The Country Risk Index brings together various metrics to give a score and assess an individual country relative to its neighbors and the world. Riskyness can be thought of from an investments, travel, or conflict perspective. It is meant to provide a baseline and starting point for more vigorous research.
Definitions of Metrics:
Business Conditions: This metric measures the overall riskyness a country has for starting and maintaining a business and takes into account -
- Length of time to start a business,
- The market diversity,
- Intellectual property protections,
- Entrepreneurial spirit,
- Aggregate tax rate, and
- The proportion of GDP spent of R&D.
Economic Outlook: This metric measures the country risk to economic success for a country and takes into account -
- GDP growth,
- 10-year Treasury credit rating,
- Labor Force Participation Rate growth,
- Change in inflation rate,
- Remittance reliance,
- Foreign Direct Investment inflow,
- Interest payments on debt to government revenue ratio,
- Gross savings rate,
- Change in interest rates,
- Trade reliance,
- Tariffs,
- Change in non-performing loans to total loans, and
- GDP per person working
Health Conditions: <under construction> This metric measures how a country's health institutions effect the risk of a country and takes in to account -
- A country's Aging populations,
- Percentage of population with access to healthcare,
- Life expectancy,
- Percentage of pregnant woman receiving prenatal care,
- Infant mortality rate,
- Aids rate, and
- Fossil fuel reliance.
Political Institutions: This metric measures a country's political institutions. It should be noted that democracy and the rule of law are weighted heavily so a country that expresses those values will have less risk. It takes into account -
- A country's adherence to the rule of law,
- Ability to distribute resources,
- Literacy rate,
- Corruption,
- Educated workforce,
- United Nations Membership status,
- WTO membership status,
- Military capability,
- Income disparity,
- Intergenerational income elasticity (economic mobility),
- Democratic outlet, and
- Gender equality.
Coming Soon: Geography and Catalyst Resilience
Methodology:
Each metric is a weighted average of each of the points taken into consideration. Various methods were used to normalize each of the points. In the future Monte Carlo Simulations will be integrated to create a better predictive outlook.