Asia Country Risk Ratings

Afghanistan (AFG)

Afghanistan’s overall risk level remains very high as Taliban control over the government has persisted since they recaptured Kabul in 2021. Political violence and interference are both still at a very high level. The Taliban government are continuing to make efforts to build international support, having built limited ties with the UAE, Kazakhstan and Uzbekistan and they have been clear in stating they are interested in ways of engaging with neighbours in order to boost regional stability and domestic investment. They do however remain heavily isolated from the west since the 2021 recapturing of power, with the US and members of the West having imposed sanctions on Afghanistan and despite no country formally recognising the Taliban government, they claim that they have diplomats in up to 12 countries such as China and Russia. Since 2021, there has also been a rise in Jihadist groups operating in Afghanistan with the West blaming this increasing influence for attacks in Afghanistan and elsewhere such as Pakistan and the regions close to the border. Due to the events of 2021 and the interim government’s implementation of certain controversial policies such as those towards woman, international aid has been significantly less.  Meanwhile, the impact of the central bank asset freezes and limited access to the international banking system, is making the risk of doing business very high. This is making the Afghanistan economy more reliant on its already heavily dependent agricultural system. However, increasing climate risk with heavy rainfall and flooding continuing to cause fatalities and displacements in Kabul and surrounding areas. In July, over 40 people died from floods as well as this, there was significant loss of harvests and livestock. Supply chain disruption is therefore at a very high level, making humanitarian support necessary in some of the poorest provinces in Asia. Elsewhere, the Afghan Afghani has continued to appreciate against the USD in recent months as exchange transfer risk is at a medium high level.

Bangladesh (BGD)

Bangladesh’s political landscape remains volatile following the collapse of Sheikh Hasina Wajed’s Awami League (AL) government in August 2024, reflecting the moderately high risk rating. An interim administration led by Nobel laureate Muhammad Yunus has taken charge, reflecting demands for institutional reform. However, the path to credible elections—expected in 2026—appears fraught with challenges, with persistent high risks of political violence and heightened security concerns.

The interim government’s fragmented composition, including technocrats, military figures, and student leaders, poses risks to policy coherence. While efforts such as replacing key officials in the central bank and judiciary signal reformist intent, entrenched bureaucracy could limit progress. Plans to bar the AL from contesting future elections risk deepening divisions, leaving Bangladesh without effective political opposition.

Religious tensions have intensified, with large Hindu counter-protests on August 9-10 demanding greater representation and protection for minorities. Key demands include a 10% parliamentary quota for minorities, a minority protection law, special tribunals for persecution cases, and a dedicated ministry for minority affairs. Recent attacks on minority Hindu communities—less than 10% of the population—have exposed sectarian undercurrents, exacerbated by perceptions of their support for the AL and Sheikh Hasina’s pro-India policies. These tensions risk broader social unrest and further strain Bangladesh-India relations.

The release of BNP leader Khaleda Zia from house arrest has energized opposition ranks, but demands from the BNP and Jamaat-e-Islami, including representation in the interim government, could escalate tensions. The lifting of Jamaat’s ban reintroduces conservative dynamics, raising concerns over governance and Islamist violence.

Economic instability compounds these challenges. Negotiations for an additional $3 billion IMF package highlight Bangladesh’s precarious fiscal position, but austerity measures, including higher fuel and electricity prices, risk igniting public protests. Meanwhile, a visible shift toward China over India in foreign policy underscores the complexities of Bangladesh’s geopolitical and economic balancing act during this transitional period.

China (CHN)

China’s overall country risk score remains at medium, with the legal and regulatory risk remaining at medium high, and political interference at medium. Internationally, the key issue is U.S./China relations and the incoming Trump administration. China will likely face tariff threats in 2025 and actual tariffs by H2 2025.  However, these will likely be less than the maximum threat of 60% tariffs and also likely to be targeted on certain industries rather than universal, though escalation is then likely as occurred in 2018-19.  This will be designed to agree a phase two trade agreement and China could be quicker to agree than the 18 months in 2018-19 given the unbalanced economy. However, China hawks such as Rubio and Waltz will also want to separately extend technology bans to stop China’s rise.  Meanwhile, a significant escalation with Taiwan remains unlikely, given the election of pro-China speaker in Taiwan parliament and hopes that Trump could be less committed to Taiwan than Joe Biden. Domestically political control of the economy is more evident compared to the 1990-2019 period.  The focus remains on boosting high tech manufacturing and energy production domestically to ensure greater resilience for China. However, other private businesses have not seen support and have faced intermittent crackdowns, e.g., technology companies. This has tempered private sector business investment and employment growth (and hence income and consumption growth).  Residential investment also remains a drag on the economy, with excess completed and uncompleted houses weighing on the sector. Though the government announced additional measures in September-November these are not on a sufficiently large scale to produce a lasting bottom for the housing market.  Elsewhere, the exchange transfer risk remains at medium. A current account surplus, plus substantial FX reserves, helps to support this rating (China is also engaged in a multi-year diversification from U.S. Treasuries, including into gold). The inability to provide fiscal stimulus remains at medium. China has room for extra fiscal stimulation should slower growth risk a hard landing in 2025, while the dominance of domestic investors means that China’s authorities can persuade investors to rollover debt. Banking sector vulnerability also remains at a medium rating, despite worries about the long-term downturn in the residential property sector. Non-performing loans, primarily held by small and city banks, can be managed through potential takeovers by larger banks and local governments.

Georgia (GEO)

Georgia’s overall risk level is medium. October 2024’s parliamentary elections were won once again by the Georgian Dream party as they received 53.93% of the vote, thus Irakli Kobakhidze remains Prime Minister. The exits poll led by HarrisX and Edison Research for opposition TV channels however suggested the 4 opposition parties had won the election. This has raised concerns over the results of the election and the potential of an undemocratic process or vote rigging. The President of Georgia, Salome Zourabichvili, whose role is largely ceremonial who labelled the election results as a ‘’total falsification’’ has accused Russia of interference in the election and called on western nations to contest the result. The US and the EU have also supported calls for an independent investigation as only Russia, Hungary, Azerbaijan, and Armenia have recognised the result. There is a clear division in Georgia between those who want to work towards European integration, like President Zourabichvili and those who are pro-Russia, like PM Kobakhidze. This has led to a political crisis as violent protests have been taking place over the Georgia Dream Party’s supposed closer ties to the Kremlin and the suspension of EU accession talks until 2028. Mikheil Kavelashvili is set to take over Zourabichvili as President having been selected by the ruling party, however President Zourabichvili says she will not step down until there are new parliamentary elections. Political violence is medium high and political interference medium. In terms of the economy, the IMF estimate real GDP to have grown by 7.6% in 2024 and 6.0% in 2025, highlighting the resilience of the economy in the face of political turmoil and division. Positive increases in FDI, with a large proportion coming from the Netherlands, as well as a boosts in tourism and immigration of workers from Russia have supported growth. The risk of doing business is medium low. Low inflation at 1.1% for 2024 and 2.6% in 2025, supported by a stronger Georgian Lari since 2021, has boosted private consumption in the economy. A now consistent current account deficit of -5.8% of GDP for 2024 and -5.9% in 2025 is expected after improvements since COVID with tourism on the rise and an increase in remittances from expatriates reducing the deficit in recent years. And, sound fiscal policy has meant that there have not been huge budget deficits to derail government debt, which is expected to fall from 38.2% of GDP to 37.4% of GDP in 2025. The inability of the government to provide fiscal stimulus is medium low and sovereign non-payment risk is medium.

India (IND)

India's political landscape has experienced significant developments in recent months, particularly following the general elections held in June and the subsequent state elections, including the crucial Jammu and Kashmir Assembly elections. In the general elections concluded on June 4, the Bharatiya Janata Party (BJP), led by Prime Minister Narendra Modi, secured 240 seats in the Lok Sabha, a notable decline from 303 seats in 2019. The BJP's coalition, the National Democratic Alliance (NDA), managed to achieve a total of 293 seats. The shift to a coalition government has introduced complexities into governance. Modi's administration now relies on various regional parties to maintain stability, requiring consensus-building among diverse coalition partners. Nonetheless, India’s overall stability is not compromised. This is reflected in India’s moderate risk rating.

Meanwhile, following the parliamentary elections, several state elections have taken place. A significant event during this period was the Jammu and Kashmir Assembly elections, held from September 18 to October 1, 2024. This marked the first assembly elections since the abrogation of Article 370 in 2019, which revoked Jammu and Kashmir's special status. The results announced on October 8 revealed a landslide victory for the Jammu and Kashmir National Conference (JKNC), which secured 42 out of 90 seats. The BJP came in second with 29 seats, while the Indian National Congress won six seats. This outcome reflects a significant comeback for regional parties after a decade-long hiatus from power. JKNC leader Omar Abdullah was subsequently sworn in as Chief Minister, marking a pivotal moment in Jammu and Kashmir's political history. Several other state elections have taken place as well, which will significantly impact the political landscape. The Maharashtra Assembly elections, held on November 20, 2024, saw intense competition between the ruling Mahayuti coalition—comprising the BJP and Eknath Shinde-led Shiv Sena—and the opposition Maha Vikas Aghadi (MVA) alliance, which includes Congress and Uddhav Thackeray's Shiv Sena faction. The outcome of these elections, which is yet to be declared is crucial for both coalitions as they seek to solidify their power bases. Similarly, Jharkhand also held assembly elections during this period. Modi's approval ratings have dipped slightly amid controversies surrounding his administration's handling of dissent and corruption allegations. The recent election results reflect broader public discontent with Modi's leadership. These setbacks indicate a shift in voter sentiment that could challenge the BJP's long-standing dominance. Overall though, India's political landscape remains stable.

Indonesia (IDN)

Indonesia’s political landscape is entering a transformative phase under President Prabowo Subianto, who began his five-year term in October 2024. His administration marks a shift from the era of Joko Widodo (Jokowi), with a smaller coalition and a cabinet designed for continuity and political stability. However, the exclusion of the Indonesian Democratic Party-Struggle (PDI-P) and the National Democratic Party (NasDem) from the cabinet highlights rising opposition strength, which could challenge legislative processes and policy implementation. Consequently, the overall risk rating remains unchanged at moderate.

The new cabinet, expanded to 48 ministries, reflects a dual-edged strategy: accommodating coalition partners while signaling larger budgets and increased bureaucracy. Technocrats such as Sri Mulyani Indrawati remain pivotal, reassuring international investors of fiscal discipline amid bureaucratic expansion. Yet, Prabowo’s reduced parliamentary majority (348 of 575 seats) compared to Jokowi’s prior coalition may embolden opposition forces, led by the PDI-P, which holds 110 seats. This dynamic could obstruct critical reforms, especially in anti-corruption and governance, areas where Prabowo’s resolve appears limited.

Upcoming gubernatorial elections, particularly in Jakarta, will test the ruling coalition’s grassroots appeal. Candidates from both PDI-P and Gerindra remain amiable to Prabowo, but the race will serve as a litmus test for national political alignments. On the policy front, continuity defines Prabowo’s agenda, from food security and infrastructure development to courting foreign investment. The ambitious Nusantara capital project faces delays and fiscal constraints, highlighting challenges in realizing Jokowi’s legacy projects. Internationally, Prabowo’s neutral foreign policy aligns with Indonesia’s strategic priorities, balancing ties with China while seeking diversification through free-trade agreements, including CPTPP membership.

In essence, Indonesia’s political outlook under Prabowo is one of cautious optimism tempered by institutional and coalition fragility. While the administration promises continuity, opposition strength and governance gaps could constrain its reformist ambitions. However, overall political stability will persist with no expectations of violence or protests.

Korea, Dem. People’s Rep.  (PRK)

North Korea’s overall risk level remains very high. Kim Jong Un remains the supreme leader of the country. Political violence, political interference and legal & regulatory risk remain very high. North Korea continues to improve their military system with multiple new weapons and has pledged to continue doing so. North Korea, is also becoming more of a major ally of Russia and are now supplying troops as well as arms in exchange for oil and technology transfers. North Korea has been suffering from food shortages, due to the UN’s sanctions over its weapons and several natural disasters that have also led to deepening their agricultural ties with Russia. North Korea support re the war in Ukraine could decrease however, if the Trump administration reduces funding for Ukraine and tries to broker a ceasefire or peace deal.  The Trump administration has too many issues to look at North Korea directly for now, but Trump still claims a good relationship with Kim Jong Un.  In the coming years this could lead to new negotiations to freeze North Korea’s nuclear program. North Korea might also be willing to consider nuclear disarmament for recognition of North Korea as a nuclear power and U.S. financial support, though China and Russia would be uncomfortable with this. Complete denuclearisation is unlikely to be agreed. Meanwhile, supply chain disruption remains high. Sovereign non-payment remains medium high and exchange transfer remains low. The risk of doing business remains very high in North Korea.

Macau (MAC)

Macau’s overall risk is medium low. Macau is a special administrative region ruled by China. In October 2024, Sam Hou Fai was elected as the chief executive delegate of Macau, taking over from Ho Lat-seng as leader who decided not to run for a second term for health reasons. Sam Hou Fai won 394 out of the 398 ballots cast in the election in which citizens don’t have a say in the appointment of their chief executive delegate. Sam will become the fourth chief executive of Macau since Macau was reverted to Chinese rule from Portuguese. Political interference is low and legal & regulatory risk is medium low. Macau’s new leader has made clear his desire for Macau’s economy to be diversified relying less on the gambling industry which dominates the economy. When chief executive Sam met China’s President Xi Jinping in Beijing to receive his forma appointment letter, Xi expressed his wish to bring China, Macau and Hong Kong closer together and use Macau to promote a ‘’Chinese-style modernisation’’. According to the IMF, growth will slow in Macau. Real GDP is anticipated to grow 10.6% in 2024 and 7.3% in 2025. The casino hub is aiming to be able to boost tourism by welcoming more visitors from outside of Chinese territories. Lunar New Year did see a record number of more than 217,000 visitors to Macau which boosted the industry, however, visitor numbers remain below pandemic levels as Macau’s economy were hit hard by the strict ‘Zero COVID’ policies. As for inflation, the IMF anticipate stable increases in average prices in the economy, 1.1% for 2024 and 2% for 2025. The strong current account surplus is expected to persist in 2024 with the IMF expecting it to reach 33.2% of GDP and 33.3% of GDP for 2025, back to pre-pandemic levels. The risk of doing business in Macau is low. The Macanese Pataca (MOP) is pegged to the Hong Kong Dollar at a rate of 1 HKD for 1.03 MOP. A currency which is not administered by a central bank but two commercial banks in the Banco Nacional Ultramarino and the China stated owned Bank of China. Banking sector vulnerability is medium high and exchange transfer risk is medium low.

Malaysia (MYS)

Malaysia's political landscape has seen significant developments in the second and third quarters of 2024, reflecting a period of relative stability after years of turmoil, underscoring its moderately low risk rating. Following the tumultuous general elections in late 2022, Prime Minister Anwar Ibrahim has worked to solidify his unity government, which comprises 19 parties and aims to address pressing economic and social issues.

The political climate has improved markedly since Anwar's coalition took power, allowing for a focus on governance and reform. Anwar’s administration has emphasized economic growth while tackling corruption and enhancing financial sustainability. Recent state elections have reinforced the coalition's position, fostering a sense of stability that is crucial for implementing long-term reforms.

However, challenges remain. The rising cost of living and ongoing ethnic and religious tensions are persistent issues that threaten social cohesion. Anwar's government is tasked with balancing these challenges while maintaining unity among coalition partners, which remains a delicate endeavor. Anwar must carefully navigate the coalition's diverse interests, especially around policies favoring the bumiputera, a demographic that forms a political bedrock for the government. Ethnic tensions are expected to rise as dissatisfaction grows among non-Malays over affirmative action policies, though these grievances are unlikely to escalate into major unrest. The unity government is unlikely to prioritize transitioning to needs-based affirmative action due to its reliance on Malay support, which makes balancing economic reforms and inclusivity challenging. Upcoming state elections in Sabah (2025) and Sarawak, Melaka, and Johor (2026-27) will gauge voter sentiment. Sabah’s demand for greater autonomy and its revenue entitlements under the Malaysia Agreement 1963 could influence national political dynamics. While the Gabungan Rakyat Sabah coalition is favored to win, strong challenges from Warisan and UMNO underscore the fluidity of regional politics. Malaysia’s unity government must manage competing ethnic and political interests while delivering on its reform promises to maintain stability and electoral viability. For now, though, Malaysia’s political landscape remains relatively stable.

Nepal (NPL)

Nepal's political environment continues to be marked by instability, with its fractured parliament and history of fluid alliances. The overall risk level remains moderately high, underscoring persistent political risk alongside high risk to supply chains and business operation. Since transitioning to a parliamentary democracy in 2008, the country has experienced 14 governments, reflecting a tradition of volatile coalitions. This instability is expected to persist through 2024 and beyond, as power struggles and shifting allegiances continue to define its political landscape. Consequently, political volatility remains very high.

The current coalition, led by Prime Minister K.P. Sharma Oli of the Communist Party of Nepal (Unified Marxist-Leninist) [CPN (UML)], includes the Nepali Congress (NC) and smaller parties. Although the coalition holds a strong majority in the lower house, its internal dynamics suggest fragility. The rotational leadership agreement between the NC and CPN (UML) is unlikely to sustain long-term stability, given Oli’s history of reneging on such arrangements. His unilateral decision-making risks alienating coalition partners, particularly NC leader Sher Bahadur Deuba, who harbors ambitions of his own. The tenuous coalition raises the probability of early elections before 2027.

The fractured nature of Nepal's parliament stems partly from its mixed electoral system, which combines first-past-the-post and proportional representation. While the government may push for constitutional amendments to streamline this system, resistance from marginalized groups, who benefit from proportional representation, makes such reforms unlikely. Nepal's foreign policy further reflects its internal divisions. Oli's pro-China tilt contrasts with Deuba's pro-India stance, complicating bilateral diplomacy and regional cooperation. The coalition's divergent views on key issues, such as Chinese infrastructure loans and territorial disputes with India, will inhibit cohesive policymaking. Despite these challenges, Nepal’s strategic location ensures active engagement from India, China, and the US, each vying for influence through aid and investments.

On the policy front, economic growth and infrastructure development remain priorities, but progress will be hindered by political instability and administrative delays. While projects like the Pokhara International Airport and energy exports to India show potential, inefficiencies in implementation threaten success. Ultimately, Nepal’s political and policy landscapes will remain constrained by instability, limiting the scope for meaningful reform or sustained growth.

Papua New Guinea (PNG)

Papua New Guinea’s overall risk level remains medium high. James Marape is still PM having come out on top in 2022’s legislative elections. September 2024 saw PM Marape face a vote of no confidence which he successfully overcame as 75 MPs backed him against 32. The vote of no confidence and increase pressure on the PM has come from the increase in tribal violence in PNG. September saw at least 30 people dead after a series of shootouts were reported between different tribes over the contested Porgera gold mine. Police reported more than 300 gunshots and despite the police being given emergency powers to halt the violence, peace talks between the two rival tribes have broken down. Tribal gang violence has become more and more common in PNG and Pope Francis made it clear in a visit to PNG in September that he hopes that ‘’tribal violence will come to an end’’. Political violence and political interference are both at medium high levels. Furthermore, the World Bank estimate that 40% of the population live in poverty and many live without access to essentials such as clean water and electricity.  In addition, PNG are becoming increasingly vulnerable to difficult weather patterns due to the emerging climate risk. In May, 670 people and over 150 houses were estimated to be buried under a huge landslide in Mulitaka, according to UN officials. Landslides of this scale are likely to continue to have an impact in PNG due to the increasing climate risk and mountainous terrain. As a result, the risk of supply chain disruption is medium high. In terms of the economy, the IMF estimate 4.6% real GDP growth in 2024 and 3.7% in 2025. Inflation is anticipated to be at 4.4% for 2024 and 4.8% in 2025. The current account surplus is forecast to persist at 9.9% of GDP for 2024 and 12.2% in 2025, according to the IMF. Export led growth through the liquefied natural gas (LNG) sector and gold exports which is supported by the weakening Papua New Guinea Kina over the past 18 months. However, the downside risk of the violence halting production remains. Government debt to GDP is also expected to fall in the medium term with LNG and gold export revenues likely to support government finances. Thus, with this and continued IMF support under the Extended Credit Facility program, PNG can invest in vital transport in transport infrastructure in ‘’Connect PNG’’ program and human capital in order to boost low productivity. Exchange transfer and sovereign non-payment risk are medium high.

Sri Lanka (LKA)

Sri Lanka's political landscape has experienced a profound transformation in 2024, particularly following the election of Anura Kumara Dissanayake as president on September 21. Dissanayake, leader of the left-leaning Janatha Vimukthi Peramuna (JVP), won amid widespread public discontent stemming from the economic turmoil that triggered the 2022 protests known as the Aragalaya movement. His victory signifies a departure from decades of political dynasties and neoliberal policies that have long dominated governance in Sri Lanka. Given the recent crisis and the incoming new-administration, the overall risk rating is pegged at moderately high. The rating is strongly influenced by high risks of both political and economic nature. On the economic front, Sri Lanka is gradually recovering from its debt crisis and debt restructuring agreements are in the final stage.

On the other hand, political risks remain high. Dissanayake's election is largely viewed as a response to the populace's frustration over corruption and economic mismanagement. His campaign emphasized abolishing the executive presidency—a role often criticized for centralizing power and enabling authoritarianism. His promises include decentralization of authority and enhanced accountability within government institutions. However, implementing such reforms may encounter resistance from entrenched political interests benefiting from the existing system.

Following his election, Dissanayake dissolved parliament and called for elections on November 21, 2024, to secure broader support for his reform agenda. This decision was crucial for consolidating his power base and advancing his populist agenda. The recently held parliamentary elections saw Dissanayake’s party, the National People’s Power secure two-thirds majority in parliament - a historic mandate. Against this backdrop, Dissanayake will have ample support to sustain the government and introduce key reforms during his tenure. For now, Sri Lanka’s political landscape, although highly fragmented, appears to be moving towards stability. Political violence is limited and domestic security has been restored. Election related volatility is also expected to ebb now that both parliamentary and presidential elections have concluded.

Taiwan (TWN)

Taiwan’s overall country risk score of medium-low reflects economic strength and only moderate and intermittent tensions with China over reunification. The key uncertainty is Taiwan’s relationship with the new Trump administration, which will likely require Taiwan placing large orders for U.S. military hardware and increasing advanced semiconductor production in the U.S.  Even so, President Trump’s aversion to war will likely see less commitment to helping defend Taiwan than President Joe Biden, though China hawks will likely get Trump to keep the strategic ambiguity policy.  Meanwhile, China’s gray warfare has continued in 2024 with military aircraft intermittently flying close to Taiwan and China’s naval exercises.  China is unhappy with the new Taiwan president. However, the gray warfare has not escalated compared to recent years. China will also likely be pleased that a pro-China politician from Kuomintang, Han Kuo Yu, has been elected speaker of the Taiwan parliament earlier this year. Additionally, the parliament has passed a bill that requires the president to make regular reports to parliament, which is seen as a China-friendly policy. This could be a route to a more China-friendly view in some sections of Taiwanese society, which China would want to play out in the coming years and avoiding the alternative very high risk option of invasion. Thus, China will likely continue to pressure Taiwan but stop short of major escalation. Elsewhere, structural economic indicators remain strong helped by a well-balanced economy, controlled inflation and a huge current account surplus.  This leaves exchange transfer at a low rating, while the risk of doing business also remains at a low rating. Risk of sovereign non-payment is medium-low, which reflects the low government debt/GDP trajectory. 

Thailand (THA)

Much like Bangladesh and Nepal, Thailand’s political risk is also moderately high due to entrenched conflicts between democratic reformist forces and the military-aligned establishment. The recent elevation of Paetongtarn Shinawatra as prime minister underscores the return of the Shinawatra family to power but also highlights the political fragility surrounding her administration. Paetongtarn’s reliance on her father, Thaksin Shinawatra, for strategic direction underscores concerns about her political inexperience. Her leadership faces significant challenges from intra-coalition tensions and broader conflicts with military-aligned factions.

Furthermore, the exclusion of the Phalang Pracharat Party (PLP) from the government signals growing fractures within the ruling coalition. Simultaneously, the United Thai Nation (UTN) party, a military-aligned partner, is poised to safeguard the military’s influence, which conflicts with Pheu Thai Party’s (PTP) democratic reform agenda. This tension raises the likelihood of policy gridlock and risks the coalition's stability. If this instability escalates, the probability of a military coup could rise from 30% to 40%, given Thailand’s history of frequent coups. Meanwhile, the recent disbandment of the Move Forward Party (MFP) and its reorganization as the People’s Party (PP) reflects a persistent appetite for reform among younger, urban voters. The opposition’s progressive agenda remains a disruptive force, but its influence is tempered by the conservative composition of the Senate, which favors military-aligned interests. Efforts by the PTP to introduce constitutional reforms face substantial obstacles. While referendums on democratic reforms may offer a semblance of progress, concessions to military-aligned groups will dilute substantive change.

Meanwhile, Thailand’s southern insurgency remains a localized issue with minimal impact on national stability. However, broader tensions over monarchy reform and lese-majesty laws will deepen societal divisions and challenge political cohesion. Sustained instability and compromised reform efforts will weigh heavily on the country’s political trajectory in 2024.

Turkmenistan (TKM)

Turkmenistan is assigned a high overall risk. The Central Asian country, led by President Serdar Berdimuhamedow, has a medium-high political violence risk. President Berdimuhamedow took office in 2022 when he won the election and replaced his father, Gurbanguly Berdimuhamedow. The country remains one of the world's most authoritarian states, according to sources as the legal and regulatory and political interference risks are deemed very high, with risks stemming from the weak rule of law and high state intervention over the economy. Decision-making is centralized at high levels, including the judicial branch, which operates under instructions from the executive power; while the country lacks of consistent business legislation and looks cautiously at foreign investment. Supply chain risks stand at a medium-high level due to ongoing war in Ukraine coupled with weak transport infrastructure and high logistic costs. Restrictions on currency transfers and convertibility dominate, and the country suffers due to poor relations with international financial institutions. Restrictions on transfers and convertibility present the main currency risks meaning the exchange transfer risk remains at a high level. Due to reasons mentioned, the risk of doing business is one of the worst in the region, standing at a very high level. The country is highly dependent on commodities and has a high export concentration; however, policies to diversify the economy, including the investment in the sectors of transport infrastructure, agriculture, and non-industrial sector have been reported. A high point for the country is related to its strong sovereign balance sheet and one of the lowest public debt in the region; mostly supported by its revenue stemming from natural resources (natural gas). These factors make both the sovereign non-payment and the government’s inability to provide stimulus at a medium level. Foreign exchange is limited, and only a handful of businesses or individuals have the opportunity to convert currency at the official rate. Banking sector vulnerability remains at medium-low though the sector is poorly regulated and is dominated by the state, with most of banks' authorised capital held by the State Development Bank of Turkmenistan and other state-owned banks. 

Uzbekistan (UZB)

Uzbekistan’s overall risk score is at medium-high level. The political violence and political interference risks remained at medium-high while legal and regulatory risk is at very high in this rating period. Affected negatively by the war in Ukraine and sanctions against Russia, Uzbekistan’s economy is strained by corruption, structural deficiencies, and high state involvement over the business environment. The ruling Liberal Democratic Party (LDP) increased its majority in a parliamentary election on October 27th, with no true opposition parties, winning 43% of seats. This result is expected to strengthen Shavkat Mirziyoyev’s power. Securing a renewed seven-year term in 2023, Mirziyoyev is criticized for not being able to initiate any serious political liberalization and also sustaining pressures on media, activists and bloggers. Additionally, domestic instability and poor institutional effectiveness continue to keep political risks elevated and political interference risk to stand at medium-high. Despite the economy being uncompetitive, and state intervention extensive, the economic momentum is promising.  The government tries to maintain growth momentum which is supported by growing FDI, population and surging government spending. This rating period saw an increase in banking sector vulnerability from medium-low to medium level as banking sector continues to face regulatory deficiencies and remains dominated by state-owned banks. Sovereign non-payment risk remains at medium level as this rating is supported by a relatively low public debt/GDP ratio and country’s high international reserves, which are primarily held in gold, lowering financial stress. Elsewhere, the medium-high risk level of doing business reflects concerns linked to strong state involvement in the economy harming the business environment.

Please refer to the following link (here) to access our full Country Insight Scores.