Asia Risk Assessment 2017

Every January, SVA (Steve Vickers and Associates), a company that specializes in political & corporate risk consultancy, releases a risk assessment report on the Asia Pacific Region. Steve Vickers, the CEO of the Hong Kong-based consultancy company, has a hard-earned reputation for being one of the keenest observers of political and economic developments in the region.  Below is a short summary of Vicker’s report on the Asia Pacific region’s key risks in 2017, “many of which present challenges to investors and existing market participants.”  China: A tightening political climate, a rising PRC economic nationalism, and a tauter international environment all pose challenges for China in 2017, suggesting that risks for investors could rise markedly. Hong Kong: The political contest in Hong Kong shows no sign of resolution with governmental stasis, more protests, and weakening rule of law, which pose moderate risks to investors in 2017. Macau: Macau can look forward to relative political stability and a reviving economy in 2017, although Beijing’s current preoccupation with curtailing capital outflows, rising economic nationalism and the outside chance of a terrorist attack on a casino still pose threats. Taiwan: An ailing economy and heightened tensions with China present a test for Taiwan’s government in 2017. Japan: Prime Minister Shinzo Abe’s dominance promises political stability, but the government’s failure to reignite economic growth and growing tensions with China mean risks will rise in 2017. South Korea: A political crisis, weakening economy and the rising North Korean nuclear threat pose significant threats to Seoul and suggest that risk levels will rise notably in 2017. The Philippines: The “hard ball” politics of President Rodrigo Duterte may provoke a military coup or an attempted assassination, and longstanding concerns about instability in the south pose major uncertainties for the Philippines in 2017. Myanmar: The country faces a year of missed expectations, as Aung San Suu Kyi’s weakness and her Burman nationalistic tendencies prevent her government from meeting its commitments, meaning that people’s frustrations may rise in 2017. Malaysia: An ongoing corruption scandal will probably not unseat Malaysian Prime Minister Najib Razak, but his survival will come at the price of a rise in nativist politics, and of eroding confidence in an ailing economy. Thailand: The death of King Bhumipol has raised questions about Thailand’s long term political stability that may distract from challenges to the economy and from terrorism in 2017. Indonesia: The growth of nasty, identity-based politics, an economy facing headwinds and a more complex security environment herald the end of a period of relative stability in Indonesia and thus represent a threat to foreign investment. India: A broadly stable political climate means that the biggest risks to India in 2017 stem from a botched currency reform and rising tensions with Pakistan that heighten the threat of terrorist attacks or even conflict. For more information about SVA or the report:  www.stevevickersassociates.com