MENA fragments along conflict lines – ECR Q2 2013 results


Jeremy Weltman
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Ten of the region’s 18 countries have suffered from score declines since December, led by Egypt and other unstable polities.

Developments in risk scores across the Middle East and North African region have displayed a broadly familiar trend this year, demonstrating once again the disparity between the conflict-riven countries undergoing political upheaval, including Egypt (Egypt’s enormous funding requirements – time-bomb waiting to explode) and the richer, more stable oil and gas producers that have remained largely immune to the various developing crises.

Bahrain, still affected by background social unrest and a fiscal deficit, is a marked exception among the Gulf states. Qatar, while also seeing its score dip since December, has stabilized this quarter and is still the region’s safest sovereign at 18th on the global rankings, some 37 places above Bahrain.

Of the eight countries registering higher scores since December, Morocco’s fortunes are notable, partly because of small upward adjustments to its scores for government payment/repatriation and three of the four structural indicators.

However, as is also the case with higher-risk Jordan and Lebanon, the improvement is mostly a function of better financing conditions (easier capital access) than any other feature.

Indeed, Jordan and Lebanon have seen their various political and economic indicators otherwise deteriorate due to domestic political and economic problems, in part linked to the wider regional crisis involving Syria.

Morocco has also seen political problems emerge lately.

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