth unemployment is a major concern, particularly among ethnic minorities in deprived urban areas, which helps to fuel discontent with the government, and has spilled over into rioting in the past. The two major terrorist attacks in Paris in 2015 demonstrate the growing security risks in the country, which are likely to bolster the far-right ahead of 2017 elections.

  • 74.80
    Country Risk Score
    68.80
    Operational Risk Score
  • Economic Risk Index
    69.80
    Short Term
    72.70
    Long Term
  • Political Risk Index
    82.30
    Short Term
    86.30
    Long Term

French Guiana

  • 74.80
    Country Risk Score
    68.80
    Operational Risk Score
  • Economic Risk Index
    69.80
    Short Term
    72.70
    Long Term
  • Political Risk Index
    82.30
    Short Term
    86.30
    Long Term

Gabon

Gabon scores 65.4 out of 100 in our Short-Term Political Risk index, one of the best results in the region. The country's cohesive elite and efficient policy-making process receive high scores. Widespread unemployment and a series of protests in recent years, however, result in a lower score in the 'characteristics of society' measure in the Long-Term Political Risk index.

  • 47.10
    Country Risk Score
    36.60
    Operational Risk Score
  • Economic Risk Index
    37.70
    Short Term
    44.80
    Long Term
  • Political Risk Index
    65.40
    Short Term
    61.20
    Long Term

Galapagos Islands

  • 51.40
    Country Risk Score
    46.10
    Operational Risk Score
  • Economic Risk Index
    53.10
    Short Term
    60.30
    Long Term
  • Political Risk Index
    53.30
    Short Term
    49.20
    Long Term

Gambia

Gambia is nominally a democracy, but political freedoms under President Yahya Jammeh are becoming increasingly limited. Elections are considered neither free nor fair by international observers, and foreign donors have raised concerns over the country's human rights record. Press freedoms have been curtailed, while homosexuality is illegal and coming under increased inflammatory rhetoric from the president. We see little scope for President Jammeh to leave power voluntarily, leaving the country susceptible to a military coup.

  • 45.30
    Country Risk Score
    39.80
    Operational Risk Score
  • Economic Risk Index
    36.00
    Short Term
    35.30
    Long Term
  • Political Risk Index
    65.00
    Short Term
    55.60
    Long Term

Georgia

Georgia will increasingly seek to modernise its political and economic system to bolster its ties with the EU. This will entail improving governance and reducing corruption. Meanwhile, Russia's increased assertiveness in response to Georgia's drift westward has resulted in Moscow signing integration treaties with Georgia's two breakaway regions Abkhazia and South Ossetia in November 2014 and March 2015 respectively. Georgia's lack of control over these territories is a significant drag on its Long-Term Political Risk index. Georgia's desire to join NATO seems unlikely to be realised, given Russia's firm opposition.