Military Tensions and Government Stability Mark a Year of Risk

  • Verisk Maplecroft report sees military scuffles, but no war
  • Government stability at risk in Middle East, less so in Europe

If 2016 was packed with surprises, 2017 carries just as much political risk. The difference, according to a new report by Verisk Maplecroft, is that governments will be able to weather populist storms and any military flareups will likely fizzle.

Here’s a breakdown of the consultancy’s analysis: looking at likely conflicts among major powers, government stability and threat of terrorism.

Interstate Tensions: Military Disputes Likely, But Not War

Verisk Maplecroft assigns at least a 90 percent chance of military scuffles between a variety of heavily-armed powers in 2017 -- including India and Pakistan over the disputed region of Kashmir, and the U.S. and Iran in the oil-rich Persian Gulf. But they will ultimately step back from the brink of war. 

The company uses a machine learning-assisted model that analyzes over 22,000 observations such as military spending and categorized news events to measure the probability of interstate tensions escalating.

These are the likeliest confrontations.

“While militarized disputes have the potential to bubble over into something bigger, the overwhelming majority of clashes quickly simmer down,” said Guy Bailey, head of analytics at Verisk Maplecroft.

Government Stability: Risks Abound, But Europe’s Safest

Europe faces a series of elections that may see establishment figures swept away. Yet Verisk Maplecroft’s analysis shows that Germany and France, where anti-immigration parties have gained ground, stand a good chance of withstanding the populist threat. The Greek crisis meanwhile may flare up again and the messy process of quitting the European Union puts the U.K. on par with Poland, according to its government stability index.

The most vulnerable governments are clustered in the developing world: including Iran and Saudi Arabia in the Middle East, Mauritania and Botswana in Africa, the Philippines and Pakistan in Asia, plus Ecuador and Panama in Latin America.

These findings are based on a probabilistic model that evaluates the stability of the executive branch in three years’ time, relating to, among other factors, any lack of popular legitimacy or the robustness of mechanisms for the transfer of power.

Terrorism Risk: Threat Is Real, But West Is Well Protected

On the security front, the threat of terrorism in Western countries like France and the U.K. will continue to loom large this year, according to the firm’s analysis of recent historical attacks as well as the danger posed by active terrorist groups. But some of that risk is offset by their strong counter-terrorism capabilities.

The most vulnerable country is Turkey, because it is on the front lines of the fight against the so-called Islamic State, faces a more direct threat and has fewer defensive resources.

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