Revisiting South Africa’s Contemporary Political Risk Profile

Type Journal Article - SOuTHERN AFRICAN
Title Revisiting South Africa’s Contemporary Political Risk Profile
Volume 2
Issue 1
Publication (Day/Month/Year) 2012
Page numbers 35-58
URL (article).pdf
The impetus for this paper is a downgrading of South Africa by ratings agencies Moody’s and Standard
& Poor of South Africa’s sovereign debt rating shortly after the so-called Marikana incident during the
last months of 2012. The Marikana incident was followed by turbulence in the farming industry and
related social tension and policy uncertainty in 2012. The question arises whether political, economic
and social conditions in South Africa are currently posing greater political risk for potential investment
than during the 1990s to mid-2000s. This calls for a fresh assessment of relevant indicators or variables
in the South African context as well as a reasoned, empirically defensible and testable attempt that is not
merely mirroring the idiosyncratic opinion of the analyst. In other words, what is needed is an analysis
of relevant political risk indicators that are based on a sound intellectual tradition and practical logic.
Against this background this study is an attempt to revisit and analyse current political risk in South
Africa on the basis of a selected set of indicators or variables that are commonly and internationally
used in risk analysis frameworks.

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