Cost-of-living crisis fuels political turmoil, according to WTW political risk index
July 11 2023 - 5:15AM
Protest intensity in 2022 and the first quarter of 2023 correlate
most strongly with rising energy prices, slower real wage growth,
and the proportion of wages set by collective bargaining. This is
according to the latest Political Risk Index report released by WTW
(NASDAQ: WTW), a leading global advisory, broking, and solutions
company.
The report details that in 2023 intense cost-of-living protests
struck hardest in developed and wealthier emerging markets. Other
findings include:
- Up to three million person-days
were devoted to cost-of-living protests in 122 countries and
territories in 2022
- Protests regarding government
policies on energy are among the most important drivers of
cost-of-living unrest globally
- Protests in richer nations suggest
that the trend toward escalating property damage and business
interruption from social unrest is likely to continue
- Countries where collective
bargaining is common, including many countries in Western Europe,
are likely to be continually impacted by intense and economically
costly protests if inflation remains high
Looking to the year ahead, the report concludes with a set of
risk indices finding Argentina, France, Spain and Italy most
vulnerable to wage protests with analysis suggesting that in 2023
wage protests may become increasingly intense in the emerging
world.
Evan Freely, Global Head of Financial Solutions, WTW, said: “The
international community continues to grapple with the
cost-of-living crises and its wide consequences. This report
indicates that rising prices, particularly in food and energy,
often results in a political cost including more frequent examples
of disruptive civil unrest. The economic climate, particularly
inflation, is also increasing credit exposure for organizations
across the globe.”
Sam Wilkin, Director of Political Risk Analytics, WTW adds, “The
ramifications are associated with turmoil in rich, poor, and
developing countries alike. Globalization has seen businesses grow
their interests and assets further from home and this report will
help Boards identify and manage emerging risk areas.”
The analysis conducted has been drawn from the Armed Conflict
Location & Event Data Project (ACLED) and the Global Protest
Tracker from the Carnegie Endowment for International Peace
(CEIP).
The complete report can be downloaded here.
About WTW
At WTW (NASDAQ: WTW), we provide data-driven, insight-led
solutions in the areas of people, risk and capital. Leveraging the
global view and local expertise of our colleagues serving 140
countries and markets, we help organizations sharpen their
strategy, enhance organizational resilience, motivate their
workforce and maximize performance.
Working shoulder to shoulder with our clients, we uncover
opportunities for sustainable success — and provide perspective
that moves you.
Learn more at wtwco.com.
Media contact
Sarah Booker: +44 7917 722040Sarah.Booker@wtwco.com
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