How countries with political and civil unrest in 2017 handle their issues, and in what manner, while likely be a factor in how some of your investments play out over the course of the next year and beyond, so it’s important to know what’s happening. The world saw a large number of political and social surprises in 2016, with totally unexpected events becoming reality. “Brexit” was the biggest jolt that struck the capital markets, as every pundit and political analyst had predicted that the status quo would hold. The election of Donald Trump was another huge political surprise, as almost all polls had predicted a Clinton win going into the U.S Presidential elections. The growing trend of globalization and inequality is facing a huge backlash in some developed countries, where the citizens are reacting by voting against more of the same.
In other regions, the Middle East continued to be wracked by terrorism and war, as failed states have become a hotbed of chaos and Islamic terrorism. The Islamic State (IS) continued to pose a threat to civilized states despite facing a military onslaught on its main Syrian and Iraqi bases. Syria, Libya, Afghanistan and Iraq saw no signs of peace, while Yemen has become devastated by a war between Saudi-led Sunni forces and Houthi-led Shia forces. These are just a few of the countries with political and civil unrest in 2017.
2017 promises to show increased geopolitical chaos with the inauguration of ‘America First’ President Trump. The Trump-led U.S plans to reduce its engagement with the outside world and let its allies bear more of the military burden in the Middle East and elsewhere. The foreign politics of the world’s biggest power is also uncertain, as Trump has threatened to upturn all major long standing policies of the country, including trade agreements like its longstanding North American Free Trade Agreement with Canada and Mexico, two of its biggest trading partners.
Elsewhere, China is looking to increase its dominance over Asia, bringing it into conflict with other Asian powers like India, Vietnam and Japan. The Middle East will see even more rising tensions between Iran and Saudi Arabia, while Erdogan-led Turkey increasingly becomes more of a dictatorship rather than a democracy. Europe continues to face a long-drawn debt crisis and is also facing the problem of millions of refugees pouring in from the failed or war-torn states in Africa and Asia. Latin America remains more or less stable, though Venezuela has descended into economic turmoil thanks to the misguided policies of its present Leftist government. The country has been facing hyperinflation and the general population has been pauperized despite owning the largest deposits of oil in the world. It looks unlikely that Venezuela’s situation will become stable until its present government is booted.
Investors have to be very careful of where they invest, as geopolitics take center stage with large parts of the world in a state of flux. Such countries are not good places to invest, as foreign investments in bonds and equities can quickly turn sour, as was the case with Turkish investments. The Turkish lira has depreciated sharply in the first few days of 2017, as political uncertainty takes a toll on the economy and investor sentiment.
In the article about countries with political and civil unrest in 2017 below, we’ll look at 10 countries that are going to face political and civil unrest in 2017, ranking them basedon the size of their economy. For further reading on areas with a lot of unrest, be sure to also check out our previous feature story on the 25 Most Dangerous Cities in the World to Visit.
10. Yemen
Yemen has been wracked by a civil conflict since a political crisis erupted in 2011. The Houthis and Saudi-led alliances are fighting to gain ascendancy in the country. This poor country in the Middle East has seen most of its cities almost completely destroyed by the fighting between the rival forces. While the United Nations has tried to intervene to stop the humanitarian disaster that has unfolded in the country, the fighting continues nonstop.
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9. Afghanistan
We are continuing our list of countries with political and civil unrest in 2017 with the Afghanistan, yet another country that has been living under a long period of civil war amongst its multiple tribes and factions. Bush’s infamous ‘War On Terror’ managed to unseat the Taliban government, but the new democratically-elected government in Kabul does not have too much power. The Taliban has again gained control, and with the U.S pulling out, one can again expect renewed fighting between the various powers.
8. Libya
The oil rich country situated in the northern part of Africa has been in turmoil ever since ruler Muammar Gaddafi was killed in the civil war in 2011, with the rebels being supported by NATO. The country remains highly unstable, with the rival political bodies claiming to be the legitimate government. Large parts of the country are under the effective control of local militias and tribes. Though the United Nations is trying to bring the rival parties together, the rise of the Islamic State promises that 2017 will see more turmoil.
The Democratic Republic of Congo is another country that has been affected by a series of civil wars for a long time. Though rich in mineral resources, the country has not seen political stability for over 20 years following the end of Mobutu Sese Seko’s 32-year reign. The country has seen its internal conflicts exacerbated by interference from foreign countries such as Uganda and Rwanda. The country has seen renewed protests against current President Kabila, who has refused to stand down after the end of his democratically-led term. With elections being delayed, opposition is going to increase going into 2017.
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6. Syria
Syria is undoubtedly the most troubled country in the world right now, as the civil war in the country has ravaged its citizens for more than five years. No wonder it’s on our list of countries with political and civil unrest in 2017. Various factions backed by different governments continue to battle it out in the devastated country. While the Bashar-led government backed by Iran and Russia has gained supremacy in recent times, it lacks control of vast swathes of the country, which are held by different forces such as the IS, Kurds and Al Nusra factions.
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5. Iraq
Iraq’s political and economic systems have been in a state of flux ever since the invasion by the U.S-led alliance and the disposal of the Saddam regime. The country’s long suppressed hostilities between the majority Shias and Sunnis have come out in the open and led to a fertile ground for the growth of terror outfits like Al-Qaeda and Islamic State. The country’s democratic leadership remains weak and ineffectual, as IS has captured large regions of the country. The Kurds in the north have also become almost completely autonomous and a fractured Iraq remains a country largely in name only.
The number 4 on our list of countries with political and civil unrest in 2017, Pakistan, continues to one of the countries hardest hit by terrorism. The country has a large number of homegrown terrorist groups which periodically make devastating attacks on the country’s civilian and military infrastructure. Continued hostility with India has also drained the country’s coffers over the years, while Afghanistan is also a huge problem in the north. The country’s political leadership has been hobbled by corruption charges and remains subservient to its powerful military, which calls the shots. It also faces secessionist forces in provinces like Kashmir and Baluchistan.
The Global X MSCI Pakistan ETF (NYSEARCA:PAK) provides exposure to Pakistani stocks, however its liquidity remains low, with a market value of just $6.5 million. Though the returns have been spectacular, with a 41% return over the last year, the volatility of Pakistan’s politics makes it a highly speculative investment.
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3. Egypt
Egypt is another African country on our list of countries with political and civil unrest in 2017 that faces heightened political and economic uncertainty, with its military rulers being unpopular among large sections of the population. The Muslim Brotherhood has been attacking the government after most of its leaders were jailed and killed by the military under the rule of current President General Abdel Fattah el-Sisi. The country’s economic situation is fragile, as it depends on aid from Saudi Arabia and other rich Arab states. Its Sinai region regularly sees terrorist attacks, which has affected its tourism industry.
Market Vectors Egypt Index ETF (NYSEARCA:EGPT) invests in publicly traded companies that are domiciled and primarily listed on an exchange in Egypt, or that generate at least 50% of their revenue in Egypt. This Egypt-focused ETF has lost one-fourth of its value over the last year and remains a high-risk investment.
One of the world’s richest countries has become one of the countries with political and civil unrest in 2017 as well. It has become an unstable region in recent years with the increased unrest in the Middle East. The new king and his crown prince have shown an aggressive streak in both domestic and foreign affairs by directly and indirectly fighting wars and conflicts in Yemen, Syria and Libya. The economy is also not doing well due to the decreased price of oil, while the Shia minority is also showing signs of agitation. Its closest ally, the U.S, has also become distant, as it no longer relies on Saudi oil given the shale gas revolution. The recent nuclear deal between the U.S and Iran has made the geopolitical situation even more difficult for Saudi Arabia’s rulers.
The iShares MSCI Saudi Arabia Capped ETF (NYSEARCA:KSA) provides access to a basket of locally-listed Saudi stocks and tracks the MSCI Saudi Arabia IMI 25/50 Index. Though the ETF has given a decent return of 12% in the last year, it remains a doubtful investment in 2017.
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1. Turkey
Turkey ranks number one in our list of 10 countries with political and civil unrest in 2017. Though Turkey was considered one of the most politically and economically advanced Muslim countries, its situation has deteriorated in the recent past. President Erdogan has started to increasingly show dictatorial tendencies and has purged the opposition after a failed coup in 2016. The war in Syria has negatively affected the country, with millions of refugees crossing the border, while fighting with the Kurds has surged after a crackdown by Turkish forces. The instability has been further heightened by repeated Islamic State attacks on the country, which included a major terrorist attack on Istanbul’s airport.
The iShares MSCI Turky Invstbl Mrkt Indx Fnd (NYSEARCA:TUR), which is an ETF replicating the performance of the MSCI Turkey Investable Market Index, has underperformed the broader market over the last year, falling by 4%. With the continued economic issues, this ETF is probably best avoided by investors in 2017 as well.
