101 countries see rise in civil unrest, with worst predicted still to come

The world is facing an unprecedented rise in civil unrest as governments grapple with the impacts of inflation on the prices of food and energy, according to the latest edition of the Civil Unrest Index from risk intelligence firm Verisk Maplecroft.

The data, which covers the past seven years, shows that the last quarter saw more countries witness an increase in risks from civil unrest than at any time since the index was first released in 2016. Out of 198 countries covered, 101 saw an increase in risk, compared with only 42 where the risk decreased. The impact is evident across the globe with popular discontent over rising living costs emerging on the streets of developed and emerging markets alike, including the EU, Sri Lanka, Peru, Kenya, Ecuador and Iran.

Torbjorn Soltvedt, principal analyst at Verisk Maplecroft, said: “The resulting threat to economic activity and foreign investment comes at a bad time for businesses as they adapt to rising energy prices. Potential disruption to operations and supply chains is a major concern for companies, as is the potential to be associated with heavy handed responses to unrest from affected governments.”

Although there have been several high-profile and large-scale protests during the first half of 2022, the authors of the index warn that the worst is yet to come. In December 2020, Verisk Maplecroft warned of a new era of civil unrest, projecting that 75 countries would see an increase in civil unrest risk by August 2022. The reality has been far worse, with 120 countries witnessing an increase in risk since then. With more than 80% of countries around the world seeing inflation above 6%, socioeconomic risks are reaching critical levels. Almost half of all the countries on the CUI are now categorised as high- or extreme risk, and a large number of states are expected to experience a further deterioration over the next six months.

Algeria stands out with the largest projected deterioration, after bucking the global trend in the 2022-Q3 release of the index. High hydrocarbons earnings have made it easier to postpone unpopular austerity measures, but rising inflation and more frequent and intense droughts will start to make themselves felt more strongly over the coming months. Europe also stands out negatively, in large part due to the fallout from Russia’s invasion of Ukraine. Bosnia and Herzegovina, Switzerland, Netherlands, Germany, and Ukraine are all among the states with the biggest projected increases in risk.

The index suggests that middle-income countries that were rich enough to offer social protection during the Covid-19 pandemic, but are struggling to maintain high levels of social spending during 2022, are likely to face the highest risk. Eight out of the 10 largest projected increases in risk on the government stability index fall into this category: Bolivia, Egypt, Philippines, Suriname, Serbia, Georgia, Zimbabwe, and Bosnia and Herzegovina.

Verisk Maplecroft warns that only a significant reduction in global food and energy prices are likely to arrest the negative global trend in civil unrest risk. Recession fears are mounting and inflation is expected to be worse in 2023 than in 2022. Weather will be another crucial factor since a cold autumn and winter in Europe would worsen an already serious energy and cost of living crisis. Similarly, an increase in droughts and water stress globally would worsen already high food prices and spark localised protests in affected areas.

Soltvedt added: “The most explosive civil unrest is likely to occur where avenues for dissent are narrowing and where the ability to shield populations from the rise in living costs are limited. Crucially, this is also where investors are likely to rush for the exit first, leaving the most vulnerable governments even less equipped to take measures to reduce the risk of civil unrest.”

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