Vox Populi Risk
A Future Where Aggregate Economic Growth No Longer Guarantees Political Stability
Tina Fordham, Citigroup
Fuelled by widening inequality, perceptions of elite corruption and middle-class anxieties about globalization, protests and volatility in public opinion pose ongoing, fast-moving risks to the business and investment environment. In contrast to previous waves of political risk, which were often concentrated in less developed, lower-income countries, this new Vox Populi risk is increasingly manifesting itself in middle-income emerging market and industrialized countries. While, historically, protests have subsided with the return of economic growth, we are seeing that aggregate economic growth may no longer guarantee political stability. Vox Populi risk threatens to fuel uncertainty and may therefore hold back economic recovery, which would in turn reduce the scope for governments to respond to popular discontent. We need to find creative political solutions to break out of this vicious circle.