The global instability of the past year is set to continue into 2016 with no sign of waning, security analysts at business consultancy Verisk Maplecroft asserted in the recently released 2016 Political Risk Outlook. Top areas of risk for investors are the commodities-exporting countries of Latin America and sub-Saharan Africa, amid record low commodities prices and the continued slowdown of China’s economy.
The Middle East proves a further source of geopolitical turbulence as tensions between Iran and Saudi Arabia hit new heights following political tit-for-tat attacks, the severing of diplomatic relations and Iran’s landmark nuclear deal with the P5+1 countries. The two are being accused of backing regional armed groups as proxies, particularly in the unrelenting violence in Syria and Yemen. The report writes that escalating conflict through proxy forces "could increase the risk of disruption to business operations and supply chains in the MENA [Middle East and north Africa] region". This coupled with the growing international threat posed by the Islamic State is cited among the foremost geopolitical risk multipliers for the coming year, according to the report.