Philippe Dauba-Pantanacce, the senior economist at Standard Chartered, suggests that political risk has become a dominant market driver as it spreads across multiple geographical and political contexts.
- “Whereas political risk was traditionally confined mostly to frontier- or emerging-market analysis, it is now a factor in assessing all types of markets, including developed ones. This phenomenon has been evident since the GFC and has gained further momentum in recent years.
- Political risk, which often has economic repercussions, manifests itself in various forms; popular protests are one of the most common. This year’s Hong Kong protests are emblematic of the increasing power and impact of protest movements across the globe – they took many by surprise and have led to policy change, economic repercussions, and market volatility.
- Protests have increased in frequency and power in recent years, bringing about regime change (for example, Tunisia in 2011) or economic policy changes (France’s ‘yellow vests’ in 2018-19); in the case of Syria in 2011-12, they presaged armed conflict.”