The imprecise science of revolting indexes | FT Alphaville

The imprecise science of revolting indexes

It’s the perfect season to roll out what TheSource calls a “revolting index”. As the blog’s Alen Mattich remarks, investors — not just autocrats — are also spending “a lot more time these days looking over their shoulders”, amid the wave of rebellion and revolution sweeping North Africa and the Middle East.

The Economist came out with a “who’s next” index of the Middle East and North Africa in early February, concluding that the next leader to go could be Yemeni president Ali Abdullah Saleh. Indeed, although Muammer Gaddafi is looking very precarious right now, Saleh is neck-to-neck with the Libyan leader in a race towards the political precipice. In fact, on Sunday Saleh even borrowed the good Colonel’s words, vowing to fight “with every drop of blood” to stay in power.

The Economist’s list of “vulnerable” countries was based on perceived levels of democracy, corruption and press freedom: But as BigPicture pointed out, it didn’t take into account unemployment.

Citing Alternet, BigPicture notes that Arab countries have among the highest unemployment rates in the world — an average of 14.5 per cent in fiscal year 2007/08 compared with the international average of 5.7 per cent, according to Arab Labour Organisation figures. The rates may even be higher, it adds, “if one accepts unofficial estimates”.

So a week later, the Economist then came up with a revised index, this time called the “shoe thrower’s index” (referring to one of the strongest signs of disrespect in the Arab world).

That index, led by Yemen, with Libya a close second and Qatar last, gives a 35 per cent weighting to the share of the population under 25; 15 per cent to the number of years the government has been in power; 15 per cent to both corruption and lack of democracy, as measured by existing indices; 10 per cent to per capita GDP; 5  per cent to an index of censorship and 5 per cent for the total number of people under 25:

TheSource’s Mattich takes a different approach and looks world-wide with his “revolting index” of likely candidates for political uprisings. He uses three equally-weighted criteria: social unfairness; propensity to revolt; and a “trigger” based on the proportion that food accounts for in total household expenditure.

Kenya and Cameroon lead his top 10 potential hot spots, followed by Pakistan, Nigeria, Indonesia, Morocco, Jordan and Azerbaijan. Libya, Egypt, Algeria and Tunisia are in the next 10, together with Vietnam, India and Uzbekistan. The top 30 is then made up of countries including Colombia, South Africa, Iran, Venezuela, Belarus, China, Kazakhstan and Brazil.

Saudi Arabia is 39 out of the 85, Russia is 40 and Kuwait is 51. The highest-ranked EU country is Romania at 37.

Investors might also be interested to know which countries rank as the least (potentially) revolting countries. Sweden can be proud of its bottom place, followed by Austria, Canada, Denmark and Germany. In terms of oil producers, Norway, Qatar and the UAE rate as reasonably stable.

But one small warning, adds Mattich, “to anyone who thinks this is a cast-iron academically certified diagnostic tool: it’s not”: Not that that means the streets of Stockholm are likely to be running with blood any time soon.

Related links:
In-depth: Middle East protests – FT
Max Rodenbeck: Volcano of rage – NYRB
History’s shifting sands – Al Jazeera