Country Risk Analysis

Presented to
Prof. Muhammmad Tayyab

Presented By
Ramzan Idrees
Usman Khan
M.COM 4th
(University of Central Punjab)
Country Risk

A collection of risks associated with investing in
a foreign country. Country risk varies from one
country to the next. Some countries have high
enough risk to discourage much foreign
investment.
Risk Types
Political Risk
Confiscation : Is a process of a Government taking
ownership of a property without paying any
compensation.
Expropriation : The Government takes ownership
and offers some compensation
Nationalization : Involves government ownership
and it is the Government itself that operates the
business being taken over.
General Instability Risk : In relate to the uncertainty
of the future viability of a host countrys political
system.


Financial Risk Factors

Financial distress
Additional host government restrictions
Interest rates, exchange rates and inflation
A recession can severely reduce demand.

Economic Risk
Some consumers may be very loyal to
homemade products
Corruption can increase the cost of conducting
business or reduce revenue.

Bangladesh

Exchange rate is change day by day
Inflation rate is very high so the raw material which is
use the price is high
Interest rates is charged high in the financial institution
The political parties makes policy opposite each other
The Regulatory risk is very high
The financial sector is not strong
Retained profit [reinvestment] in the Bangladesh the
government restrict the transfer of fund for the other
country
Debt the financial intuition in not strong and also to fill
the requirement of the loan is very high so the debt taken
is difficult

Market entry is very difficult
Tax collection rate is very high rate of tax impose
Difficulties faced in transferring remittances for
one country to another country
Migrant workers in recent period the skilled
worker is going abroad
Electricity supply is the other problem of the
Bangladesh
Diesel price is very high day by day to the price
of the raw material is also high

India
The governance is not good the policy which they make they not
properly implement and not properly checked
Quality of the raw material is very low
Inflation rate is very high so the raw material price is high day by
day
Fiscal policy is not could the unemployment is very high and money
circulation in not well
Rapid population growth is very high so the living standard is not
better
The main business is start by the large families
Lack of housing facilities is the other major problem of the country
Gambling problem is very high in the country
Copyright is the common problem in the country
High inflation in the India

Afghanistan

Nationalization
Local content/local buying/local hiring laws is not properly implement in
the country
Discriminatory taxes is very high charged in the country
Joint-venture pressure is the other major problem of the country
Import/Export restrictions is the other major problem in the country
Profit repatriation restrictions is the other major problem of the country
they say the investor to invest in his country
Selective boycotts is the other major problem of the country
Price in not properly controlled in the country
Terrorism is very high in the country
debt problem is the other major problem in the country
Wars or involvement in foreign conflicts...
Relations with neighbors is not good
Military or political control is not well
Corruption is very high in the country

Pakistan
Political condition is not good in the country
Inflation rate is very high in the country
Terrorism is high in the country
The country people Religious nature
Poverty is high in the country
The war in the border of the country
Raw material shortage is the other major problem of
the country
Price high is the other major problem of the country
Tax is high charged


Best country for investment is the
India because the

Population of the country is increase day by day
The technology of the country in goes rapidly
which is good for the business
Un employment high so the wage rate is low
Financial intuition is strong in the country