Country risk: How the mighty are falling

September 01, 1998

It's a measure of the turmoil in world markets that not a single bank was at first prepared to supply the forfaiting rates used by Euromoney in its calculation of these country-risk rankings. So fast were things changing that even these usually stable indicators became too volatile. Banks supplied them on request on a day-by-day basis to clients an indication of how difficult trade finance, the lubricant of the real economy, was becoming.

For historical country risk data please visit the Euromoney Country risk website

Country risk: Country risk revisited

Country risk: Reasons for big changes

Country risk: Methodology

The story of this year's table is Russia. The former superpower drops below even non-reformist ex-Soviet republics such as Uzbekistan, below Tajikistan, Pakistan and Kazakhstan. Default, particularly default accompanied by government threats to impose hyperinflation, scares away lenders and investors much more effectively than small size or straightforward poverty.

Japan too is starting to pay the price for the paralysis of its political process and the consequent stalling of banking and economic reform. The country is now in danger of losing contact with its supposed peers in the developed world. Similar falls by Thailand, Korea and China confirm economists' downgrades of performance for the rest of 1998 and while Malaysia's unorthodox economic protectionism is going down well in the country, its 18-place crash shows foreign institutions are getting anxious. Research by Rebecca Dobson

Japan too is starting to pay the price for the paralysis of its political process and the consequent stalling of banking and economic reform.

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Topics

Country Risk Survey Euromoney Country Risk Surveys September 1998