The best - and worst - countries to do business in

Jake Cordell
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Social unrest means Venezuela maintains its place as the riskiest country in the world to do business
Social unrest means Venezuela maintains its place as the riskiest country in the world to do business (Source: Getty)

While there may be warning lights flashing over the health of the UK economy, it is nothing compared to some of the turmoil being faced in countries further afield.

Political uncertainty, an economic slowdown, oil price volatility and violent swings on the financial markets have dominated the start of 2016. Business and consumer confidence surveys are at multi-year lows, growth forecasts are being chopped and global trade is stuttering.

But a new ranking of the best - and worst - places in the world to do business - published this week, has determined that Venezuela, for the second year in a row, is the riskiest country in the world for companies to operate.

The beleaguered South American nation came in bottom place of FM Global’s Resilience Index as it faces not only exposure to natural disasters such as earthquakes, but global economic turmoil caused by the plunging oil price, chaos in the domestic political scene and perceptions of corruption and poor infrastructure.

The least resilient

Rank Country Score
130 Venezuela 0
129 Dominican Republic 20.4
128 Kyrgyz Republic 22.2
127 Nicaragua 26.1
126 Mauritania 27.9
125 Ukraine 28.5
124 Egypt 29
123 Algeria 30.9
122 Jamaica 31.1
121 Honduras 32.5

The scores are normalised so that the worst country (Venezuala) is given a score of 0, the best country (Switzerland) is given a score of 100, and the others are distributed between 0-100 depending on comparisons with the scores of these countries.

Last month, the Venezuelan government declared a 2-day working week to try to avert an energy crisis.

Switzerland climbed to the top of the index as the most secure place to do business in 2016, displacing Norway which fell to second because of oil price volatility.

The rankings take into account a number of factors that determine a country’s vulnerability and susceptibility to events or developments which could disrupt business, including:

  • Economic strength - GDP per capita

  • Perceptions of political risk, including corruption

  • Exposure to natural hazards - earthquakes, hurricanes, floods etc.

  • Vulnerability to an oil price shock

European nations dominate the top 10, with Ireland (3), Germany (4), Luxembourg (5), the Netherlands (6), and Denmark (10) all being ranked as some of the best places in the world to operate.

The most resilient

Rank Country Score
1 Switzerland 100
2 Norway 99.6
3 Ireland 98.4
4 Germany 94.6
5 Luxembourg 94.5
6 Netherlands 94.3
7 United States (Central region) 94.2
8 Canada 92.7
9 Australia 90.9
10 Denmark 90.8

The UK was ranked 20th - unmoved from last year. The report noted Britain’s participation in air strikes and military action in the middle east as a sign of heightened risk.

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