Market participants should use caution when investing their money outside of the G7 as capital is scarce, mobile, and sensitive. Country specific risk can play a huge role in determining investment returns due to unstable political environments and poor economic conditions.
In addition to political and economic risk, a country’s legal and default risk must also be analyzed. The following list was compiled by analyzing all these factors together to estimate a risk premium (the extra risk in a given market). The U.S. served as the baseline used for measuring the extra risk in each country. See the graphic below and the country list below the graphic for a listed ranking of countries.
- Belarus: 24.8%
- Sudan: 24.8%
- Syria: 24.8%
- Venezuela: 24.8%
- Lebanon: 24.8%
- Argentina: 18.2%
- Ukraine: 18.2%
- Sri Lanka: 18.2%
- Ghana: 18.2%
- Cuba: 18.2%
- North Korea: 18.2%
- Zambia 18.2%
- Russia: 18.2%
- Haiti: 18.2%
- Malawi: 18.2%
- Somalia: 18.2%
- Sierra Leone: 18.2%
- Laos: 15.2%
- Ecuador: 15.2%
- Liberia: 15.2%
- El Salvador: 15.2%
- Suriname: 15.2%
- Myanmar: 15.2%
- Pakistan: 15.2%
- Yemen: 15.2%
- Tunisia: 13.7%
- Belize: 13.7%
- Congo: 13.7%
- Ethiopia: 13.7%
- Guinea: 13.7%
- Mali: 13.7%
- Mozambique: 13.7%
- Barbados: 11.4%
- Bolivia: 11.4%
- Nigeria: 11.4%
- Iraq: 11.4%
- Gabon: 11.4%
- Maldives: 11.4%
- Zimbabwe: 11.4%
- Burkina Faso: 11.4%
- Solomon Islands: 11.4%
- Egypt: 9.9%
- Cape Verde: 9.9%
- Swaziland: 9.9%
- Tajikistan: 9.9%
- Moldova: 9.9%
- Angola: 9.9%
- Bosnia & Herzegovina: 9.9%
- Kenya: 9.9%
- Nicaragua: 9.9%
- Niger: 9.9%
- Togo: 9.9%
- Iran: 9.9%
- Turkey: 9.9%
- St. Vincent & the Grenadines: 9.9%
- Madagascar: 9.9%
- Mongolia: 9.9%
- Kyrgyzstan: 9.9%
- Moldova: 9.9%
- Jamaica: 8.4%
- Gambia: 8.4%
- Rwanda: 8.4%
- Guinea-Bissau: 8.4%
- Cook Islands: 8.4%
- Uganda: 8.4%
- Bahrain: 8.4%
- Tanzania: 8.4%
- Cambodia: 8.4%
- Papua New Guinea: 8.4%
- Costa Rica: 8.4%
- Cameroon: 8.4%
- Jordan: 6.8%
- Namibia: 6.8%
- Benin: 6.8%
- Montenegro: 6.8%
- Fiji: 6.8%
- Honduras: 6.8%
- Bangladesh: 6.8%
- Albania: 6.8%
- Benin: 6.8%
- Macedonia: 5.5%
- Dominican Republic: 5.5%
- Algeria: 5.5%
- Armenia: 5.5%
- Greece: 5.5%
- Cote d’Ivoire: 5.5%
- Uzbekistan: 5.5%
- Senegal: 5.5%
- St. Maarten: 4.6%
- Trinidad & Tobago: 4.6%
- Oman: 4.6%
- South Africa: 4.6%
- Vietnam: 4.6%
- Brazil: 4.6%
- Serbia: 4.6%
- Georgia: 4.6%
- Guatemala: 3.8%
- Azerbaijan: 3.8%
- Morocco: 3.8%
- Sharjah: 3.8%
- Paraguay: 3.8%
- Cyprus: 3.8%
- Montserrat: 3.3%
- Mauritius: 3.3%
- India: 3.3%
- Italy: 3.3%
- Romania: 3.3%
- Curacao: 2.9%
- Panama: 2.9%
- Libya: 2.9%
- Portugal: 2.9%
- Mexico: 2.9%
- Uruguay: 2.9%
- Kazakhstan: 2.9%
- Philippines: 2.9%
- Mexico: 2.9%
- Indonesia: 2.9%
- Andorra: 2.9%
- Hungary: 2.9%
- Croatia: 2.9%
- Aruba: 2.9%
- Columbia: 2.9%
- Turks & Caicos: 2.4%
- Spain: 2.4%
- Guyana: 2.4%
- Thailand: 2.4%
- Peru: 2.4%
- Bulgaria: 2.4%
- Botswana: 1.8%
- Slovenia: 1.8%
- Latvia: 1.8%
- Malaysia: 1.8%
- Malta: 1.3%
- Bermuda: 1.3%
- Slovakia: 1.3%
- Lithuania: 1.3%
- Poland: 1.3%
- Chile: 1.3%
- Iceland: 1.3%
- Saudi Arabia: 1.1%
- Japan: 1.1%
- Kuwait: 1.1%
- Israel: 1.1%
- Estonia: 1.1%
- China: 1.1%
- Macao: 0.9%
- U.K.: 0.9%
- Cayman Islands: 0.9%
- Ireland: 0.9%
- Belgium: 0.9%
- Hong Kong: 0.9%
- Brunei: 0.9%
- Taiwan: 0.9%
- Czech Republic: 0.9%
- Isle of Man: 0.9%
- Qatar: 0.9%
- Jersey: 0.9%
- U.A.E.: 0.8%
- Abu Dhabi: 0.8%
- Guernsey: 0.8%
- France: 0.8%
- Korea: 0.8%
- Austria: 0.6%
- Finland: 0.6%
- U.S.: 0%
- Canada: 0%
- Germany: 0%
- Australia: 0%
- New Zealand: 0%
- Switzerland: 0%
- Norway: 0%
- Sweden: 0%
- Denmark: 0%
- Germany 0%
- Singapore: 0%
- Netherlands: 0%
- Luxembourg: 0%
- Liechtenstein: 0%
