1. Country risk model containing political, social, and economic/financial variables with a total rating value of 100 points.
2. The variables represented "political risk" defined in terms of outcome losses covered by political risk insurance.
3. A score of zero meant no risk, the max score meant max (prohibitive) risk.
4. Variables (weight): bad neighbors (3), authoritarianism (7), staleness (5), illegitimacy (9), generals in power (6), war/armed insurrection (20), urbanization pace (3), Islamic fundamentalism (4), corruption (6), ethnic tension (4).
1. Political risk (22% of the composite).
1.1 Political stability (war, social unrest, orderly political transfer, politically motivated violence; and international disputes).
1.2 Political effectiveness (change in government orientation; institutional effectiveness; bureaucracy; transparency/fairness; corruption; and crime).
2. Economic policy risk (28%).
2.1 Determined with 27 variables in five categories: monetary policy; fiscal policy; exchange rate policy; trade policy; and regulatory environment.
3. Economic structure risk (27%).
3.1 Incorporates global environment, growth, current account, debt, and financial structure groupings with 28 variables.
4. Liquidity risk (23%).
4.1 Covers 10 variables of currency conditions.
1. Business Environment Risk Intelligence (BERI) is a country risk model based on a set of quantitative indices.
2. Profit Opportunity Recommendation (POR) is a macro risk measure; an average of 3 ratings, each on a 100-point scale. Represents all aspects of country risk:
2.1. Political Risk Index (PRI) is composed of ratings on 10 political and social variables.
2.2. Operations Risk Index (ORI) comprises 15 political, economic, financial, and structural variables.
2.3. R Factor (Remittance and Repatriation), a weighted index covering the country's legal framework, foreign exchange, hard currency reserves, and foreign debt.
3. Risk is calculated for the present, as well as one-year and five-year frames.