For many EMs, this will weigh on debt sustainability. However, long-term debt sustainability in many EMs will be weakened by the pandemic, as governments deploy additional spending and weak economic activity drags on revenues. The U.S. election has consumed our attention, making it easy to lose sight of what’s going on around the rest of the world. MNCs not to the rescue. Countries that entered the crisis with weaker fundamentals are likely to face deeper economic scars, while those able to deploy large fiscal packages and effectively manage the virus are best placed for recovery. The Phase One trade deal reached between the two states is at risk of being abandoned, posing risks to a post-COVID recovery in global trade volumes. With some exceptions, emerging markets (EMs) will benefit from a recent return to stability in global financial markets, allowing most of them to avoid the severe balance of payments pressures caused by rapid capital outflows. In 2019, GDP grew 1%, at a slower pace than 2018 (2.7%). The World Bank forecasts global growth of 2.5% in 2020, a small rebound from 2019’s 2.4% estimate. Recent weeks have exposed these challenges. In Côte D’Ivoire’s October 2020 general election, candidates have already invoked. Strained government finances could also push some governments to seek alternative sources of revenues, possibly leading to contract alterations or expropriation in more profitable sectors. The drivers of increased trade protectionism remain in place, and are likely to be exacerbated by deteriorating US-China relations during the pandemic. 100%. RiskMap 2020. At the core of unrest has been dissatisfaction with falling standards of living, growing levels of poverty, and prolonged periods of austerity measures. National lockdowns, curfews, and the health risks posed by COVID-19 have limited the risk of civil unrest in recent months. Russia’s increased role in the Middle East will continue through, for example, its support for the Syrian government. Moreover, elections in Togo, Côte D’Ivoire, Guinea, Burkina Faso, and Mali could generate political instability. Given the imminent end of Donald Trump's presidency, the tension between Israel and Iran becomes glowingly salient. US-Iran relations are likely to dominate the risk landscape in 2020. In some cases, such as South Africa, COVID-19 has exacerbated existing weaknesses in public finances, while the simultaneous drop in global commodity prices has also hit many oil-producing nations. Geopolitical and socioeconomic risks. The Benchmark Index (GPR) uses 11 newspapers and starts in 1985. For example, one result of the January clash between the US and Iran has been increased calls within Iraq for US troops to leave the country, a move that could contribute to resurging terrorism risks in Iraq. All of which could impact commercial real estate. Protest risks have not been confined to Latin America — incidents also occurred in Iraq, Iran, Lebanon, France, and Hong Kong. Policy formation will slow as both parties look ahead to the election and the impeachment trial against President Trump deepens political divisions, already evident in the split control of Congress. President Andrés Manuel López Obrador displayed economic pragmatism in 2019, but headwinds may push him towards increasingly populist policies in 2020. Emerging markets are expected to perform well in 2020, with real GDP growth of 4.3%, up from 3.9% in 2019. The 15th edition of the World Economic Forum’s Global Risks Report is published as critical risks are manifesting. Following the political risk index specific for Western Europe (2016) and emerging countries (2013), Coface launches a global index for 159 countries. Trade tensions continue to present the major risk to the global economy, while the novel coronavirus (Covid-19) outbreak may also disrupt trade and supply chains. image expand icon. Emerging markets are expected to perform well in 2020, with real GDP growth of 4.3%, up from 3.9% in 2019. Pre-existing tensions will be exacerbated by growing scrutiny of governments’ handling of COVID-19. Eurasia Group's Top risks For 2020 The time has come to update our Top Risks 2020, taking into account how the coronavirus has accelerated the trends that worry us most. The coalition will face pressure ahead of a referendum on parliamentary reform and negotiations on the future of the Ilva steelworks. Notes: We identify specific words related to geopolitical risk in general and to our top risks. It remains possible that the military will seek to delay the transition to democracy. Focus is made on the effects on cryptocurrencies, oil, gold and stock markets. However, the underlying drivers of unrest in many economies — declining standards of living, inequality, and corruption — remain, and in many cases may be exacerbated by the pandemic’s economic impact. This survey reviews the empirical literature concerning the impacts of geopolitical uncertainty as expressed by the highly innovative Geopolitical Risk Index (GPR) by Cardara and Iacoviello (2019). Given this scenario, Marsh JLT Specialty has published the Political Risk Map 2020: Mid-Year Update, providing risk ratings for 197 countries across nine perils covering the security, trading, and investment environment from January to July 2020. In the region’s other major conflict, Syrian President Bashar al-Assad will consolidate territorial gains made in 2019, with the support of Russia, making peace negotiations with the opposition unlikely. The index is then normalized to average a value of 100 in the 2000-2009 decade. A move away from multilateralism and global cooperation means that governments may be unwilling to form a coordinated response to a global economic crisis, while there is reduced scope for monetary and fiscal stimulus. Both countries have approved the US-Mexico-Canada Agreement, NAFTA’s successor. Between January and July 2019, 97% of the economic risk ratings that increased did so by between 0.1 and 0.4, compared to just 7% in 2020 (see Figure 1). If the early 2000s were marked by the global war on terror, the 2010s by post-crisis economic recovery and the rise of populism, the 2020s appear set to become the decade of rage, unrest and shifting geopolitical sands. Foreign expertise and financing can be critical in developing such assets. Pricing assets during a pandemic has been tough, with little visibility on the trajectory of Covid-19 infections and the threat of fresh lockdowns looming. In the first half of 2020, one-third of Moody’s sovereign ratings actions related to COVID-19, and all downgraded sovereigns were EMs. For the best experience, please upgrade to a supported browser: Businesses operating in both developed and emerging markets face a complex and often volatile political risk landscape in 2020.