Russia, Indonesia pose 'biggest investment risks'

Russia, Indonesia pose 'biggest investment risks'

LONDON (Dow Jones): Russia ranked number one in the risk
rankings for foreign direct investment in the fourth quarter of
1999, Merchant International Group said Tuesday in its Quarterly
Regional Review.

The group, a risk intelligence consultancy, gave Russia
ratings of 9.5 for religious extremism, 10 for corruption and 10
for organized crime, meaning that investors will find these
factors "unavoidable."

Following Russia in the top five are Indonesia, Pakistan,
Belarus and Kenya, MIG said in a press release.

The group rates 60 markets from the point of view of locally-
based U.K. companies.

"The problems corporates face, especially those in energy and
communications, are the marked lack of legal framework, the
blatant corruption and organized crime, and in the worst case
terrorist actions," said Stuart Poole-Robb, chief executive
officer of MIG.

Over the next six months, investors can look forward to
"secessionist pressures, a rise in Islamism and increasing
military influence in Russia, Indonesia and Pakistan, the report
said.

Other factors that will affect investment include "the
politics of religion and oil in the Caspian Sea and its
repercussions in Central Asia, Turkey and Russia; (and) the
spill-over effects of independence movements in Indonesia on
ASEAN countries."

MIG said Singapore, Estonia, Slovenia, Japan and Hong Kong
were the five least risky markets for foreign direct investment.