MENA and Eurozone slide in global rankings, Bahrain slides to 54th

Euromoney Country Risk June results: MENA and Eurozone slide in global rankings
07 June 2011
Andrew Mortimer

Bahrain now ranks 54th in the table, 17 places below its peak. The kingdom, which economists had previously ranked alongside Spain, Saudi Arabia and Malaysia in the table, needed $10 billion of financial support from the Gulf Co-operation Council in March to avert a financial crisis after mass demonstrations in March.

But political unrest in the country is far from over. The lifting of emergency laws on June 1 was immediately followed by clashes between security forces and protesters. King Hamad has called for a national dialogue to begin on July 1, but opposition parties warn that discussions cannot take place without concessions over political reform. “Bahrain remains vulnerable to unrest among the civilian population, and we expect to see more flashpoints during the second half of 2011,” says Said.

The military intervention in Bahrain by Saudi security forces on March 14 also increased tensions between Saudi Arabia (down three places) and Iran (unchanged). Meir Javedanfar, founder of the Middle East Economic and Political Analysis Company (MEEPAS), says: “The entry of Saudi armed forces into Bahrain has opened a new phase in the cold war between Saudi Arabia and Iran, and has intensified the conflict between the two. The repercussions will be felt in the region for years to come.”

Egypt falls by one place to 96th in the overall table, a cumulative fall of 24 places since January. Egypt now has a lower survey score than Lebanon, Nigeria and Venezuela. The results could indicate a potential overcorrection by economists. CDS spreads on 5-year sovereign debt have been on a downward trend since May, while the country remains relatively stable. The Supreme Military Council has demonstrated a willingness to co-operate with secular opposition movements. The IMF’s decision to grant a $3 billion standby credit facility is a further boost to the beleaguered country.

Said points out that “significant political developments have occurred [in Egypt]: the creation of new political parties, the constitutional referendum vote, dissolving the National Democratic Party and announcements by key figures of their plans to run for the presidential election – most notably Mohamed El Baradei and Amr Moussa”.

But she warns: “The transition will be messy if things continue at their current pace, with dire economic repercussions that could further hamper the transition phase.” …see full article charts