Bangladesh and other emerging markets risk social unrest

Black_cats · May 11, 2022

Bangladesh and other emerging markets risk social unrest

Food import, energy security-related instabilities identified, a risk consultancy report claims

Syed Zakir Hossain/Dhaka Tribune
Tribune Desk
May 11, 2022 4:51 AM

Developing middle-income countries such as Bangladesh, Pakistan and other emerging markets have been identified as plausible candidates for social unrest, according to a report by a risk consultancy said.

Three quarters of nations expected to be at high-risk or extreme risk of civil unrest by the fourth quarter of 2022 were middle-income countries, as defined by the World Bank, Verisk Maplecroft said in an update to its political risk monitor.

Unlike low-income countries, they were rich enough to offer social protection during the pandemic, but now struggle to maintain high social spending that is vital to the living standards of large sections of their populations, reports Reuters.

Bangladesh was identified to be at "extreme risk" regarding energy security, and "high risk" in terms of food import security, the report found..
However, the country was also tagged as one where subsidies were not an issue, unlike Pakistan, Egypt, Brazil and Argentina, where subsidy cuts and/or proposed cuts were currently driving unrest.

Argentina, Tunisia, Pakistan and Philippines were also among the countries to watch in the next six months, the authors said, pointing to their high dependency on food and energy imports.

Russia’s war in Ukraine has accelerated a rise in food prices, which hit an all-time record in February and again in March. Energy prices also rose sharply.

“With no resolution of the conflict in sight, the global cost of living crisis will continue deep into 2023,” the report said.

Lebanon, Senegal, Kenya and Bangladesh face similar pressures.

The report pointed to Sri Lanka and Kazakhstan as examples of middle income countries that have already suffered unrest this year. The former saw rising food and fuel prices contribute to escalating tensions, while an attempt to cut fuel subsidies sparked protests in Kazakhstan.

Civil unrest could hamper a potential economic recovery but also deter investors focused on environmental, social and governance (ESG) factors, it said.

“Some countries risk falling into a vicious cycle, whereby worsening governance and social indicators make them ESG investment pariahs, impeding the inflows needed to improve economic performance and address societal needs.”

The report found that more than 50% of the almost 200 countries covered by the index have experienced an increase in civil unrest since the Covid-19 pandemic hit.