Ground-breaking study finds which countries are the winners and losers of pandemic recovery

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Global markets analysed post pandemic: Grapes of Wrath or Great Gatsby?

London: Tina Fordham, partner and Head of Global Political Strategy at Avonhurst has updated her ground-breaking ‘Vox Populi’ study to analyse the global markets in the aftermath of Covid-19 which will be published and available from 25 March 2021. Avonhurst is a political strategy, legal advisory and capital services firm based in London.

Fordham’s original study, ‘Vox Populi’, was published in 2013 and has since won widespread recognition for its prescience, including predicting the rise of populism and figures such as President Trump. The new study, ‘Vax Populi’, uses OpenSource data to compile and analyse different variables to predict the post-pandemic recovery rate for 30 countries, including the UK. Fordham’s co-author on the report was Dr Tsveta Petrova, Avonhurst’s Data and Innovation Advisor.

Fordham comments: “The data has already thrown up significant findings as to ‘winners and losers’ of the pandemic, with lower risk levels in Asia, the UK and Northern Europe, whereas there is more cause for concern in the US, Brazil, Turkey, South Africa, Russia, and Central and Southern Europe.

“We’ve also found that, in contrast to conventional wisdom, regime type – that is, whether a country is a democracy or has an authoritarian regime – does not significantly impact its risk trajectory. Instead, the presence of trust in government and institutions and low prevalence of conspiracy theories matter more.”

‘Covid-19 not a Black Swan’

Fordham continues: “Covid-19 was no ‘Black Swan’ and was probably not even ‘the big one’. This suggests that it’s time for the concept of ‘VUCA’ (the US military acronym for ‘Volatility, Uncertainty, Complexity and Ambiguity’) to move over and make way for a more comprehensive, holistic approach to political risk that goes beyond elections and regulation.”

‘Vaccine wars’ and no fast return to normal

Fordham and Petrova argue that, contrary to market expectations for a swift return to the pre-crisis status quo, investors should be prepared for a multi-year, non-linear adjustment period. The near future sees the continued risk of populism, mass protests and political extremism in what the authors call ‘High VAX Populi’ states (as shown in the accompanying ‘heat map’).

Fordham also noted that vaccine disinformation was fast emerging as a new geopolitical weapon, and that vaccine-related economic nationalism could worsen trade and security disputes, as is happening already between the UK and Europe, and the US and China.

The report avoids common complacencies that have seen market commentators rush to categorise the next decade as either the new ‘roaring twenties’ or the next Great Depression, providing a more nuanced and measured analysis. It also offers some surprising findings about variables between countries – including how the British may be positioned for a stronger recovery.

Fordham comments: “For some, the post-lockdown period will feel like something out of The Great Gatsby. But for many, it could be more like The Grapes of Wrath, unless steps are taken to address inequalities – which accelerated during the pandemic – and the gaps in the social safety net.

Jonathan Bloom, Chief Executive of Avonhurst, comments: “With widespread political uncertainty in the face of an era-defining pandemic, our client base is seeking guidance in the area of political risk now more than ever. They are not looking for generalisations, they want bespoke in-depth risk analysis and advice. As a political strategy and legal advisory firm focused on serving our sophisticated capital client base, we are excited to publish this ground-breaking study from a recognised industry leader in political risk analysis. This new insight will provide another tool for Avonhurst clients to navigate uncertainty during the next phase of the pandemic.

Launched in July 2019 with a substantial client portfolio, Avonhurst is dedicated to meeting the changing needs of sophisticated capital by providing a bespoke offering comprising legal, legislative / political risk advisory and capital services. A group of market-leading founders and influencers from the legal world have created a revolutionary advisory business dedicated to helping funds, capital providers, corporate borrowers and issuers, and secured lenders, navigate the complexities of ever-changing markets.

Just one year on, the firm’s unique combination of offering legal advice with political analysis was recognised with the firm being named as a finalist in the 2020 Financial Times Innovative Lawyer Awards and the British Legal Awards for ‘Boutique Law Firm of the Year 2020’.

Tina Fordham has been named in the Top 100 Geopolitical Experts (alongside Condoleezza Rice) and the FN’s Top 100 Most Influential Women in European Finance. Her ground-breaking career includes being appointed to the United Nation’s first High-Level Panel on Women’s Economic Empowerment (which also included IMF president Christine Lagarde), and speaking at the United Nations, Davos, the Milken Institute, World Bank, and Fortune Most Powerful Women, as well as serving on the International Advisory Boards of the think tank Carnegie Europe, and the School of International and Public Affairs at Columbia University