India top as investment destination

A global ranking of investment destinations for foreigners has placed India right at the top among 110 countries.

China has secured the 65th position , behind all the four South Asian nations who were ranked by Daniel Altman's Baseline Profitability Index (BPI) 2015.  Sri Lanka was ranked 10th, Bangladesh 48th and surprisingly Pakistan at 58th position ahead of China.

Nepal, Bhutan and Maldives were not ranked in the BPI.

The US was placed at 50th position in BPI 2015 -- behind Bangladesh but ahead of Pakistan and China.

In the 2014 BPI index, India was in sixth position and Hong Kong was at number one.

Like India, all the three other South Asian countries have improved their positions in 2015, but Bangladesh has done that the least -- jumping from 49th position in BPI 2014 to 48th in BPI 2015.

Pakistan has jumped the most -- from 97th in BPI 2014 to 58th in BPI 2015.

Analysts feel this is due to the huge Chinese investments promised for the Sino-Pak growth corridor.

They say Bangladesh has failed to improve its position significantly because of political uncertainties and threat of violent agitations that is reflected in many surveys including the World Bank June global survey.

The BPI rankings are based on 'an index for baseline profitability' based on three factors Altman believes affects the ultimate success of a foreign investment: how much the value of an asset grows; the preservation of that value while the asset is owned; and the ease of repatriation of proceeds from selling the asset.

The index combines measures for each of these factors into a summary statistic that conveys a country’s basic attractiveness for investment.

“Where exactly should they [investors] put their money? The Baseline Profitability Index (BPI) is back for its third year with some answers, and Narendra Modi’s India is the place to start,” wrote Daniel Altman, creator of the index and an Adjunct Professor at New York University’s Stern School of Business, in the Foreign Policy magazine.

“...economic growth alone doesn’t determine the returns to investing abroad; you have to worry about things like financial stability, physical security, corruption, expropriation by government, exploitation by local partners, capital controls, and exchange rates as well. Putting all of these factors together gives a better idea of how big the return will be when it finally reaches your pocket,” Altman wrote.

The big story in the BPI in 2015 is “India coming out on top, with growth forecasts up, perceptions of corruption down, and investors better protected following the election of a government led by Prime Minister Narendra Modi.”