|Measuring the Impact of Unrest on Location Ratings.|
By Shona Whyte, Location Ratings Analyst at ECA
Thursday, 1st March 2012
Few people will be surprised to learn that the events of the so-called Arab Spring have affected the Location Ratings of many places in North Africa and the Middle East.
Watched across the world for the entirety of 2011 and into 2012, the uprisings have seen revolutionary waves of demonstrations and protests against dictatorships and absolute monarchies, human rights violations, government corruption, food price hikes and poverty as citizens bid for greater freedom and democracy.
Tunisia was the first country in which protests against poverty and corruption erupted, forcing long-term leader President Zine al-Abidine Ben Ali to resign in January 2011. Protests and violent counter responses were subsequently seen in Yemen, where violence continues; Egypt, where President Hosni Mubarak resigned in February; Syria, where the UN estimates the death toll of anti-government protests to be at least 4,000 and President Bashar al-Assad refuses to step down; Bahrain where confrontations continued into the end of 2011 despite King Hamad’s promises of reforms; and, of course, Libya, where demonstrations led to civil war and the death of Muammar Gaddafi.
Effect of unrest on living conditions
The revolutions have impacted on almost all aspects of life for people living in these places, and have naturally affected many of the factors ECA assesses for Location Ratings scores.
Arguably the most obvious scores to change were those for socio-political tensions as demonstrations and violence broke out, leading, in the case of Libya, and potentially in Syria, to civil war at which point the score for this factor can go no higher. The situation in these countries led to mass evacuations of assignees because it was simply too dangerous for them to stay.
With a city full of guns and a significant reduction in the rule of law, Tripoli has become much more dangerous for everyone. Consequently, the personal security score for the city has risen substantially this survey. Under Gaddafi an oppressive police presence had meant that street crime was kept at relatively low levels, and it is true of all locations where the regimes have been toppled that crime has increased.
ECA’s scores for the threat to personal security in Bahrain has not increased as much as in Egypt or Libya, partly because levels were already quite high but also because King Hamad still, for now, maintains control.
The recent unrest has also had an impact on our education scores. The situation in Tripoli led to the closure of international schools for the foreseeable future. Syria saw international schools remain open at the start of the academic year, but with many expatriates opting to leave posts while the country remains volatile, class numbers have dwindled and it remains unclear whether schools will remain open if the situation deteriorates.
During times of political tension and civil war there is likely to be a reduction in the quality and availability of healthcare.
Again, Tripoli is the most obvious example, as medical staff were caught up in the conflict and hospitals were filled with injured demonstrators and rebel fighters. Sana’a, Yemen, saw the closure of a number of medical facilities and health risks were exacerbated by the fighting. Our healthcare scores for these locations were increased to capture this.
Assessing likelihood of events
ECA’s Location Ratings enable companies to establish allowances to compensate staff for the difficulties of adapting to living in their assignment location. They are reviewed once a year, and are designed to be used in conjunction with an annual salary review. To ensure a consistent and defensible approach, assessment is made that reflects the on-going impact on living conditions, rather than as a ‘knee-jerk’ reaction to sudden disasters or unrest without due consideration.
Where there is a known on-going risk our scoring system recognises this. Some factors are more predictable than others when assessing a location’s score. Japan, for example, sits within the ‘ring of fire’, a notorious zone where 90% of the world’s earthquakes occur. .
While devastation can at times occur on a greater scale than is usual – as we tragically saw last year – earthquakes are to be expected and the likelihood of this is factored into the natural disaster element of our existing score for the country. In this instance, score changes are more likely to be witnessed in factors affected by the knock-on effect of such a disaster such as infrastructure or utilities.
Predicting political change is more difficult. The situation can change greatly in the space of 12 months and the outcome of political upheaval for assignees can be dramatic. The overthrow of an autocratic regime can see the personal security score rocket, as has been the case in Libya and Egypt, and the socio-political tensions score may also increase as the country transforms from a tyrannical yet stable regime to one of violence, civil war and uncertainty.
When an incident occurs, be it an uprising, terrorist attack or a natural disaster, we are often asked whether location (hardship) allowances should be increased. ECA’s position is that this may not be the most appropriate thing to do. A location allowance is in no way supposed to be used as ‘danger money’ and raising an allowance as a direct response to a situation may suggest that it is. Practical support in the form of added security, say, or evacuation, might be a better response.
Reimbursing assignees for expenses incurred through temporary relocation, for example, would be appropriate as it would for any measurable extraordinary cost incurred. Any other, on-going consequences of an event will be reflected in the new location rating provided by ECA, and an increase can then be awarded at the pre-set review time (unless this allowance has already reached a ceiling or the scores used by the system are already at maximum level). You could consider back-dating any lift to the date of the event.
If you are reluctant to award your assignees no immediate rise, consider at least providing a separate allowance with a clear description of what it is for and what its duration will be (e.g. for as long as a security alert is in place).
That way, it will be simpler to remove again when a situation returns to normal, without affecting the on-going payment of the location allowance.
While greater freedom for the people of these countries and more democratic forms of government is the desired outcome of these revolutions for many, there is also the potential for civil war to break out or for the emergence of similarly autocratic regimes under which restrictions on freedoms could be re-imposed.
Egypt has had its first elections, with the formerly banned Muslim Brotherhood taking the majority, and presidential elections are scheduled to follow in June. However, frustration with the slow pace of change and the level of power still held by the army has led to new clashes between security forces and protestors.
In Libya much of the population remains armed and issues such as the growing crime rate need to be tackled. At present, the National Transitional Council holds power, promising to move Libya towards elections, but the risk of internal conflict is still present. Violence continues where protests have not toppled presiding leaders and a sense that transition is happening too slowly in Sana’a and Bahrain has prompted further demonstrations there.
Civil war in Syria is a strong possibility, and there has been growing international pressure for President Bashar al-Assad to step down. He has refused to do so.
The Arab Spring uprisings have been dubbed by some as ‘twitter revolutions’ because of the role played by social media, a significant point because in most of these countries there were previously heavy media restrictions. Media censorship and availability of international news coverage are factors we also measure when calculating the scores. It remains to be seen whether these revolutions will have a long-term impact on media controls in these countries and whether restrictions will be permanently lifted.
Or whether other countries will tighten controls to prevent the same thing happening, or ease restrictions in the hope of preventing similar protests. Comparable situations are emerging elsewhere. Russia is set to hold presidential elections later in 2012 and protests have already begun against Vladimir Putin and his United Russia party, amid accusations of fraud during parliamentary elections last year.
Further demonstrations are being organised through Twitter and Facebook. It is unclear to what extent these have been influenced by events in the Middle East but the Russian leadership is aware of the potential outcome, tripling army salaries and increasing police and military presence in Moscow during the election period.
Whatever does ensue in Russia and elsewhere, clearly there is a lot to keep an eye on as 2012 unfolds.
ECA was established in 1971 by a number of leading international companies. Its purpose was, and still is, to provide employers with information and advice on terms and conditions for staff employed abroad, whether local national or expatriate. ECA has Locations Ratings for 434 locations across 214 countries. ECA subscribers can access the latest Location Ratings reports from MyECA. Alternatively, location allowance calculations can be purchased from the Remuneration and allowances section of ECA’s online shop.