Forget Europe: Here Are 14 Countries That Could Rattle The Global Financial Markets This Year

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Financial markets have largely been focused on Europe’s debt crisis, the looming fiscal cliff in the U.S., and the deceleration of the Chinese economy.But there are at least 14 other global geo-political risks that investors need to watch for, according to Nomura’s senior political analyst, Alastair Newton:

  • Argentina / Bolivia: Following the Repsol-YPF nationalization in Argentina and the REE nationalization in Bolivia, there is a real concern that this has set a trend for a wave of similar moves.
  • Burma: “Genuine reform or another false dawn?”
  • Egypt: “The military’s recent actions have brought thousands of protestors onto the streets again, sparking fresh instability.”
  • Korea: The recent behaviour on the part of North Korea shows that the regime hasn’t changed much after the succession of Jong-eun which shows that more friction is likely especially in a year with elections in South Korea.
  • Malaysia: The government is likely to call a general election in 2012 given the budget that was presented to parliament back in October 2011. 
  • Mexico: Enrique Peña Nieto of Mexico’s Institutional Revolutionary Party (PRI) is expected to win the July 1 presidential election. But this is unlikely to secure a majority in Congress and the likelihood of reform is unclear.
  • Pakistan: “Security, domestic politics and the economy are all continuing to deteriorate as the possibility of a terrorist attack in India emanating from Pakistan persists.”
  • Russia: While protests are expected to ease, the underlying public discontent is likely to grow. 
  • South China Sea: There are concerns that tensions over disputed maritime borders could balloon into naval clashes.
  • South Korea: “A narrow parliamentary majority for the ruling Saenuri Party and upcoming presidential elections stand to limit government effectiveness, at least until a new president takes office in February 2013.”
  • Syria: Irrespective of whether Bashar al-Assad and his regime stay in power there is a real risk that continuing violence will have cross-border implications in the region.
  • Thailand: Despite Yingluck Shinawatra’s election win in July 2011 it appears to only be a matter of time before “significant differences erupt again between her party and its supporters, and the country’s elite.”
  • Turkey: “Will fading hopes of EU membership have a negative impact on prospects for further structural reforms?”
  • Venezuela: Political uncertainty is set to be at its highest in over a decade leading up to the country’s presidential election in October.

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