After the stunning collapse of the Iranian regime in 1979, country risk analysts everywhere became desirous of some method to better calculate the risk of political instability in countries across the world. For many, the holy grail became some type of quantitative index that would rank countries based on their potential for instability. If the index were reliable, then the countries most at risk would be obvious, allowing for adequate and persuasive warning to decision makers in business and government. It always struck me that the analysts’ desire for a perfect quantitative instrument was a bit woolly-headed. We need skilled analysts precisely because reality is not obvious. If ever the day comes that facts speak for themselves, then it’s the job market for analysts that will become more fragile!
The Fragile States Index for 2017, the work of the Fund for Peace, does a good job both of arriving at compelling quantitative results AND of leaving room for analytic conjecture and insight. The countries at the top of the index offer no surprises this year—this list of difficult places to live includes South Sudan, Yemen, Somalia, and, of course, Syria. Afghanistan and Iraq secure their places in the most fragile Top Ten at spots 9 and 10, respectively. As measured by the index, neither Iraq or Afghanistan have shown much improvement in the past ten years, mostly moving up or down slightly within a narrow band of extreme fragility. It is painful to think about using the Fragile States Index to quantify the results the West has achieved there to date; according to one estimate the wars in Iraq and Afghanistan had cost the U.S. almost $5 trillion by the end of 2016.
Absolute rankings are not the most useful aspect of instruments such as the Fragile States Index. Rather, the volatility and direction of a country’s ranking usually offer more insight. For example, the Fund for Peace notes that Japan, Italy, and South Korea are among the ten “most worsened” countries in 2017, and the U.S. just missed that distinction, coming in at 14th. For the U.S. and many of the other countries whose standings declined, more factionalism and social division are to blame. The UK also is suffering from increasing divisions within its society and among its political elites. One country that has escaped this trend is France, which actually has become more cohesive in recent years, despite its difficult experiences with terrorist attacks. That’s why the Fund for Peace predicted before the French election that France would not follow the U.S. and UK in their adoption of more insular and populist policies.
The website for the Fragile States Index serves as a powerful analytic tool where analysts can manipulate the data, compare countries, and even adjust the weight attached to the 12 variables that comprise the index. By digging into the data, analysts will uncover dynamics that will intrigue and puzzle them. For me, I found myself wondering why:
- Kenya ended up ranking a full 36 places worse than Venezuela. When I examined Kenya’s score on the individual variables, it became clear that Kenya is penalized for its geographic neighborhood and its heterogeneous ethnic makeup. Venezuela doesn’t suffer from having to house refugees from Somalia, and its citizens, while conflicted, do not belong to multiple ethnic groups.
- Brazil cannot tolerate success, ranking fourth among countries that suffered the steepest decline from last year. I also found myself wondering about the correlation between hosting a Summer Olympics and subsequent poor performance in the Fragile States Index. Let’s see: London hosted in 2012 and Athens in 2004. Only Beijing seems to have escaped the Curse of the Olympic Rings.
- Pakistan’s status as the most improved nation on the Fragile State Index will endure. No matter how well designed, indexes can only track variables in tactical, superficial ways. Moving up three points in one year says little—one way or another—about the fundamental problems affecting a country such as Pakistan. Like Kenya, but even more so, Pakistan must succeed in a volatile neighborhood. Its ability to prosper requires more than just government competence and social cohesion. It requires luck.