COMMENT: Making matters worse

Just a few months after COVID-19 was declared a pandemic, several countries and economies around the world are already seeing the secondary consequences of this unfortunately successful virus.

The economic fallout from the response has begun to mount, resulting in protests in emerging and frontier markets as millions of newly unemployed, underpaid and underfed citizens pose unparalleled threats to stability.

As many as 37 emerging and frontier markets were identified in a recent study as running a high risk of mass protest in the coming months as lockdowns ease and the full economic impacts of the crisis are realised.

Verisk Maplecroft’s analysis shows a number of economies facing a ‘perfect storm’ of risks, as well established grievances over socioeconomic inequalities, civil and political rights and government corruption resurface. The highest risk countries in this regard are Nigeria, Iran, Bangladesh, Algeria and Ethiopia. The risks in several major emerging markets, including India, Brazil, Russia, South Africa, Indonesia and Turkey are only very slightly less acute. In fact, countries from every region, except Europe, fall into the highest risk category.

In sub-Saharan Africa, the report’s authors foresee the risk of protests intensifying amid economic decline, poverty, and a widespread inability to guarantee adequate food supplies.

Key markets affected include Nigeria, Ethiopia and DR Congo, where stability is particularly vulnerable. In Nigeria, even increased production of rice is not keeping pace with demand; and in Lagos and DR Congo, food prices have gone up by as much as 50% in recent months.

In Latin America, Venezuela and Peru are the region’s riskiest for civil unrest, while the atmosphere in Chile, Brazil and Argentina remains precarious.

The outlook is also negative for the US, where a combination of the Black Lives Matter protests and frustration over President Trump’s weak pandemic response makes further unrest almost inevitable.

The index identifies the marginalisation of racial and religious minorities as the single biggest driver of unrest and projects that it has a 65.2% chance of getting worse by the fourth quarter of this year, with Minnesota as the highest-risk state for security force violations before the killing of George Floyd. A dangerous combination of eroding freedom of speech and judicial independence are thought to be amongst the potential blockers to recovery as the country moves towards the presidential election.

The way in which the post-pandemic recovery is managed and subsequently plays out will be key to managing unrest, though so many of the structural issues in each of these countries have not gone away.

In India, whilst the country is tackling an explosion of coronavirus cases, anger over the Citizenship Amendment Act is sure to re-emerge. In Hong Kong, despite the
speed at which the island dealt with the first waves of the coronavirus outbreak, anti-government protests resumed quickly. China’s recent decision to impose national security legislation on Hong Kong will continue to cause civil unrest there – and perhaps even elsewhere.

This article was published in the Summer 2020 issue of CIR Magazine.

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