Risk management firm AKE has released its political risk ratings for the last quarter of 2010. A number of changes have been made to the risk outlook for the Middle East and North Africa to reflect alterations in the political, economic and business climates in the region.
Israel has been taken off negative watch amid sustained growth in recent months, although there are ongoing concerns over a possible fall in exports in the coming quarter. The political situation as regards the Palestinian territories also continues to threaten the security environment, which could have a negative impact on the investment climate if current peace talks fail.
Conversely the Palestinian territories have been put on positive watch amid rising economic growth in the Gaza Strip. However, note that this growth was from a very low level and should not be taken as grounds for optimism. The overall political risk rating remains very poor.
Bahrain has been put onto negative watch amid rising social tensions ahead of the elections in October. Related violence could compromise the island's image as a stable investment location in the Persian Gulf.
Oman has been put onto positive watch amid projected growth over the coming months and following sustained growth so far this year. After suffering through the global downturn Oman has been a good performer in 2010.
Lebanon has been taken off positive watch amid ongoing political tensions and following a series of related low-level but nonetheless concerning outbreaks of violence over the past three months.
Morocco has been taken off negative watch amid steady growth. However, any serious downturn in Europe over the coming months will have a negative impact on the economy.
Tunisia remains on negative watch because of its greater level of exposure to the European market, and subsequently higher vulnerability to developments north of the Mediterranean.
Otherwise, AKE has not altered its political risk ratings for Algeria, Egypt, Iraq, Jordan, Kuwait, Libya, Qatar, Saudi Arabia, Syria or the United Arab Emirates.
We anticipate an improvement in conditions in the UAE over the course of the coming year and look forward to placing the country on positive watch at some point in the future.
A tentative liberalisation of the financial sector in Syria may also provide grounds for putting the country on positive watch in 2011.
In Iraq conditions will worsen if the government-formation process is delayed further. AKE is also concerned about a possible escalation in inter-communal violence in the event that a national census is held in October.
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Founded in 1991 by Andrew Kain, AKE Ltd provides security and risk management services to the insurance, shipping, engineering and energy sectors, as well as supporting NGOs and the Media in more challenging parts of the world.
The AKE intelligence department, based in Lloyd's of London, provides forecasting and political risk analysis to a variety of global clients.
To receive a copy of AKE's full worldwide political risk ratings please contact the intelligence office at intel@akegroup.com +44 (0) 207 816 5454.
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© Press Release 2010
