ICRG/PRS

PRS: International Country Risk Guides


   1. Each report provides the current level and likely change of risk indicators for 18-month and 5-year time spans.

   2. 18-month (12 indicators): political turmoil; equity restrictions; operations restrictions; taxation discrimination; repatriation restrictions; exchange controls; tariff barriers; other import barriers; payment delays; fiscal and monetary expansion; labor policies; foreign debt.

   3. 5-year (4 indicators): investment restrictions; trade restrictions; domestic economic problems; international economic problems.


International Country Risk Guide (ICRG) variables and their weighting in the index:


   1. Political: government stability (12); socioeconomic conditions (12); investment profile (12); internal conflict (12); external conflict (12); corruption (6); military in politics (6); religious tensions (6); law and order (6); ethnic tensions (6); democratic accountability (6); bureaucracy quality (4).

   2. Financial: foreign debt as a percentage of GDP (10); foreign debt service as a percentage of XGS (Exports of Goods and Services) (10); current account as a percentage of XGS (15); net liquidity as months of import cover (5); exchange rate stability (10).

   3. Economic: GDP per head of population (5); real annual GDP growth (10); annual inflation rate (10); budget balance as a percentage of GDP (10); current account balance as a percentage of GDP (15).


Examples of Factors Used to Generate Estimates


   Government policies related to:

         1. Limitations on equity (i.e. foreign ownership).

         2. Restrictions on and interference with corporate operations.

         3. Discriminatory taxation or tariffs.

         4. Non-tariff barrier discrimination.

         5. Restrictions on profit repatriation.

         6. Currency exchange restrictions or controls.

         7. Wage fluctuations.

         8. Fiscal and monetary policies.

         9. Magnitude of foreign debt.