The risks to businesses in the Middle East and North Africa
The risk consultancy Maplecroft has updated their Middle East and North Africa (MENA) risk analysis, and, not surprisingly, it seems that massive upheavel and government suppression efforts make for a less-than-ideal business climate. They also single out food prices as a key cause of ongoing instability:
The susceptibility of MENA countries to food price hikes will continue to act as a trigger for social unrest and pose risks to businesses. Countries in the MENA region are particularly at risk from high global food prices and this has been the cause of much social unrest since prices began to climb at the end of 2010. Countries such as Algeria, Jordan and Egypt have been acutely affected by the sharp rise in food prices and this in turn causes disruptions which can affect the operational running of businesses. The need for the government to placate protesters through increasing subsidies for foodstuffs and oil based products such as petrol means that there is less money to spend on other areas of pressing need such as infrastructure. The importance of food subsidies can be seen in how the ruler of Kuwait, Emir Sheikh Sabah al-Ahmad al-Sabah, has promised the distribution of US$4bn and free food for 14 months to all citizens despite not facing any direct threats to his rule.
(AP Photo)
