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Thailand falls 5 places in investment risk rankings

Apr 11. 2012
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By The Nation

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Thailand is ranked the 47th-safest investment destination in Euromoney magazine's latest survey of country risk.

This marks a fall of five places as the Kingdom received deteriorating scores for political risk after the election of Yingluck Shinawatra as prime minister last July.

Meanwhile, Singapore is ranked the third-safest investment destination in Asia, followed by Hong Kong, in a long-standing survey that ranks countries and territories according to economists’ and risk specialists’ perceptions of economic, political and structural risk.

Both Singapore and Hong Kong are now considered safer than Germany, the United States and Britain by participating economists.

Taiwan and Japan are ranked third and fourth respectively in the region, with both jurisdictions receiving improved ratings from economists in the past 12 months.

However, India, Vietnam, Thailand and Sri Lanka all bucked the positive Asian trend.

More than 400 economists and country-risk specialists from a range of financial institutions take part in the Euromoney survey, evaluating the risks faced by international investors in more than 180 markets.

The experts were asked to score each country or territory out of 10 across 15 variables of sovereign risk, including metrics such as bank stability, government finances, hard and soft infrastructure and institutional risk. Each variable was then weighted to give an overall score out of 100 (100 = no risk; 0= maximum risk). The expert scores were then averaged to provide a country risk score.

The first-quarter results indicate that Singapore, which has been the highest-rated Asian sovereign market in the poll since 2010, is now considered one of the safest investment destinations in the world, having climbed three places in 2011 to third globally, with a score of 88 out of 100.

Singapore is now rated ahead of Luxembourg, Sweden and Canada in the ratings, thanks to strong scores for both economic and political risk. The island state is also considered to have the most stable banking sector in the region, ahead of Macau in second place.

China

Mainland China, which came 35th globally with a score of 62 out of 100, has also performed well, rising five places in the past 12 months. It ranked ahead of Italy and Spain but behind Saudi Arabia, Israel and Qatar in the global survey.

China’s scores in the economic section came under pressure in the first quarter as economists lowered their scores for economic outlook and bank stability after the softer economic data from that country in the last six months.

South Korea, Malaysia and Taiwan also performed well in the rankings, each rising by more than one place since March 2011.

India’s country-risk ranking declined seven places after it received declining scores for political and economic risk.

Vietnam fell 14 places after receiving declining scores in the survey indicators for economic outlook, monetary policy/currency stability and bank stability since March 2011. The country is currently rated 85th globally, alongside Ghana and Mongolia.

Sri Lanka’s country-risk ranking fell nine places in the past 12 months as economists awarded the country lower scores in the indicators for corruption, institutional risk, regulatory policy environment and government stability.

It now ranks 81st globally, below Azerbaijan and Serbia.

North Korea and Laos are considered the continent’s riskiest countries by participating experts.

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