Country Risk Analysis •Presented to

Prof. Muhammmad Tayyab

Presented By Ramzan IdreesUsman KhanM.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 country’s 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