Technology Increasingly A Driver of Emerging Markets Risk: WTW

Source: Willis Towers Watson | Published on December 16, 2021

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The Willis Towers Watson Political Risk Index has been tracking patterns of political instability in the world’s most vulnerable countries for more than a decade. The Index’s most recent edition examines the impact of new technologies, particularly social media, on emerging market politics.

The report emphasizes how social media has increased the effectiveness of activist politics while also empowering social groups that may have previously avoided political activism due to social discrimination or geographical dispersion.

The report was unveiled at a client webinar, where presenters compared the effects of new technologies in different parts of the world.

“There is an important myth to dispel, that China doesn’t have politics,” said Rana Mitter, professor of Chinese politics at the University of Oxford. “In fact, social media is the major interaction point for popular opinion in China, and hundreds of thousands or even millions of people will participate in conversations on controversial social issues.”

“Since the 2011 Arab Spring uprising specifically, social media have come to play a very important political role across developing and developed economies,” said Dr. Megha Kumar, Deputy Director of Analysis at Oxford Analytica. “That role ranges from at one extreme, efforts to incite political violence, to the use for which they were intended, namely communication.”

The report found that “flash mob” protests, organized in part with mobile devices, played a role in the overthrow of governments in the Philippines in 2001, Georgia in 2003, Ukraine in 2004-5, Kyrgyzstan in 2005, and Thailand in 2006, as well as more recent examples such as Algeria’s long-serving President Abdelaziz Bouteflika’s ouster in 2019.

The report also discovered that online pressure campaigns had contributed to policy shifts in countries ranging from Nepal and Bangladesh to Israel and Nigeria in 2021.

Willis Towers Watson’s Samuel Wilkin, Director of Political Risk Analytics, Financial Solutions, stated that the insurance industry had been caught off guard by some of the political implications of new communication technologies: “Hashtag-enabled protest movements have evolved at an extraordinary rate and scale, resulting in property damage on a scale that we don’t normally associate with social unrest.”