Page 49 - Theoretical and Practical Interpretation of Investment Attractiveness

risk (based on 10 political and social indicators), operational risk (based on 15 economic,
financial, and structural indicators assessed by experts), and the R-factor (assessing the
existing legal system, exchange rate, currency reserves, and external debt).
BERI scale. The minimum level of risk on the BERI scale is 100, while the maximum
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level is 0. The forecast for the risk level is made for 1 and 5 years .
Control Risks Group (CRG). The CRG conducts assessments of political risks (these
assessments are carried out for 118 countries) based on expert opinions. Based on expert
opinions, the final risk level can be classified as "very low," "low," "moderate," "high," or
"very high." Forecast scenarios are developed based on expert opinions .
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Economist Intelligence Unit. The assessment of country risk is carried out for 100
countries and is based on the following four components: political risk (22% of the total score;
consisting of 11 indicators), economic policy risk (27% and 28 indicators), and liquidity risk
(23% and 10 indicators). The resulting score for the risk is translated into a letter scale (A-E)
based on a scale of 0 (lowest risk level) to 100 (highest risk level) .
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Euromoney. Euromoney assesses its country risk level based on 9 categories:
economic data (25% of the assessment), political risk (25%), debt indicators (10%), unpaid
or delayed debts (10%), credit rating (10%), potential use of bank assets (5%), potential use
of short-term finance (5%), access to the capital market (5%), and guarantees for forfeiting
(5%). Political risk is assessed on a scale of 0 (highest risk level) to 10 (lowest risk level)
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based on expert opinions .
Institutional Investor (II). The assessment of risk level (payment capacity) is carried
out by II based on expert surveys (conducted for 135 countries) and identifies and assesses
the most important factors for risk. The resulting assessment is compared with expert opinions
and presented in an average indicator.
The final rating ranges from 0 (very high likelihood of non-performance of obligations)
to 100 (very low likelihood of non-performance of obligations).
International Country Risk Guide (ICRG). The ICRG assesses country risk for 140
countries. This model evaluates the structural components of country risk, namely political
(50 out of a total score of 100 bands, 12 indicators), financial (25 out of 100 bands, 5
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indicators), and economic (25 out of 100 bands, 5 indicators) risks .
Moody's Investor Service. Moody's assesses the independent credit risk of a country
based on analysis of both political (6 indicators) and economic (7 indicators) conditions. The
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resulting risk level is expressed on a letter-digit scale ranging from AAA to C .
Political Risk Services (PRS). PRS assesses risks for investors in two stages. In the
first stage, using the Prince method, the future regime in the country is forecasted. In the
following 18 months and 5 years, various scenarios of events are considered, with a focus on
scenarios with high probability.

63 http://www.beri.com/Publications/BRS.aspx
64 https://www.controlrisks.com/en/services
65 https://www.eiu.com/home.aspx
66 https://www.euromoneycountryrisk.com/
67 http://www.institutionalinvestor.com/Research-and-Rankings.html
68 https://www.moodys.com/researchandratings?lang=en&cy=aus
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