This article can be viewed online at: https://www.mynewmarkets.com/articles/183689/coronavirus-pandemic-makes-politically-risky-world-even-riskier

Coronavirus Pandemic Makes Politically Risky World Even Riskier


The global COVID-19 pandemic has exacerbated an "already volatile political risk landscape" with most countries recording elevated political risk.

According to a midyear update to insurance broker Marsh JLT Specialty's Political Risk Map 2020, all 197 countries rated for the report experienced an increase in their risk scores between January and 2020—that's compared to only 60 countries (30 percent) that experienced an increase during the same period in 2019.

The magnitude of change was also much greater: In 2019, 97 percent of the increases were small (0.1-0.4), while 40 percent of risk scores have risen between 1.0 and 1.4 so far this year.

Among the highlights of the report:

  • The pandemic has further strained the relationship between the U.S. and China, with leaders in both countries blaming the other for its spread. Marsh JLT Specialty said it expects tech firms will be "increasingly caught in the crossfire" as countries find themselves under geopolitical pressure to choose sides. The report noted that tensions have also been simmering between China and India, North and South Korea, and Iran and the U.S.
  • Countries across the world saw a wave of protests and demonstrations against racial inequality and injustice following the death of George Floyd and others in the U.S.
  • After months of pandemic-related lockdowns, many countries are facing the risk of civil unrest as citizens scrutinize the governments' handling of COVID-19. There is also risk of protests for countries looking to reintroduce containment measures such as lockdowns and curfews to combat a new wave of contagion.