THE BLOG
01/07/2015 07:27 pm ET Updated Mar 09, 2015

Political Risk in Countries Around the World in First Quarter 2015

Global issues like terrorism, the economy, climate change and Middle East turmoil will sadly burden us this quarter and all year. These are factors that may hinder stability in the international system - that's global political risk in a nutshell. But what can we expect of domestic political risk in the first quarter of 2015? Here are a few countries (not all, of course) that may be more prone to instability over the next few months in different parts of the world (note these are countries with controversial elections, recessions or protest movements):

In Asia, Sri Lanka is the country to watch for political risk this quarter. The January 8 election in Sri Lanka could mean a third term for President Mahinda Rajapaksa - yes, a third term in a democratic country. But it's not a certainty. Let's not forget Rajapaksa's international and domestic legitimacy has been weakened in the past few years; he's been repeatedly accused of being authoritarian, particularly in terms of his perceived exclusion of religious minorities from a Sinhalese and Buddhist-dominated state (and alleged intimidation of Tamil voters more recently). If he wins, expect more protests and bursts of violence. On the other hand, if he loses to his former ally Mithripala Sirisena, pro-Rajapaksa and pro-Sirisena supporters will likely clash, as we've seen in recent weeks. So, whoever wins, expect some form of unrest surrounding the election results.

In Thailand, the military took over last May due to chronic political crises - the 12th coup since 1932. But we're still waiting for the election that was promised and the economy is stagnating. Expect a few bursts of Hunger Games-inspired anti-coup protests, especially now that the military junta has postponed elections to 2016 and publicly warned supporters of former prime minister Yingluck Shinawatra not to protest her upcoming impeachment. Similarly, in Hong Kong, the government's recent warning to citizens to not restart pro-democracy protests should ignite some kind of reaction. Worth noting that this warning came at the same time as the release of a government report reasserting election plans according to China's rules and news that the police would soon arrest more than 30 organizers from the late 2014 protests.

In Africa, Nigeria is the country to watch this quarter. The February 14 election could see President Goodluck Jonathan re-elected for a second and final term. That would obviously be a boon for him as he solidifies his position in the country, but his reappointment would also be a key source of instability for Nigeria. Expect existing sectarian tensions to bubble up as Jonathan, a Christian, faces off once again against former military general Muhammad Buhari, a Muslim. There is also concern already about electoral fraud that will lead to more violence. Throw Boko Haram into the mix, the Islamist extremist group which has spread even deeper into Nigeria (including seizing an army base in the town of Baga) and neighbouring countries like Cameroon, and a surge in instability in the coming months becomes a certainty.

In Europe, Greece is the country to watch this quarter. Yes, the austerity protests will persist but so too will the debt crisis in a sense. The winner of the January 25 election, potentially Alexis Tsipras of the opposition Syriza party, will likely restructure the 2012 bailout plan and austerity policies which could lead to more instability. But Germany comes a close second for risk, given the anti-Islam protest movement that brought in the new year, as well as smaller but notable opposition rallies. Yes, German growth may be better than expected in 2015 but the bottom line is that this growing battle of ideologies may hinder stability in the country and potentially could spread deeper into the EU. And as we know, Russia ended 2014 with economists' prediction of the country's first recession since the global financial crisis and protests condemning the fraud conviction of Alexei Navalny, a critic of President Vladimir Putin. Expect more of the same, including rallies against budget cuts in the social sector (e.g. health care protests). Look for the president to tighten control of the internet and social media to suppress any unrest (of course, that's to be expected all year).

Lastly in Latin America, Peru is the country watch this quarter. Younger Peruvians started 2015 protesting a law that reduces unemployment benefits for those aged 18-24 (note that unemployment among this age group is four times higher than those aged 30-65). But President Ollanta Humala has stated his new Youth Employment Law is "good" and will benefit youth. So, expect more youth-led unrest in Peru (the next protest is scheduled for January 15). And in recession-hit Venezuela, citizens violently protested last year against President Nicolas Maduro, which should recur in the next few months as citizens scrutinize his six-year economic plan.