Errors in Ranking by The Economist

Forecasting more risk of social unrest for Nicaragua than Costa Rica in 2014, indicates ignorance of the political, economic and social realities of Central America.

Wednesday, November 20, 2013

EDITORIAL

The print edition of "The World in 2014" by The Economist Intelligence Unit reported a measurement of the risk of social unrest in 150 countries, categorizing them into 5 levels.
(See: Ripe for rebellion? )

The high reputation of this British magazine often leads to an intrinsic trust in what they print, but it is a verifiable fact that often the lists that are published are out of step with reality.

In this case, in the assessment of the risk of social unrest, there is a clear error in predicting more risk in Nicaragua than in Costa Rica.

Regardless of the philosophical-political stance you take, it is well known that Costa Rica unfortunately is experiencing a period of economic decline compounded by political chaos that threatens institutions, starting with the political parties. This situation is clearly described in the last State of the Nation report.
(See: State of the Nation 2013 )

On the other hand, Nicaragua, despite being the poorest country in the region, has been experiencing an economic rebound in recent years that translates into political support for its government, which has also kept a tight grip on most social sectors, which ensures social stability, at least in the short term, although their methods can be described as undemocratic.

Definitely, for 2014, in the view of CentralAmericaData.COM, there is more risk of social unrest in Costa Rica than in Nicaragua.



More on this topic

Crisis in Nicaragua: No Solution in Sight

May 2018

In the view of Fitch Ratings, continued political unrest could undermine investment conditions and economic growth, as well as raise the risks of confidence shocks to the financial system and macroeconomic stability.

From a statement issued by from Fitch Ratings:

Fitch Ratings-New York/San Salvador-17 May 2018: Continuing protests and resulting political violence in Nicaragua heighten risks to political stability and governability, says Fitch Ratings. Continued political unrest could undermine investment conditions and economic growth as well as elevate risks of confidence shocks to the financial system and macro stability.

Guatemala´s Economic Stability Emphasized

October 2015

The political crisis does not seem to have affected the economy, where the risk noted is related to the imbalance in government accounts, which has reached 25% of GDP.

A report by the Association for Research and Social Studies of Guatemala (ASIES) concludes that "... despite the crisis in the public sector due to corruption that led to the arrest of the former vice president Roxana Baldetti, and to the resignation of former President Otto Perez Molina to face justice, Guatemala's economic growth may not be affected, in part because of the behavior of remittances, and the sustainability over time of the macroeconomy, among other things. "

Escalation of Drug Trafficking in Central America

March 2011

The lack of government capacity and economic power disadvantage compared to the drug industry, has lead to an increase in violence and corruption.

"Using systematic violence and corruption, intimidation and extortion of public officials, the wealthy and powerful criminal groups have been able to weaken police and judicial systems.

The Perfect Storm

May 2009

Guatemala is experiencing a crisis with vectors that feed each other reciprocally and which can lead to a disastrous scenario of "the storm of the century."

Economic crisis. Political crisis and violence. Social crisis.

Miguel Gutiérrez, an analyst for Central America Business Intelligence (CABI), wrote: "Guatemala is facing conditions that could have similarities with the novel “The Perfect Storm.” The hope is that Guatemalan sailors can reach a different conclusion than that of the novel, in terms of the issues that are related to the economic crisis—although in this area it is already a little late—and the political as well as the social crises to come."

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