Country risk September 2009: A world in flux
With the international economy more volatile than ever, global investors are paying more attention to country risk analysis. Risk looms both where you most and least expect it. In Euromoney’s latest rankings, the US has fallen out of the top 10. Jacqueline Cutler reports.
IN THE INCREASINGLY interdependent global economy, country risk is spreading and transferring among nations at unprecedented rates. The size and speed of international financial integration and global capital mobility impose greater economic and political risks on all countries involved. Particularly over the past 18 months, we have learnt that no country is immune to the financial, macroeconomic or geopolitical shocks of other regions.
Since Euromoney’s last country risk survey in March, nations have soared and slipped in the rankings more than ever before. The velocity of change is astounding: in the past, a country would move 10 places in 10 years; now, we are seeing nations jump as many as 30 slots in six months.
Gabriel Stein, director and chief international economist at Lombard Street Research, says: "The pace of change is due to globalization. As countries become more and more integrated, a lot of differences are arbitraged out. Even small political or economic differences may mean large changes in the rankings."