7

The World Economic Forum released their Global Competitiveness Report yesterday and it offers a comprehensive view of individual country risk/reward. There has been an explosion of these types of indexes over the past few years.

The UN has its Human Development Index, the World Bank has its Ease of Doing Business report and there are dozens of other organisations producing such analysis and rankings.

My questions, given that there are over 200 country investment destinations and you might want to narrow that list down before conducting in-depth research:

  • Do you ever use these types of reports/indexes when conducting emerging market investment analysis?
  • Which reports/indexes do you find the most useful?
  • What sort of data/comparisons are most useful (health, education, tax rates, employment levels, that sort of thing)?
  • What data is missing that you would consider worthwhile?
3

Rather than using the Human Development Index or Ease of Doing Business, if you primary purpose is for investments, you need to consider the Country rating provided by various agencies like

  • Standard & Poors
  • Fitch
  • Moody's

These would tell as to how good the country is for investment in general. Just to highlight a difference, China may not fare very high in Human Development Index, however right now from investment point of view its a pretty good market. once you have decided the countries, you can either invest in funds specalizing in these countries or if legally permitted invest directly into the leading stock index in such countries.

If your intention is to start a business in these countries, then you need to look at some other indexes from the same [or other rating agencies] that would depict "ease of doing businesses".

  • Dheer, thanks for this. One of the reasons I didn't mention the rating agencies is that they use "closed" risk models. If you trust them and have a similar risk profile to that covered by the rating then use them, but what data is useful if you want to conduct your own risk analysis? – Turukawa Sep 13 '10 at 18:08

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