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Marsh Political Risk Map 2017 INSIGHTS Leadership Changes 2017 Leadership Changes Threaten Political and Economic POLITICAL RISK Stability in 2017 MAP 2017 With possible leadership changes in more than 20 countries EVENTUAL RUSSIAN this year, the stability of many regions is in question. SUCCESSION WILL DETERMINE Potential leadership changes pose SAUDI ARABIA significant threats to political EURASIA’S FATE and economic stability. In many AND IRAN LEAD countries, there is great uncertainty SUCCESSION RISKS Events in Crimea during March about who will succeed ageing 2014 have raised fears of Russian rulers who have held power for IN THE MIDDLE EAST President Vladimir Putin’s decades and where there is no clear authoritarian ambitions for the framework to transfer the reins of Geopolitically, Saudi Arabia region. The eventual succession government. When power has been and Iran are the most assertive of Putin, 64, is likely to be one concentrated in a few hands for a countries in their region, driving of the most important in the long period of time, there can be a polarisation between Sunni and region, but is also likely to be high risk of instability following a Shi’a Muslims. The next generation much farther off than many of leader’s replacement. The incoming of Saudi and Iranian leaders will the succession risks detailed in head of state may lack the authority, determine whether their countries this report. Putin has been in experience, and political support continue down current paths, with power since 1999 and remains that are critical to a smooth Saudi Arabia’s policies shaped by a popular throughout the country, transition. Wahhabi version of Islam, and Iran despite economic challenges from following a radical version of an Western sanctions and low oil In several regions, succession Shi’a Islamic republic. Oman is also prices. risks pose significant concerns, important to this regional dynamic, particularly when combined with having traditionally acted as an Meanwhile, leaders in both the major elections slated for 2017, interlocutor between the two rival Kazakhstan and Uzbekistan populism and nationalism gaining countries and helping to maintain have thus far resisted naming traction on a global scale, and a balance of power. successors, which could create protectionist measures impacting a power vacuum in the future. trade and economic growth. Over the coming decade, investors will be watching closely for signs of unstable transitions in these countries, which not only have vast hydrocarbon resources, but also face the threat of Islamist militancy from Afghanistan, while in the midst of a wider geopolitical struggle between Russia, China, and the West. 1 INSIGHTS Leadership Changes 2017 FIGURE 1 GLOBAL SUCCESSION RISKS UZBEKISTAN Leadership in transition KAZAKHSTAN CUBA President President Raúl Castro Nursultan Nazarbayev (Age 85) (Age 76) IRAN Supreme Leader Ayatollah Ali Khamenei THAILAND (Age 77) Leadership in transition CAMEROON President Paul Biya SAUDI ARABIA (Age 84) Salman bin Abdulaziz Al Saud (Age 81) OMAN Sultan Qaboos bin Said al-Said EQUATORIAL GUINEA (Age 76) President Teodoro Obiang Nguema Mbasogo (Age 74) ZIMBABWE ANGOLA President Robert Mugabe President José Eduardo dos Santos (Age 93) (Age 74) COUNTRIES TO Country Risk Score 2017 WATCH Source: BMI Research Marsh has identified 11 countries with geopolitical or economic importance (for example, being home to major oil and gas reserves) that have significant succession risks. These risks have considerable potential AFRICA CAMEROON for long-term economic transformation that could ANGOLA COUNTRY RISK SCORE OUT OF 100: impact international businesses and investors. Stakeholders COUNTRY RISK SCORE OUT OF 100: (UNSTABLE) active in these countries should 45.8 understand potential succession (UNSTABLE) While it is uncertain whether dilemmas in order to be prepared 42.9 succession risks will impact the to respond to a variety of political Succession risks could emerge in country this year, the key long- risk scenarios that could affect Angola in the second half of 2017. The term risk in Cameroon is posed by their interests. country will hold elections in August, an inevitable political transition following the eventual end of This article draws on data and with long-serving President Eduardo President Paul Biya’s decades-long insight from BMI Research, a dos Santos reported to be stepping rule. Biya has ruled the country leading source of independent down before the election takes place. since 1982 and is 84 years old. His political, macroeconomic, The president, who has been in rule is considered by supporters to financial, and industry risk power since 1979, has backed defence be a stabilising force in the country analysis. minister João Lourenco, who is likely to emerge as his successor. However, and a safeguard against the threat of there is a possibility that frustrations Boko Haram. There is considerable with the long-held political status uncertainty around who will succeed quo in Angola could increase the risk him, should he suddenly depart of public protests, raising questions from office. around a smooth transition. The 2017 elections are likely to be a key test of Angola’s commitment to democratisation. 2 INSIGHTS Leadership Changes 2017 EQUATORIAL GUINEA LATIN AMERICA OMAN COUNTRY RISK SCORE OUT OF 100: AND CARIBBEAN COUNTRY RISK SCORE OUT OF 100: CUBA (MODERATE (UNSTABLE) STABILITY) 38.1 COUNTRY RISK SCORE OUT OF 100: 62.0 Underlying tensions in Equatorial As with most other regimes in the Guinea could be exacerbated should (MODERATE Gulf, Oman’s authoritarian political 74-year-old President Teodoro 51.3 INSTABILITY) system raises long-term political Obiang Nguema Mbasogo depart risks. The Omani succession is of suddenly from office. Obiang has Cuba faces rising uncertainty over the tremendous importance to the region, ruled the country for the past 37 years next few years, stemming from the as Sultan Qaboos bin Said al-Said has with an authoritarian stance. impending retirement of President been a key interlocutor between Iran During this time, Obiang has been Raul Castro in early 2018. Castro and and its rivals and has helped maintain criticised for a poor record in his elder brother Fidel (who died in a balance of power during his rule. protecting human rights, and there 2016 after stepping down in 2008) He currently retains a strong degree has been little evidence that he has have ruled Cuba since the revolution of public support and can shore made progress in promoting and of 1959, meaning that a major era is up his popularity with large social advancing democratic processes coming to an end. However, there is benefits; however demands for more within the country. According to unlikely to be a significant shift in widespread political reform are likely BMI, there is a strong risk that Cuba’s one-party communist system, to emerge at some point. The Sultan is underlying tensions could escalate as Castro’s designated successor, 76 years old, and the absence of a clear into violence if Obiang were to resign First Vice-President Miguel Diaz- successor increases the potential for or pass away. Power may pass to one Canel, is committed to the status a future leadership vacuum. Oman’s of Obiang’s sons, but differences in quo. Nevertheless, the post-Castro next ruler will also need to maintain their respective support could lead era could see ideological divisions the careful geopolitical balancing act to factions forming. emerge, and rising calls for reform between fellow Gulf Arab states, Iran, from the population. and the US. ZIMBABWE MIDDLE EAST SAUDI ARABIA COUNTRY RISK SCORE OUT OF 100: IRAN COUNTRY RISK SCORE OUT OF 100: 31.3 (UNSTABLE) COUNTRY RISK SCORE OUT OF 100: (MODERATE STABILITY) According to BMI, Zimbabwe’s 61.6 short-and long-term Political Risk 49.4 (UNSTABLE) Changes to the succession order Index scores continue to be heavily in 2015 and possible future power weighed down by uncertainty over Iran’s geopolitical and economic struggles are driving political risks who will succeed ageing President fortunes have improved following the in Saudi Arabia. King Abdullah bin Robert Mugabe (93), and whether removal of most sanctions in January Abdulaziz died at age 90 in January that individual will be able to 2016, which will benefit President 2015. Following his death, his consolidate power within the Rouhani ahead of May 2017 elections. brother, Salman bin Abdulaziz Al country. The succession of President Nonetheless, there is uncertainty Saud, took over and Mugabe risks turning violent if plans over whether Rouhani will win a has ruled for the past two years. are not put in place and set in motion second term in office. Over the long In 2016 the regime unveiled prior to his departure, as competing term, a power struggle could emerge its ambitious Vision 2030 vested interests would struggle to when Supreme Leader Ayatollah Ali transformation plan to wean the fill the power vacuum left in his Khamenei, age 77, eventually passes country off its overreliance on wake. Mugabe has been in power in away, or if anti-regime protests gain oil and the public sector, which the country since its independence renewed momentum if the leadership will have major socio-economic in 1980, first as prime minister, continues to suppress socio-economic repercussions over the coming before becoming president in 1987. freedoms. Iran’s next supreme leader decade, considerably heightening He has said that he plans to stand will determine whether the country political risk in the Kingdom. Over for re-election in the country’s next liberalises its agenda, but he is likely to the short term, the regime will elections in 2018. be a hardliner. contain dissatisfaction by scaling back, modifying, or cancelling some 3 INSIGHTS Leadership Changes 2017 reforms if they trigger too much THAILAND POLITICAL RISK MAP 2017 instability. Over the longer term, the coming generation shift in the COUNTRY RISK SCORE OUT OF 100: Marsh’s Political Risk Map 2017 leadership could trigger a major presents a global view of issues power struggle in the al-Saud family, (MODERATE facing multinational organisations STABILITY) between Crown Prince Mohammed 64.8 and investors.
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