Christian Manrique’s new post
Christian Manrique unveils in this new post five country risk key performance indicators that any investor should keep in mind when selecting the most advantageous option among different possibilities.
Which are these KPI’s? How shall the most effective country risk be done?
The following are the five areas that must be taken into account. Scope, general financial and economic situation, political situation, ease to do business and conclusions will configurate the most detailed radiography to take a decision over one or another country.
As Christian Manrique brings up, to make it easier to everyone to understand the whole process a real case of study has been used as an example. To do it so, three countries from Eastern Europe have been taken: Bulgaria, Poland and the Czech Republic.
In this previous stage a selection is made among a wide range of countries and Bulgaria, Poland and the Czech Republic are chosen to see which one is the most suitable for Intelligent Infrastructures investments.
Once the group is already set up, starts a more detailed process. The KPI’s that are taken into account are GDP, Interest Rate and Gini Index. The Interest Rate is the amount of money paid within a time unit for every capital unit invested. The Gini Index is an inequality measure created by the Italian statistics expert Corrado Gini. Usually it is used to measure income inequality within a country, but it can also be used to measure any form of unequal distribution.
Among the three selected countries, the highest GDP growth has taken place in the Czech Republic. Although in Bulgaria it rose up last year, its political situation presents uncertainty due to its unstable Government.
As Christian Manrique points out, to come up with the most accurate analysis direct sources, non-bias studies, as well as those coming from known international and respected institutions with high standards in their publications, must be used. In this case an open source with a high reputation, the World Bank, has been chosen.
The most advantageous interest rate belongs to the Czech Republic, followed by Poland. Sources come from the United Bulgarian Bank (UBB), the polish bank Citi Handlowi and the Czech bank CSOB (Ceskoslovenska Obchodní banka).
According to the Gini Index, as the World Bank points out, the most egalitarian income distribution will be held by the Czech Republic.
To Christian Manrique, the main indicator that defines the political situation of a country with accuracy comes from the Governability Index. There are five variables required and are set by the World Bank as a reliable source. Within the three chosen countries, Czech Republic ranks better than Poland, although some of its indicators show worst results in the last years. Bulgaria is far beyond for all indicators.
Ease for doing business
Another KPI, as Christian Manrique points out, is the Ease for Doing Business Index, by the World Bank. According to this indicator, the best position is for Poland, followed by the Czech Republic and Bulgaria. Despite this rise, if the opening business variable is taken into account, the Czech Republic runs up to the first position.
Despite Poland ranking higher than the Czech Republic at the Ease for Doing Business Index, within the rest of KPI’s the Czech Republic has a clear advantage.
To Christian Manrique the main elements that have been taken into account comprehend its long industrial tradition, the high quality of manpower, geolocalization and a strong incentive investment plan.
Besides, infrastructures and innovation are sectors with still long development possibilities, according to World Bank Competitiveness Index.