Table 1: Political Risk, Economic Risk and Financial Risk

The ICRG Rating System
% of
Economic expectations versus reality6%
Economic planning failures6%
Political leadership6%
External conflict5%
Corruption in government3%
Military in politics3%
Organized religion in politics3%
Law and order tradition3%
Racial and nationality tensions3%
Political terrorism3%
Civil war3%
Political party development3%
Quality of bureaucracy3%
Total Political Points50%
Loan default or unfavorable loan restructuring5%
Delayed payment of suppliers' credits5%
Repudiation of contracts by government5%
Losses from exchange controls5%
Expropriation of private investments5%
Total Financial Points25%
Debt service as a % of exports of goods and services5%
International liquidity ratios3%
Foreign trade collection experience3%
Current account balance as % of goods and services8%
Parallel foreign exchange rate market indicators3%
Total Economic Points25%
Overall Points100%

Last Updated: May 30, 1996

Analyst/Contact: Campbell R. Harvey

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