This month’s coverage of the Americas includes a fully revised report on Argentina, where the end of 12 years of continuous rule by the Kirchner dynasty appears to signal a retreat from the heterodox populism that characterized the policy approach of Nestor Kirchner and Christina Fernandez. The pro-government FPV lost its majority in the lower house of Congress, and its presidential candidate

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NOVEMBER COMING SOON
This month’s coverage of the Americas includes a fully revised report on Argentina, where the end of 12 years of continuous
rule by the Kirchner dynasty appears to signal a retreat from the heterodox populism that characterized the policy approach
of Nestor Kirchner and Christina Fernandez. The pro-government FPV lost its majority in the lower house of Congress,
and its presidential candidate, Daniel Scioli, made a weaker
showing than expected. He will go head-to-head against
Mauricio Macri, whose center-right PRO advocates liberal
economic policies and a pro-business agenda. Macri is
favored to win the November 22 run-off after receiving
the endorsement of Sergio Massa, a former member of the
FPV who finished third in the October voting, and Scioli
will need to distance himself from the Kirchner legacy if he
hopes to compete with Macri.
As such, the policy course is all but certain to shift toward
the center under the next government, regardless of who
wins the election, the outcome of which will determine
how much, and not whether, there is an adjustment to the
policy course. The report will examine what specific policy changes are in store, based on the outcome of the presidential
contest, with special attention paid to fiscal strategy, efforts to resolve the ongoing debt mess, relations with Mercosur,
and possible moves to create a more inviting climate for foreign investment.
Turning to the Middle East and North Africa, PRS will provide an update on Tunisia, the only country in the region
to fulfill the democratizing potential of the Arab Spring phenomenon, a fact recently acknowledged by the awarding of
a Nobel peace prize to the civil institutions that played a crucial role is safely steering the transition process through to a
successful conclusion. While that achievement is certainly worthy of praise, the persistence of official corruption, tensions
between political secularists and Islamists, the repeated targeting of Tunisia for terrorist attacks, and the threat to security
posed by conflict in neighboring Libya create the potential for the country to suffer a political regression.
PRS will examine what political leaders need to do to avoid that dismal scenario, and assess the capacity of the incumbent
administration in Tunis to meet the challenge. In that regard, the analysis will focus especially on the government’s
economic development strategy, and what it portends in terms of the opportunities for foreign investment, as well as plans
for addressing the risks associated with terrorist violence and reducing corruption, both of which are crucial to creating
a more hospitable business climate.
Looking at sub-Saharan Africa, Botswana’s economy is facing continuing strain from a downturn in global demand
for diamonds, the country’s key export. A fall in revenue has forced the government of President Ian Khama to halve
its economic growth forecast for 2015 and consider a stimulus package to revive the economy. Botswana has sufficient

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foreign exchange reserves to withstand external shocks, and the ruling Botswana Democratic Party (BDP) faces no
electoral challenges until 2019. Still, economic trouble will add to pressure on the government as rival BDP factions begin
to jockey for succession to Khama.
The economic slowdown comes after a string of by-election defeats for the BDP this year. The opposition is expected to
continue making political capital out of widespread discontent with living standards and with Khama’s heavy-handed
leadership style. With no obvious successor to Khama, risks to political stability will remain slightly elevated during the
president’s second and final term in office. However, internal disputes in the BDP are unlikely to reach boiling point until
the final stages of the current parliament.
We also take a closer look at Angola this month, which is approaching four decades of independence in the grip of an
evolving political crisis stemming from the negative oil shock weakening the economy, and diminishing the resources
on tap to maintain the regime’s survival. Refusing to draw down on sovereign wealth fund assets, we look at how the
MPLA regime stuffing the legislature is borrowing more to plug gaps in public financing, which in spite of an impressive
deficit-reduction program (progressing to the restructuring of Sonangol, the national oil company) is raising concerns for
longer-term debt servicing capability. Unease is growing, too, among a population facing hardship through inflation and
unemployment, disenchanted by corruption and a crackdown on comparatively innocent, non-violent public discourse,
which is threatening to escalate into more serious civil unrest, testing the authorities’ resolve and inflicting more damage
on the economy. The failure of President Jose Eduardo dos Santos to attend parliament to deliver his annual state of the
nation address has moreover set tongues wagging on his fitness to govern, and worse still, the prospect of internal party
dissent. With no apparent succession plan in place for the septuagenarian we look at what this and the various macro-fiscal
indicators will mean for investors in 2016.
Presidential and legislative elections will be held in the Philippines in May 2016, and the contest to determine the successor
to Benigno Aquino, whose economic and fiscal management has enabled the Philippines to retain the investment-grade
credit rating it gained in 2013, is shaping up as a three-way race. Our report examines whether first-term senator and
independent candidate Grace Poe can capitalize on her lead in the opinion polls to deny victory to former Vice President
Jejomar Binay and Mar Roxas, who is standing as the candidate of Aquino’s Liberal Party, the dominant force in the Team
PNoy coalition. We assess what the elections will mean for political stability, the nation’s ropey record on corruption,
infrastructure spending and employment growth, and maintaining fiscal prudence. Our report assesses other key issues,
including the country’s leanings towards the Trans-Pacific Trade Partnership and developments in the territorial dispute
with China. We assess the wavering peace process in the autonomous Muslim region of Mindanao that has lately seen
protesters take their complaints to the streets of Manila, and the related issue of mining sector rights and the sector’s
outlook in light of the long-standing moratorium on new mining permits.
Our detailed coverage of Western Europe this month includes a special feature on Ireland, which is presently the euro
zone’s fastest growing economy, but is also preparing for parliamentary elections in the spring that are pointing to

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Founded in 1979, the PRS Group is among the earliest commercial providers of political and country risk forecasts. Origi-
nally the Political Risk Services division of Frost & Sullivan, Inc. and then of UK-based IBC Group (now known as In-
forma), the firm occupies a niche market in the risk sector through the application of two globally recognized, proprietary,
quant-driven, and back-tested methodologies: Political Risk Services (PRS) and the International Country Risk Guide
(ICRG). A number of products based on these two risk rating systems are produced at regular intervals throughout the year.
The firm and its methodologies for assessing risk are the product of research conducted by Professors William Coplin and
Michael O’Leary of the Maxwell School of Public Affairs at Syracuse University in conjunction with the US Department
of State and the CIA. The overall goal was to develop an intellectually rigorous way of assessing the various components of
country risk that could be applied to a range of institutional settings. In the wake of the Iranian Revolution, where many
foreign firms were nationalized, the importance of the work intensified.
Our publications and data are used extensively worldwide by investors and businesses, colleges and universities, private
equity groups, and all of the main multilateral institutions.
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heightened risk in light of the increasingly fragmented political spectrum. Neither the economic improvement, which
in any event is largely Dublin-centric, nor the small give-away budget putting austerity on hold, guarantee victory for
the Fine Gael-Labour party coalition, which would like to reform its partnership, having made collegiate progress in
restoring Ireland to macro-fiscal stability. The continued presence of “ghost towns” in provincial areas affected by the
real-estate blow-out, the legacy of the water charging debacle, and pockets of high unemployment fueling emigration are
all assessed, contrasting with the buoyant headline figures depicting a bailout country now back on track. Our report looks
at what this will all mean for the election outcome, for future political stability and for debt and deficit reduction plans
as Fianna Fail and Sinn Fein, the main opposition parties battle it out alongside numerous other smaller interest groups
and unaffiliated independents which collectively could scoop up a considerable number of seats in the slimmed-down
158-member legislature.
Turning to Eastern Europe, PRS will issue an update on Poland, where the conservative nationalist PiS has been returned
to power following elections held in late October. Jaroslaw Kaczynski’s party was expected to defeat the incumbent PO,
especially after the polarizing PiS leader named his deputy, Beata Szydlo, as the party’s candidate for prime minister.
However, the failure of a coalition of green and left-leaning parties to win the minimum vote share required to qualify
for representation in the Parliament unexpectedly added more than four dozen seats to the total distributed among the
qualifying parties, with the result that the PiS claimed an outright majority of seats in the 325-member Sejm, despite
winning less than 38% of the vote.
The update will discuss how the PiS is likely to use the freedom afforded by its ability to govern without a coalition
partner, focusing on the implications for relations with the EU, for the domestic business climate, and for economic
stability. In that regard, Kaczynski’s praise for the policy approach adopted by Hungary over the last several years, which
has included populist deviations from fiscal orthodoxy, episodes of hostility toward foreign investors, and frequent friction
with Brussels, highlights the potential for disconcerting developments that heighten risk. On a related note, PRS will also
examine the relationship between Kaczynski and Prime Minister Szydlo, as part of a broader assessment of the extent to
which the new government’s majority status improves its chances of surviving for a full term.