A significant increase in conflict, terrorism and regime instability in the Middle East and North Africa, along with deepened global political violence and resource nationalism, are the main risks mining investors will face in 2014, according to a report published Thursday by UK-based risk consultancy Maplecroft.
In its sixth annual Political Risk Atlas (PRA) the analysts tell investors to pay special attention to possible populist moves in Indonesia, Brazil, India and South Africa as national elections in these countries will likely boost resource nationalist rhetoric and policies.
According to Maplecroft close to 10% of the countries studied have shown a significant increase in their risks levels, with foreign investors facing more political violence, resource nationalism and expropriations.
In the last year alone, says the report, the risk of resource nationalism has increased 15% as a consequence of governments attempts to offset the risk of societal unrest through tax increases, tougher regulations or outright expropriation.
Asia and Africa in the hot seat
Maplecroft’s Political Risk Atlas 2014 also reveals that social unrest is likely to increase in politically unstable nations, such as Bangladesh, Belarus, China, Kazakhstan, Saudi Arabia and Vietnam.
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