North Korea world's 'least investable' country

Despite President Trump’s claims that North Korea will become an “economic powerhouse”, Kim Jong-un’s authoritarian regime has been classified as the world’s most perilous investment destination for business, according to a study carried out by risk analysts at Verisk Maplecroft.

According to the study, the 10 least investable countries include: North Korea (ranked first and highest risk globally), Somalia, Yemen, South Sudan, Syria, Eritrea, Libya, Venezuela, Central African Republic and DR Congo.

The risk analyst says the fact that North Korea performs worse than failing states and countries that are home to extreme levels of conflict and instability is a telling indictment of the country under Kim’s regime.

Head of Asia at the company, Miha Hribernik says even sanctions and geopolitical risks aside, the barriers to investment are so wide-ranging as to be "insurmountable" for any responsible multinational organisation.

“Investors are of course aware of the challenges associated with North Korea, but our latest index data reveals an array of risks without parallel anywhere in the world,” he says.

In the unlikely event sanctions were to be removed or lessened any time soon, the problems facing would-be investors are put into stark relief when comparing the country to advanced economies in the region. Verisk says it would take a "gargantuan leap" for the regime in Pyongyang to even begin to approach the investment attractiveness of South Korea.

The research, released ahead of the Trump-Kim summit in Vietnam, uses Verisk Maplecroft’s portfolio of global risk indices to stress test the US president’s assertions by measuring the investability of 198 countries across the key areas of corporate governance; the regulatory framework; property rights protections; and respect of human rights.

Verisk Maplecroft stresses that not all the countries on the top 10 are entirely off limits – especially for investors with a high risk tolerance, such as those operating in the natural resources sector. Some, including DR Congo, offer significant opportunities, but all are exceedingly difficult places to invest and operate in. It’s vital that organisations considering market entry have full visibility of the spectrum of risks that face them and have extensive risk management measures in place.

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