Sunday 28 June 2015

Baseline Profitability Index (India ranks 1)

Investment guidance

  • Various factors for investing abroad (other than the obvious economic growth)
    • financial stability, 
    • physical security, 
    • corruption, bribes, kickbacks
    • expropriation by government, 
    • exploitation by local partners, 
    • capital controls, and 
    • exchange rates as well.
  • What is Baseline Profitability Index?
Source: The Hindu
Indexes used by BPI
  • Corruption Perception Index
    • Corruption is measured by comparison across countries using the Transparency International’s Corruption Perceptions Index, a measure for the perceived levels of public-sector corruption worldwide. 
      • 2014 rank 85/175
      • 2013 rank 94/177
  • Index of Investor Protection by World Bank
    • In 2014, the average BPI score across all countries was 0.99; this year it is 1.03 — meaning the expected returns over the next five years are about three-quarters of a per cent higher a year.
The calculation of the BPI is an imperfect exercise fraught with assumptions, Mr. Altman says.
  • “For example, how does a survey about perceptions of corruption translate into likelihoods of having to pay bribes, and how big might those bribes be?” he wrote when he first introduced the index
[Sources: The Hindu, Foreign Policy Magazine]


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