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The 2016 Political Risk Outlook

The global turbulence of 2015 is set to continue in the coming year, according to the 2016 Political Risk Outlook released by Verisk Maplecroft , which forecasts little respite from the political instability, civil unrest, economic volatility, security crises and geopolitical rivalries that defined the last 12 months.

Verisk Maplecroft highlights low commodity prices as one of the primary drivers of political risk in major producing countries across Africa and Latin America, while the increasing international threat posed by the Islamic State and rising tensions between Iran and Saudi Arabia are flagged among the foremost geopolitical risk multipliers.

Global terrorism threats on the rise

Verisk Maplecroft recorded an estimated 7,750 conventional terrorist acts in 2015, and the company doesn’t expect the global risk from terrorism to diminish in 2016, with the Middle East and Africa on the frontline in the fight against radical Islamists. Islamic State will remain resilient in Syria and Iraq, despite the international coalition’s efforts to defeat the group. This is due, partly at least, to a lack of alignment between the agendas or methods of key local, regional and global powers involved in Syria and Iraq.

As the international coalition doubles-down on its efforts to eradicate Islamic State, the group is expected to add momentum to its terrorist campaign well beyond its heartland in Syria and Iraq. Armed groups which have pledged allegiance to Islamic State in such countries as Egypt, Libya and Nigeria will figure prominently in 2016, exacerbating existent security concerns in these countries. As made abundantly clear during the November 2015 Paris attacks, Western intelligence agencies will continue to struggle to manage the risk posed by returning Western members of the Islamic State and by lone wolf attackers at home.   

Geopolitical concerns

Geopolitical tensions will remain acute in a number of world regions through 2016. Tehran and Riyadh will almost certainly fail to bury the hatchet, instead intensifying their struggle for influence and power in the Gulf, Levant and beyond. Escalating conflict through proxy forces could increase the risk of disruption to business operations and supply chains in the MENA region.

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