Volatile elections are a perennial hazard for emerging markets debt investors, yet it is not polls that present the greatest political risk next year but protests by disgruntled, tech-savvy youthful populations: Generation Z.
Much of Gen Z has reached adulthood and the rest are close. They grew up in a turbulent era: Trump and Brexit in the mid-2010s, the Covid-19 pandemic, Russia’s invasion of Ukraine and the subsequent inflation and other economic shocks.
Youthful protestors have toppled governments in Madagascar and Nepal in 2025, and protests elsewhere have forced major concessions. Only on Thursday did the Bulgarian government pull its budget after thousands of protestors descended on Sofia, just weeks before the country is set to join the euro.
It is a matter of time before Gen Z rises in the biggest economies in EM. Corruption, limited press and political freedom, anaemic growth and the lack of jobs that have fuelled many of the protests are endemic to varying degrees in many of them.
They're far from absent in developed markets either but emerging economies are particularly vulnerable for two reasons. The first is that many have youthful populations led by ageing political elites.
Cameroon is a textbook example. It has experienced Gen Z-led protests this year in response to alleged electoral fraud. Cameroon is led by 92-year-old Paul Biya, president since 1982 and prime minister for seven years before that. The median age of Cameroon was 19 in 2024, according to the CIA World Factbook. Biya came to power while Gen Z’s parents were still in nappies, let alone Gen Z itself.
The second is that many large EM economies face fiscal pressure. Think Brazil, Colombia or South Africa, or in Europe Romania, Poland and Hungary.
Fixing this requires austerity, tax rises or both — never popular, particularly if a political class is regarded as corrupt, aged and out of touch.
While all that may be nothing new, what is different this time is the nature of the protests. Their genesis is on social media, and they often have no political figurehead. They are much harder to predict and to put down, and can erupt seemingly almost at a moment's notice.
The flash mobs that Gen Z's parents will have enjoyed in the first, youthful days of the internet are now in their turbulent, adolescent form. Investors crave certainty many EM economies are entering an era of spontaneous, unpredictable political and social disruption, every bond buyer's worst nightmare.