Risk Outlook for Qatar, Brazil, the Philippines, Saudi Arabia and Mozambique

26 July 2017

JLT Specialty's Credit, Political and Security Risks (CPS) team recently published the July edition of their monthly newsletter Risk Outlook. This issue contains an assessment of the security, trading and investment environment for Qatar, Brazil, Philippines, Saudi Arabia and Mozambique, some of which have been the subject of recent enquiries by JLT's client base.

Here are a few of the team's findings:


Following Qatar's rejection of demands from Saudi Arabia, the UAE, Egypt and Bahrain on 22 June 2017 which would have restored its severed ties with seven participating countries, a period of prolonged isolation for the country, with closer links to Turkey and Iran, is increasingly likely.The country has relied on food imports from Turkey and Iran since 5 June 2017. A prolonged period of severed relations could have a detrimental effect on the Qatari economy and may undermine Qatar's economic growth rate, which is forecasted at 3.4% for 2017.


The release of a recording in May 2017 in which President Michel Temer appears to authorise bribe payments has significantly weakened his government’s position. Although the political crisis is likely to negatively impact economic reform, which in turn could result in the downgrading of the country's credit rating, policies aimed at opening up heavily regulated sectors to private investment – a central tenet of Temer’s agenda that has broad congressional support – are less likely to be affected. As a result, a number of reforms are still likely to be introduced in H2 2017 and H1 2018.


Sustained foreign investment and expansionary fiscal policy is expected to enable the Philippines to retain its position as one of the fastest growing economies in Asia in 2017, with a real GDP growth rate forecasted at 6.3%. The Philippine government plans to channel USD 72.1 billion into major infrastructure projects to improve logistics networks and enhance growth prospects. The capture of Marawi City by around 200 militants belonging to the Maute Group – a pro-Islamic State terrorist organisation – on 23 May 2017 and the subsequent efforts by the Armed Forces of the Philippines (AFP) to retake the city will significantly elevate the risk of property damage, death and injury in the city over the coming weeks. 

Saudi Arabia:

Deputy Crown Prince Mohammed bin Salman – who has driven Saudi Arabia’s policy agenda in recent years – was promoted to the position of Crown Prince by the Saudi Arabian king on 21 June 2017. His promotion is expected to result in the continuity of a more assertive foreign policy, with a focus on confronting Iran and securing regional influence. His ascension will increase the risk of intensified proxy conflicts in Bahrain, Lebanon, Syria, Iraq and Yemen. Bin Salman’s promotion will also ensure continued progress on his economic reform agenda – Vision 2030 – which includes measures to partly privatise state firms, liberalise financial markets, expand state investment in sectors such as pharmaceuticals and effect fiscal consolidation. Despite progress on reforms, Saudi Arabia's real GDP is forecasted to contract by 0.2% in 2017 due to certain debilitating factors.


The Mozambican government is in discussion with its creditors to restructure government issued and guaranteed debt, and there is a growing risk that a deal will not be reached due to differing opinions about prioritisation of debts. If the discussions fail, the government will be unable to resume access to concessionary lending from the IMF (which was suspended following the revelation of additional USD 1.4 billion public sector debt in April 2016) or access international credit markets. This will force the government to manage the fiscal deficit through widespread cuts to recurrent social spending, which include subsidies for basic goods. As subsidy cuts elevate inflation, anticipated cuts to social spending in 2017 and 2018 will raise the risk of civil unrest.

To get detailed information on any of these countries, please click on the respective country's name or visit the JLT Specialty Limited website.