Political Instability Index from EUI

Using March report  about  the global economic distress, Political Instability Index, from Economist Intelligence Unit (EUI) we find Moldova in the High Level Risk of the political instability.

Political Instability Index: Vulnerability to social and political unrest

The overall index on a scale of 0 (no vulnerability) to 10 (highest vulnerability) has two component indexesóan index of underlying vulnerability and an economic distress index.

Underlying vulnerability indicators are: inequality; state history; corruption; ethnic fragmentation; trust in institutions; status of minorities; history of political instability; proclivity to labour unrest; level of social provision; a country’s neighbourhood; regime type (full democracy, ìflawedî democracy, hybrid or authoritarian); and the interaction of regime type with political factionalism.
Economic distress indicators are: growth in incomes; unemployment; and level of income per head.

The Highest rate risk is in Zimbabwe and Chad and the lowest in Denmark and Norway.

Rank Country        Index score

1  Zimbabwe   –  8.8
2  Chad              –  8.5

16  Ukraine   – 7.6

19  Guinea  – 7.5

19  Kenya  7.5
19  Moldova  7.5
19  Senegal  7.5
19  Nepal  7.5
19  Niger  7.5

32  Sierra Leone  7.2
33  Kyrgyz Republic  7.1

38  South Africa  7

46  Burkina Faso  6.9

55  Estonia  6.7
55  Latvia  6.7

63  Uganda  6.5

65  Russia  6.5
66  Romania  6.4

72  Georgia  6.3

74  Albania  6.2

86  Bulgaria  6

98  Israel  5.5

109  France  5.3

109  USA  5.3

150  Germany  3.8
150  Japan  3.8

153  Czech Rep  3.7
160  Switzerland  3.4
161  Finland  3.2
161  Sweden  3.2

163  Canada  2.8
164  Denmark  2.2
165  Norway  1.2

If you do not know where Moldova is, after you see those ranks you can have impression that Moldova is somewhere on Africa continent with 7.5 score of 10, on the 19 rank country of the 165. Also Ukraine is next to the Moldova through these african countries.

Popular anger around the world is growing as a result of rising unemployment, pay cuts and freezes, bail-outs for banks, and falls in house prices and the value of savings and pension funds.The global economic crisis is already having a severe social impact in many countries, primarily in the form of rising unemployment. Many emerging markets are especially exposed as the crisis increases the number of people in poverty and reduces the size of the middle class. As people lose confidence in the ability of governments to restore stability, protests look increasingly likely. A spate of incidents in recent months shows that the global economic downturn is already having political repercussions. This is being seen as a harbinger of worse to come. There is growing concern about a possible global pandemic of unrest.

Of the 165 countries covered by the index, 95 are in the very high risk or high risk group, with 27 in the former and 68 in the latter. For 53 countries, the risk of instability is rated as moderate which is by no means a clean bill of health and only 17 countries, almost all highly developed states, are rated as low risk.
Because of the sharp increase in economic distress, the situation has changed fundamentally compared with the recent past. In 2007, according to the model, only 35 states (just over one-third of the current number) were rated as being at very high or high risk of instability.
There are three east European countries among the 27 that that are at very  high risk: Ukraine, Moldova, and Bosnia and Hercegovina. Their inclusion in the very high risk cluster is unsurprising. Another 18 countries are in the high risk group all the Balkans (apart from Bosnia, which is very high risk), the Baltic states and several other Commonwealth of Independent States (CIS) countries. Only seven countries from the region are in the moderate or low risk groups. Many countries in eastern Europe have characteristics that are associated with vulnerability to political upheaval: new and inexperienced states and bureaucracies; a history of unrest; regimes that are neither full democracies nor autocracies the most prone to unrest; very high levels of popular dissatisfaction; and low levels of trust in political institutions. Some suffer from ethnic fragmentation (this feature does not, of course, make unrest certain, but indicates a proclivity especially if accompanied by other factors) and discrimination against minorities; and factional politics (one of the main predictors of unrest according to the political science literature).

And just about all countries in the region have been hit hard by the economic crisis. Unemployment is rising in many countries that already have chronically high levels and most countries in the region are likely to experience a reduction in some cases, severe in GDP per head this year. Ukraine is rated as most at risk in the region. The country has been hit extremely hard by the crisis. Its real GDP is set to plummet by more than 10% this year. The metal and chemical industries that drive the country’s economy have stalled; unemployment is on the rise. In recent weeks, a variety of groups have come out in protest. The largest was a crowd of 10,000 demonstrating against the Kiev local authorities. A recent survey revealed that 41% of  Ukrainians are ready to go to the streets.

In the CIS, Tajikistan and the Kyrgyz Republic are under serious threat. The sharp fall in remittances is causing severe economic distress in Tajikistan. Such funds account for almost one-half of the country’s income. The president, Emomali Rakhmon, may be facing his greatest challenge since the civil war of  1992-97.
Russia is experiencing a severe downturn and the country has attributes that characterise high-risk countries (inequality, low public trust in institutions, high corruption and past history of instability). If the crisis intensifies, serious disturbances cannot be ruled out. The growing dissatisfaction with the economy and the government’s response to the crisis does not appear yet tohave affected significantly the popular standing of the prime minister, Vladimir Putin, or the president, Dmitry Medvedev. Given the lack of a credible opposition, it seems doubtful that the rise in social discontent could threaten the leadership Boris Yeltsin managed to survive politically through the crisis in
1998 despite a much weaker position. The liberal opposition in Russia is in disarray and the Communists are a declining force.
Fiscal stimulus options are not possible in most east European countries, as many are struggling with huge funding needs owing to large current-account deficits and, in some, large budget deficits. Those with imbalances and IMF
programmes are having to engage in fiscal austerity. This is certainly not popular in these countries. The recent violent protests that have erupted in Latvia and Lithuania were against the governmentsí austerity measures that included tax hikes, cuts in wages and curbs on social spending.  Romania and Hungary could be flashpoints for political destabilisation. The deteriorating economic situation and rising unemployment raise the spectre of social unrest in Romania. Romania, whose break with communism was the most violent in eastern Europe with the exception of the former Yugoslav republics, experienced episodes of violent political upheaval in the 1990s, with outbreaks of inter-ethnic conflict, violent demonstrations in the capital and trade union protests including forceful blockades of roads and railways. Public unrest was most notable during periods of declining economic output in 1990-92 and 1996-99.

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