Investing in the Post-Recession World.....

Emerging market economies such as India are growing vigorously, offering hope for multinationals intent on expansion.....

 

Yet in virtually every country, negatives vie with positives, partly because of variation in how countries have managed the downturn. Are they stimulating their economies? Courting foreign direct investment? Imposing austerity?

Companies need a way to cut through the chaos and avoid pitfalls. Here we present a guide—based on an aggregation of political and macroeconomic factors—for determining where growth is likely, which governments are encouraging or impeding foreign investment, and which sectors in those countries provide the greatest opportunities.

Drawing on Eurasia Group’s political analyses and on economic databases from sources such as the International Monetary Fund, we assigned scores to countries on the state of the macroeconomy (which affects issues such as consumer demand, labor unrest, and exchange rate stability) and on foreign investment policy (which affects multinationals’ access to opportunities). 

 

We plotted the countries on a graph and divided them into four groups, ranging from least to most risky. Although other factors also matter to multinationals, we focused on those two issues because they are affected by political decisions, which can be difficult to comprehend and can change unexpectedly.