The investment environment in the Middle East and north Africa is deteriorating, according to investors and insurers.

While many investors involved in the region have put on brave faces, claiming that everything is fine and that the revolutions taking place in various countries will eventually be beneficial for foreign investors, the list of investors voicing their worries is growing.

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Adrian Lewers, head of political risk and contingency at insurance firm Beazley, calls the political risk threat level for Libya, Bahrain, Yemen and Syria “severe” and Saudi Arabia “elevated”. The firm's outlook for all of these countries is negative.

Mr Lewers said: “In most of these countries, the status quo is fundamentally unstable, but no convincing blueprint for a smooth transition to a new stability exists. The most likely outcomes will be protracted stalemates or regimes limping from crisis to crisis.” 

He also warned there was a high risk of contagion, with conflicts spreading to other potential hot spots, such as China, Russia, Vietnam, Venezuela and Uganda.