Business Environment Risk Intelligence

Business Environment Risk Intelligence

Introduction

There are different approaches to country risk assessment. Qualitative analyses include aspects such as legal and political risks that require analysis of qualitative data. Financial institutions that utilize qualitative analyses include COFACE, EIU, and IIF among others. Conversely, the quantitative approach involves econometrics, analytical, ‘Logit’ and non-linear conditional analyses (Guy and Kamga 41). Nonetheless, there are specialized institutions in country risk rating that include business environment risk index (BERI), Euromoney, and Coface & Ducroire amongst many others. This is a report on BERI’s risk rating system. It focuses on the establishment of BERI, as a country rating institution that utilizes both qualitative and quantitative approaches when rating countries on risks prevalent in their business environment.

Business Environment Risk Intelligence (BERI)

BERI is a private company that specializes in providing companies with an accurate risk analysis and assessment of various countries. Indeed, it is one of the pioneers of country risk assessment and it currently operates in over 140 countries across the world. Starting in 1966, the company serves financial institutions and firms in the international markets. In addition, BERI provides multi-client services to its clients. Among its core strengths is its ability to provide reliable and accurate predictions that have enabled the company to establish global clients. Currently, the company’s headquarters are located at Friday Harbor, Washington. Nonetheless, some processes such as research, analyses, and publication of reports are done in various cities and locations all over the world.

Dr. Haner is the managing director of the company having served as its founder and initiator of report publication and assessment of future financial and economic situations in different countries and financial markets. The company receives numerous publications from all over the world for analysis by its professionals. The analysts include a panel of experts that assesses specific qualitative and quantitative aspects of the publications and accord the accurate country risk rating.

Publications and utilization of Qualitative and Quantitative Analysis

BERI releases risk forecasts and ratings three times annually. This happens in April, August, and December. The company offers qualitative analyses of the past, present, and future risk assessment to numerous companies with operations that are located all over the world (Brown 61). In line with the dynamic nature of the dynamic global business environment, BERI has refined its rating system over the years. The current system offers an all-inclusive numerical assessment of the prevalent operating environment, political factors, and foreign exchange trends to over fifty countries across the world (Burstein 111). These countries are considered important owing to their role in shaping global economic and financial trends.

Historical, current, and future predictions make up the “Composite Score” that is critical in providing the correct rating system for various countries (Burstein 112). Historical Ratings Research Package (HRRP) is always available and facilitates global companies to get an understanding of past trends of a specific country (Guy and Kamga 47). In any publication, fifty important countries have a briefing that is segmented into four sections. The first section consists of political risk indicators in addition to the operation risk index. Besides, each of the countries has a briefing on the current insights with comments on future predictions and emphasis on opportunities at the disposal of the country under analysis. Additionally, this section of analysis also highlights the problems that a country may face in the immediate and long-term future.

Section three of the briefing contains financial and economic data that are important in providing vital indicators for upcoming years. Finally, during the briefing dedicated to the fifty most important countries, BERI provides political factors and information that may predispose a country to an improved or a deteriorating risk rating. Such factors as the prevalent governance system, dynamics in leadership, and projected political situation of the country in the short term and long-term facilitate the analyses of a specific country’s political environment (Guy and Kamga 57).

Guy and Kamga say that the rating institution dictates that their clients (international businesses and companies) must have at least five years prediction horizons (49). Besides, it says that a company ought to implement its decisions success