While there seems to be little academic research which addresses the impact of economic crises on conflict, fragility and social stability, it has been widely discussed in the media recently. According to a recent US Senate intelligence briefing, almost a quarter of all countries have already experienced low-level instability, such as changes in government and anti-state demonstrations. While most countries will be able to mitigate the impact of the crisis in the short-term, many countries in Latin America, and sub-Saharan Africa, as well as the former Soviet Union states, lack sufficient cash reserves, access to international aid or credit, or other coping mechanisms to do the same. There is concern that should the crisis persist over one or two years, the danger of regime-threatening instability will increase.
Additional issues highlighted by the media include the threat of rising nationalism and increasing protectionism against international trade. Rising unemployment could also lead to an increase in the power and activities of organised crime groups controlling parallel economies. One of the biggest threats is considered to be the collapse of regimes in countries such as Egypt and Pakistan, both of which have experienced food riots in the last year.
One of the recurring lessons and recommendations common to both the historical and current literature is the importance of social insurance systems to mitigate the effects of economic crises. Many developing countries don’t have social assistance schemes or unemployment benefits, and traditional welfare mechanisms have often been weakened in the course of economic growth and modernisation.