Political unrest refers to a state of dissatisfaction and agitation that can lead to protests, strikes or even revolutions. This type of societal conflict typically results from oppression, inequality or political corruption and can have severe implications for the economy.
In a political system with weak checks and balances, power can be concentrated in the hands of few individuals or groups and government oversight becomes less effective. A lack of transparency can also erode a country’s legitimacy and inspire resentment among its citizens. As a result, political instability can fuel cultural tensions, which may be exploited by demagogues and nationalists seeking to gain political and economic gains through scapegoating.
Economic dissatisfaction also motivates protests and resistance movements. The rising costs of utilities, stagnant wages and measly pensions can aggravate social discontent and generate political unrest. This is particularly true in countries that are moving towards globalisation and are experiencing rapid economic change. For example, protests in Chile over increased subway fares became part of a wider wave of unrest that was triggered by the increasing cost of living.
High unemployment rates can also trigger political unrest as people lose faith in the ability of their government to create jobs and improve the economy. This can lead to a vicious circle where a lack of opportunities prompts more people to leave the workforce, creating further pressure on the job market and lowering productivity. Moreover, a country’s reputation as a source of instability may cause its trading partners to restrict trade or impose sanctions, further impacting the economy.